10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the Quarterly Period ended March 31, 2013

or

¨ 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.)
15W060 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 or former address, if changed since last report)

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  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    Yes  x    No  ¨

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

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate the number of shares outstanding of each of the Issuer’s classes of common stock as of the latest practicable date, at May 6, 2013, there were 21,072,966 shares of Common Stock, $0.01 par value, outstanding.

BANKFINANCIAL CORPORATION

Form 10-Q

March 31, 2013

Table of Contents

		Page Number
	PART I
Item 1.	Financial Statements and Supplementary Data	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	43
Item 4.	Controls and Procedures	45
	PART II
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3.	Default Upon Senior Securities	46
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits and Financial Statement Schedules	46
Signatures		47

BANKFINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

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

	March 31, 2013			December 31, 2012
Assets
Cash and due from other financial institutions	$	17,742		$	20,361
Interest-bearing deposits in other financial institutions	293,386			255,403
Cash and cash equivalents	311,128			275,764
Securities, at fair value	61,273			77,832
Loans held-for-sale	55			2,166
Loans receivable, net of allowance for loan losses: March 31, 2013, $17,453 and December 31, 2012, $18,035	1,004,404			1,030,465
Other real estate owned, net	8,088			10,358
Stock in Federal Home Loan Bank, at cost	7,566			8,412
Premises and equipment, net	37,530			38,251
Accrued interest receivable	3,951			4,146
Core deposit intangible	2,882			3,038
Bank owned life insurance	21,715			21,645
FDIC prepaid expense	2,188			2,658
Income tax receivable	—			461
Other assets	5,355			5,996
Total assets	$	1,466,135		$	1,481,192
Liabilities:
Deposits
Noninterest-bearing	$	131,856		$	134,597
Interest-bearing	1,139,694			1,147,754
Total deposits	1,271,550			1,282,351
Borrowings	2,740			5,567
Advance payments by borrowers taxes and insurance	9,790			10,705
Accrued interest payable and other liabilities	8,416			9,679
Total liabilities	1,292,496			1,308,302
Commitments and contingent liabilities
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; 21,072,966 shares issued at March 31, 2013 and December 31, 2012	211			211
Additional paid-in capital	193,544			193,590
Retained earnings (deficit)	(9,118		)	(9,796		)
Unearned Employee Stock Ownership Plan shares	(11,992		)	(12,233		)
Accumulated other comprehensive income	994			1,118
Total stockholders’ equity	173,639			172,890
Total liabilities and stockholders’ equity	$	1,466,135		$	1,481,192

See accompanying notes to the consolidated financial statements.

3

BANKFINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

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

	For the Three Months Ended March 31,
	2013			2012
Interest and dividend income
Loans, including fees	$	12,278		$	16,112
Securities	250			442
Other	185			80
Total interest income	12,713			16,634
Interest expense
Deposits	986			1,214
Borrowings	8			26
Total interest expense	994			1,240
Net interest income	11,719			15,394
Provision for loan losses	722			996
Net interest income after provision for loan losses	10,997			14,398
Noninterest income
Deposit service charges and fees	499			557
Other fee income	375			385
Insurance commissions and annuities income	109			122
Gain on sale of loans, net	1,417			267
Loan servicing fees	123			128
Amortization and impairment of servicing assets	(33		)	(82		)
Earnings on bank owned life insurance	70			126
Trust	181			184
Other	125			145
	2,866			1,832
Noninterest expense
Compensation and benefits	6,752			6,679
Office occupancy and equipment	1,948			2,032
Advertising and public relations	146			106
Information technology	749			848
Supplies, telephone, and postage	461			390
Amortization of intangibles	156			163
Nonperforming asset management	694			1,240
Operations of other real estate owned	511			552
FDIC insurance premiums	492			348
Other	1,276			1,078
	13,185			13,436
Income before income taxes	678			2,794
Income tax expense	—			457
Net income	$	678		$	2,337
Basic earnings per common share	$	0.03		$	0.12
Diluted earnings per common share	$	0.03		$	0.12
Weighted average common shares outstanding	19,964,028			19,835,273
Diluted weighted average common shares outstanding	19,964,028			19,836,080

See accompanying notes to the consolidated financial statements.

4

BANKFINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands) - Unaudited

	For the Three Months Ended March 31,
	2013			2012
Net income	$	678		$	2,337
Unrealized holding loss arising during the period, net of tax	(124		)	(55		)
Amount reclassified from accumulated other comprehensive income	—			—
Net current period other comprehensive loss	(124		)	(55		)
Comprehensive income	$	554		$	2,282

See accompanying notes to the consolidated financial statements.

5

BANKFINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands, except per share data) - Unaudited

	Common Stock		Additional Paid-in Capital			Retained Earnings			Unearned Employee Stock Ownership Plan Shares			Accumulated Other Comprehen-sive Income			Total
Balance at January 1, 2012	$	211	$	193,801		$	17,946		$	(13,212	)	$	1,111		$	199,857
Net income	—		—			2,337			—			—			2,337
Other comprehensive income, net of tax effects	—		—			—			—			(55		)	(55		)
Nonvested stock awards-stock-based compensation expense	—		21			—			—			—			21
Cash dividends declared on common stock ($0.01 per share)	—		—			(211		)	—			—			(211		)
ESOP shares earned	—		(82		)	—			244			—			162
Balance at March 31, 2012	$	211	$	193,740		$	20,072		$	(12,968	)	$	1,056		$	202,111
Balance at January 1, 2013	$	211	$	193,590		$	(9,796	)	$	(12,233	)	$	1,118		$	172,890
Net income	—		—			678			—			—			678
Other comprehensive income, net of tax effects	—		—			—			—			(124		)	(124		)
ESOP shares earned	—		(46		)	—			241			—			195
Balance at March 31, 2013	$	211	$	193,544		$	(9,118	)	$	(11,992	)	$	994		$	173,639

See accompanying notes to the consolidated financial statements.

6

BANKFINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) - Unaudited

	For the Three Months Ended March 31,
	2013			2012
Cash flows from operating activities
Net income	$	678		$	2,337
Adjustments to reconcile to net income to net cash from operating activities
Provision for loan losses	722			996
ESOP shares earned	195			162
Stock–based compensation expense	—			21
Depreciation and amortization	1,111			1,154
Amortization of premiums and discounts on securities and loans	(214		)	(943		)
Amortization of core deposit and other intangible assets	156			163
Amortization and impairment of servicing assets	33			82
Net change in net deferred loan origination costs	14			60
Net loss (gain) on sale of other real estate owned	69			(139		)
Net gain on sale of loans	(1,417		)	(267		)
Loans originated for sale	(3,357		)	(6,127		)
Proceeds from sale of loans	4,163			7,791
Other real estate owned valuation adjustments	89			389
Net change in:
Accrued interest receivable	195			662
Earnings on bank owned life insurance	(70		)	(126		)
Other assets	1,163			603
Accrued interest payable and other liabilities	(1,263		)	(2,553		)
Net cash from operating activities	2,267			4,265
Cash flows from investing activities
Securities
Proceeds from maturities	14,626			6,455
Proceeds from principal repayments	4,938			6,209
Purchases of securities	(3,175		)	(1,153		)
Loans receivable
Principal payments on loans receivable	130,457			156,725
Purchases of loans	—			—
Originated for investment	(105,573		)	(108,142		)
Proceeds from sale of loans	2,868			—
Proceeds of redemption of Federal Home Loan Bank of Chicago stock	846			5,010
Proceeds from sale of other real estate owned	2,667			2,984
Purchase of premises and equipment, net	(14		)	(685		)
Net cash from investing activities	47,640			67,403

Continued

7

BANKFINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) - Unaudited

	For the Three Months Ended March 31,
	2013			2012
Cash flows from financing activities
Net change in deposits	$	(10,801	)	$	(11,914	)
Net change in borrowings	(2,827		)	(2,840		)
Net change in advance payments by borrowers for taxes and insurance	(915		)	673
Repurchase and retirement of common stock	—			—
Cash dividends paid on common stock	—			(211		)
Net cash used in financing activities	(14,543		)	(14,292		)
Net change in cash and cash equivalents	35,364			57,376
Beginning cash and cash equivalents	275,764			120,704
Ending cash and cash equivalents	$	311,128		$	178,080
Supplemental disclosures of cash flow information:
Interest paid	$	1,014		$	1,263
Income taxes paid	—			—
Income taxes refunded	461			—
Loans transferred to other real estate owned	555			1,127

See accompanying notes to the consolidated financial statements.

8

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 (the “Company”), is the owner of all of the issued and outstanding capital stock of BankFinancial, F.S.B. (the “Bank”).

Principles of Consolidation: The interim unaudited consolidated financial statements include the accounts of and transactions of BankFinancial Corporation, the Bank, and the Bank’s wholly-owned subsidiaries, Financial Assurance Services, Inc. and BF Asset Recovery Corporation (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. All significant intercompany accounts and transactions have been eliminated. The results of operations for the three months ended March 31, 2013, are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2013.

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

Use of Estimates: To prepare financial statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ. The allowance for loan losses, mortgage servicing rights, deferred tax assets, goodwill, other intangible assets, stock-based compensation, impairment of securities and fair value of financial instruments are particularly subject to change and the effect of such change could be material to the financial statements.

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, 2012, as filed with the Securities and Exchange Commission.

Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board issued an amendment to improve the reporting of reclassifications out of accumulated other comprehensive income. ASC Topic 220, “Comprehensive Income” amended prior guidance to improve the reporting of reclassifications out of accumulated other comprehensive income by requiring an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income if the amount reclassified is required under GAAP. The Company adopted this new authoritative guidance on January 1, 2013, and it did not have an impact on the Company's statements of operations and financial condition as the Company did not have any amounts reclassified during the periods ended March 31, 2013 and 2012.

9

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, exclusive of unearned ESOP shares and unvested restricted stock shares. Stock options and restricted stock are regarded as potential common stock and are considered in the diluted earnings per share calculations to the extent that they would have a dilutive effect if converted to common stock.

	For the Three Months Ended March 31,
	2013			2012
Net income available to common stockholders	$	678		$	2,337
Average common shares outstanding	21,072,966			21,072,966
Less:
Unearned ESOP shares	(1,108,938		)	(1,233,359		)
Unvested restricted stock shares	—			(4,334		)
Weighted average common shares outstanding	19,964,028			19,835,273
Add - Net effect of dilutive stock options and unvested restricted stock	—			807
Weighted average dilutive common shares outstanding	19,964,028			19,836,080
Basic earnings per common share	$	0.03		$	0.12
Diluted earnings per common share	$	0.03		$	0.12
Number of antidilutive stock options excluded from the diluted earnings per share calculation	—			2,055,553
Weighted average exercise price of anti-dilutive option shares	$	—		$	16.53

10

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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
March 31, 2013
Certificates of deposit	$	22,281	$	—	$	—		$	22,281
Municipal securities	350		16		—			366
Equity mutual fund	500		24		—			524
Mortgage-backed securities - residential	31,026		1,614		(31		)	32,609
Collateralized mortgage obligations - residential	5,398		63		(8		)	5,453
SBA-guaranteed loan participation certificates	40		—		—			40
	$	59,595	$	1,717	$	(39	)	$	61,273
December 31, 2012
Certificates of deposit	$	33,456	$	—	$	—		$	33,456
Municipal securities	350		19		—			369
Equity mutual fund	500		28		—			528
Mortgage-backed securities - residential	32,572		1,661		—			34,233
Collateralized mortgage obligations - residential	9,111		95		(2		)	9,204
SBA-guaranteed loan participation certificates	42		—		—			42
	$	76,031	$	1,803	$	(2	)	$	77,832

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. All securities reflected in the preceding table were classified as available-for-sale at March 31, 2013 and December 31, 2012.

The amortized cost and fair values of securities 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.

	March 31, 2013
	Amortized Cost		Fair Value
Due in one year or less	$	22,451	$	22,455
Due after one year through five years	180		192
	22,631		22,647
Equity mutual fund	500		524
Mortgage-backed securities - residential	31,026		32,609
Collateralized mortgage obligations - residential	5,398		5,453
SBA-guaranteed loan participation certificates	40		40
	$	59,595	$	61,273

11

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 3 - SECURITIES (continued)

Securities with unrealized losses not recognized in income are as follows:

	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
March 31, 2013
Mortgage-backed securities - residential	$	2,673	$	(31	)	$	—	$	—		$	2,673	$	(31	)
Collateralized mortgage obligations - residential	—		—			1,142		(8		)	1,142		(8		)
	$	2,673	$	(31	)	$	1,142	$	(8	)	$	3,815	$	(39	)
December 31, 2012
Collateralized mortgage obligations - residential	$	—	$	—		$	1,956	$	(2	)	$	1,956	$	(2	)

The Company evaluates marketable investment securities with significant declines in fair value on a quarterly basis to determine whether they should be considered other-than-temporarily impaired under current accounting guidance, which generally provides that if a marketable security is in an unrealized loss position, whether due to general market conditions or industry or issuer-specific factors, the holder of the securities must assess whether the impairment is other-than-temporary.

A collateralized mortgage obligation that the Company holds in its investment portfolio remained in an unrealized loss position at March 31, 2013, but the unrealized loss was not considered significant under the Company’s impairment testing methodology. In addition, the Company does not intend to sell this security, and it is likely that the Company will not be required to sell the security before its anticipated recovery occurs.

There were no sales of securities for the three months ended March 31, 2013 and 2012.

NOTE 4 - LOANS RECEIVABLE

Loans receivable are as follows:

	March 31, 2013			December 31, 2012
One-to-four family residential real estate loans	$	209,540		$	218,596
Multi-family mortgage loans	338,502			352,019
Nonresidential real estate loans	261,207			264,672
Construction and land loans	6,933			8,552
Commercial loans	55,362			61,388
Commercial leases	147,168			139,783
Consumer loans	2,414			2,745
Total loans	1,021,126			1,047,755
Net deferred loan origination costs	731			745
Allowance for loan losses	(17,453		)	(18,035		)
Loans, net	$	1,004,404		$	1,030,465

12

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 4 - LOANS RECEIVABLE

The following tables present the balance in the allowance for loan losses and the loans receivable by portfolio segment and based on impairment method:

	Allowance for loan losses								Loan Balances
	Individually evaluated  for impairment		Purchased impaired loans		Collectively evaluated  for impairment		Total		Individually evaluated  for impairment		Purchased impaired loans		Collectively evaluated  for impairment		Total
March 31, 2013
One-to-four family residential real estate loans	$	116	$	3	$	4,332	$	4,451	$	4,961	$	388	$	204,191	$	209,540
Multi-family mortgage loans	747		—		3,724		4,471		11,243		—		327,259		338,502
Nonresidential real estate loans	351		24		5,386		5,761		5,883		2,554		252,770		261,207
Construction and land loans	135		74		631		840		1,576		1,021		4,336		6,933
Commercial loans	81		—		1,149		1,230		882		21		54,459		55,362
Commercial leases	—		—		604		604		—		—		147,168		147,168
Consumer loans	—		—		96		96		—		—		2,414		2,414
	$	1,430	$	101	$	15,922	$	17,453	$	24,545	$	3,984	$	992,597	1,021,126
Net deferred loan origination costs															731
Allowance for loan losses															(17,453		)
Loans, net															$	1,004,404

	Allowance for loan losses								Loan Balances
	Individually evaluated  for impairment		Purchased impaired loans		Collectively evaluated  for impairment		Total		Individually evaluated  for impairment		Purchased impaired loans		Collectively evaluated  for impairment		Total
December 31, 2012
One-to-four family residential real estate loans	$	137	$	5	$	4,584	$	4,726	$	5,256	$	380	$	212,960	$	218,596
Multi-family mortgage loans	729		—		3,851		4,580		4,801		—		347,218		352,019
Nonresidential real estate loans	401		8		5,136		5,545		11,918		2,568		250,186		264,672
Construction and land loans	294		96		641		1,031		2,210		1,021		5,321		8,552
Commercial loans	23		1		1,300		1,324		256		20		61,112		61,388
Commercial leases	—		—		666		666		—		—		139,783		139,783
Consumer loans	—		—		163		163		—		—		2,745		2,745
	$	1,584	$	110	$	16,341	$	18,035	$	24,441	$	3,989	$	1,019,325	1,047,755
Net deferred loan origination costs															745
Allowance for loan losses															(18,035		)
Loans, net															$	1,030,465

13

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 4 - LOANS RECEIVABLE (continued)

Activity in the allowance for loan losses is as follows:

	For the Three Months Ended March 31,
	2013			2012
Beginning balance	$	18,035		$	31,726
Loans charged offs:
One-to-four family residential real estate loans	(369		)	(672		)
Multi-family mortgage loans	(236		)	(554		)
Nonresidential real estate loans	(79		)	(433		)
Construction and land loans	(927		)	(47		)
Commercial loans	(19		)	(138		)
Consumer loans	—			(12		)
	(1,630		)	(1,856		)
Recoveries:
One-to-four family residential real estate loans	242			111
Multi-family mortgage loans	57			384
Nonresidential real estate loans	19			31
Construction and land loans	2			184
Commercial loans	5			57
Commercial leases	—			—
Consumer loans	1			5
	326			772
Net charge-off	(1,304		)	(1,084		)
Provision for loan losses	722			996
Ending balance	$	17,453		$	31,638

Impaired loans

Several of the following disclosures are presented by “recorded investment,” which the FASB defines as “the amount of the investment in a loan, which is not net of a valuation allowance, but which does reflect any direct write-down of the investment.” The following represents the components of recorded investment:

Loan principal balance

Less unapplied payments

Plus negative unapplied balance

Less escrow balance

Plus negative escrow balance

Plus unamortized net deferred loan costs

Less unamortized net deferred loan fees

Plus unamortized premium

Less unamortized discount

Less previous charge-offs

Plus recorded accrued interest

Less reserve for uncollected interest

= Recorded investment

14

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 4 - LOANS RECEIVABLE (continued)

The following table presents loans individually evaluated for impairment by class of loans, excluding purchased impaired loans:

	Loan Balance		Recorded Investment		Partial Charge-off		Allowance for Loan Losses Allocated		Average Investment in Impaired Loans		Interest Income Recognized
March 31, 2013
With no related allowance recorded:
One-to-four family residential real estate loans	$	5,142	$	4,047	$	1,051	$	—	$	2,983	$	15
One-to-four family residential real estate loans - non-owner occupied	810		649		139		—		1,379		7
Multi-family mortgage loans	7,651		7,379		4		—		3,417		12
Nonresidential real estate loans	4,088		3,467		251		—		5,519		2
Land loans	421		310		108		—		78		—
Commercial loans - secured	—		—		—		—		52		—
Commercial loans - unsecured	125		53		70		—		—		—
	18,237		15,905		1,623		—		13,428		36
With an allowance recorded:
One-to-four family residential real estate loans	162		149		3		18		—		—
One-to-four family residential real estate loans - non-owner occupied	134		100		34		98		373		—
Multi-family mortgage loans	3,609		3,099		477		685		2,758		9
Wholesale commercial lending	656		647		—		62		162		7
Nonresidential real estate loans	2,628		2,404		181		351		2,511		3
Land loans	2,500		1,264		1,232		135		1,972		—
Commercial loans - secured	1,034		830		201		81		361		—
	10,723		8,493		2,128		1,430		8,137		19
Total	$	28,960	$	24,398	$	3,751	$	1,430	$	21,565	$	55

15

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 4 - LOANS RECEIVABLE (continued)

	Loan Balance		Recorded Investment		Partial Charge-off		Allowance for Loan Losses Allocated		Average Investment in Impaired Loans		Interest Income Recognized
December 31, 2012
With no related allowance recorded:
One-to-four family residential real estate loans	$	5,250	$	4,216	$	1,027	$	—	$	2,814	$	149
One-to-four family residential real estate loans - non-owner occupied	567		534		34		—		4,322		90
Multi-family mortgage loans	2,959		2,106		819		—		9,303		189
Nonresidential real estate loans	11,850		9,220		2,490		—		6,218		347
Land loans	—		—		—		—		409		—
Commercial loans - secured	—		—		—		—		137		—
Commercial loans - other	529		52		477		—		25		21
Non-rated commercial leases	—		—		—		—		23		3
	21,155		16,128		4,847		—		23,251		799
With an allowance recorded:
One-to-four family residential real estate loans	—		—		—		—		2,500		—
One-to-four family residential real estate loans - non-owner occupied	626		499		128		137		1,996		13
Multi-family mortgage loans	3,182		2,645		521		729		6,562		20
Wholesale commercial lending	—		—		—		—		—		—
Nonresidential real estate loans	2,825		2,549		266		401		21,077		20
Land loans	3,812		2,210		1,602		294		2,933		113
Commercial loans - secured	386		204		182		23		1,849		—
Commercial loans - unsecured	—		—		—		—		267		—
Non-rated commercial leases	—		—		—		—		36		—
Consumer loans	—		—		—		—		2		—
	10,831		8,107		2,699		1,584		37,222		166
Total	$	31,986	$	24,235	$	7,546	$	1,584	$	60,473	$	965

Purchased Impaired Loans

As a result of its acquisition of Downers Grove National Bank, the Company holds purchased loans for which there was evidence of deterioration of credit quality since origination and for which it was probable that all contractually required payments would not be collected as of the date of the acquisition. The carrying amount of these purchased impaired loans is as follows:

	March 31, 2013		December 31, 2012
One–to–four family residential real estate loans	$	388	$	380
Nonresidential real estate loans	2,554		2,568
Land loans	1,021		1,021
Commercial loans	21		20
Outstanding balance	$	3,984	$	3,989
Carrying amount, net of allowance ($101 at March 31, 2013, $110 at December 31, 2012)	$	3,883	$	3,879

16

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 4 - LOANS RECEIVABLE (continued)

Accretable yield, or income expected to be collected, related to purchased impaired loans is as follows:

	For the Three Months Ended March 31,
	2013		2012
Beginning balance	$	196	$	2,270
New loans purchased	—		—
Disposals	—		127
Accretion of income	50		353
Ending balance	$	146	$	1,790

For the above purchased impaired loans, the Company decreased the allowance for loan losses by $9,000 for the three months ended March 31, 2013 and increased the allowance for loan losses by $337,000 for the three months ended March 31, 2012.

Purchased impaired loans for which it was probable at the date of acquisition that all contractually required payments would not be collected are as follows:

	March 31, 2013		December 31, 2012
Contractually required payments receivable of loans purchased:
One-to-four family residential real estate loans	$	1,143	$	1,143
Nonresidential real estate loans	3,871		3,884
Land loans	1,600		1,600
Commercial loans	222		597
	$	6,836	$	7,224

At acquisition, cash flows expected to be collected were $18.8 million, compared to the fair value of purchased impaired loans of $15.4 million.

17

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 4 - LOANS RECEIVABLE (continued)

Nonaccrual loans

The following table presents the recorded investment in nonaccrual loans and loans past due over 90 days still on accrual by class of loans, excluding purchased impaired loans:

	Loan Balance		Recorded Investment		Loans Past Due Over 90 Days, Still Accruing
March 31, 2013
One-to-four family residential real estate loans	$	6,223	$	5,122	$	—
One-to-four family residential real estate loans – non owner occupied	1,106		866		—
Multi-family mortgage loans	11,197		10,174		243
Wholesale commercial lending	656		648		—
Nonresidential real estate loans	7,125		6,182		—
Land loans	2,921		1,575		—
Commercial loans – secured	1,034		830		—
Commercial loans – unsecured	125		53		—
Consumer loans	11		11		—
	$	30,398	$	25,461	$	243
December 31, 2012
One-to-four family residential real estate loans	$	7,286	$	6,154	$	70
One-to-four family residential real estate loans – non owner occupied	1,420		1,145		—
Multi-family mortgage loans	5,246		3,517		242
Nonresidential real estate loans	12,249		8,985		—
Land loans	3,817		2,210		—
Commercial loans – secured	386		204		—
Commercial loans – unsecured	552		52		17
	$	30,956	$	22,267	$	329

Nonaccrual loans and impaired loans are defined differently. Some loans may be included in both categories, and some may only be included in one category. Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

The Company’s reserve for uncollected loan interest was $1.2 million and $942,000 at March 31, 2013 and December 31, 2012, respectively. Except for purchased impaired loans, when a loan is on non-accrual status and the ultimate collectability of the total principal of an impaired loan is in doubt, all payments are applied to principal under the cost recovery method. Alternatively, when a loan is on non-accrual status but there is doubt concerning only the ultimate collectability of interest, contractual interest is credited to interest income only when received, under the cash basis method pursuant to the provisions of FASB ASC 310–10, as applicable. In all cases, the average balances are calculated based on the month–end balances of the financing receivables within the period reported pursuant to the provisions of FASB ASC 310–10, as applicable.

18

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 4 - LOANS RECEIVABLE (continued)

Past Due Loans

The following tables presents the aging of the recorded investment of loans at March 31, 2013 by class of loans:

	30-59 Days Past Due		60-89 Days Past Due		90 Days  or Greater Past Due		Total Past Due		Loans Not Past Due		Total
One-to-four family residential real estate loans	$	510	$	305	$	4,123	$	4,938	$	147,736	$	152,674
One-to-four family residential real estate loans - non-owner occupied	504		198		811		1,513		54,569		56,082
Multi-family mortgage loans	2,145		1,208		9,762		13,115		276,979		290,094
Wholesale commercial lending	—		—		—		—		46,592		46,592
Nonresidential real estate loans	3,159		—		5,788		8,947		247,603		256,550
Construction loans	—		—		—		—		47		47
Land loans	—		—		1,375		1,375		4,454		5,829
Commercial loans:
Secured	142		—		830		972		18,168		19,140
Unsecured	21		—		52		73		5,549		5,622
Municipal loans	—		—		—		—		4,784		4,784
Warehouse lines	—		—		—		—		1,827		1,827
Health care	—		—		—		—		17,257		17,257
Other	—		—		—		—		6,861		6,861
Commercial leases:
Investment rated commercial leases	303		—		—		303		107,786		108,089
Below investment grade	—		—		—		—		9,644		9,644
Non-rated	—		—		—		—		25,691		25,691
Lease pools	—		—		—		—		4,594		4,594
Consumer loans	2		1		11		14		2,410		2,424
	$	6,786	$	1,712	$	22,752	$	31,250	$	982,551	$	1,013,801

	30-59 Days Past Due		60-89 Days Past Due		90 Days  or Greater Past Due		Total Past Due		Loans Not Past Due		Total
Purchased impaired loans
One-to-four family residential real estate loans - non-owner occupied	$	—	$	—	$	388	$	388	$	—	$	388
Nonresidential real estate loans	—		—		1,124		1,124		1,430		2,554
Land loans	—		—		1,021		1,021		—		1,021
Commercial loans – secured	—		—		21		21		—		21
	$	—	$	—	$	2,554	$	2,554	$	1,430	$	3,984

19

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 4 - LOANS RECEIVABLE (continued)

The following tables presents the aging of the recorded investment of loans at December 31, 2012 by class of loans:

	30-59 Days Past Due		60-89 Days Past Due		90 Days  or Greater Past Due		Total Past Due		Loans Not Past Due		Total
One-to-four family residential real estate loans	$	1,584	$	778	$	4,463	$	6,825	$	153,279	$	160,104
One-to-four family residential real estate loans - non-owner occupied	855		579		249		1,683		55,906		57,589
Multi-family mortgage loans	5,393		3,049		3,218		11,660		291,103		302,763
Wholesale commercial lending	1,481		—		—		1,481		44,342		45,823
Nonresidential real estate loans	863		398		5,508		6,769		252,368		259,137
Land loans	702		1,220		630		2,552		4,956		7,508
Commercial loans:
Secured	659		3		204		866		22,336		23,202
Unsecured	81		78		16		175		5,774		5,949
Municipal loans	—		—		—		—		4,752		4,752
Warehouse lines	—		—		—		—		2,989		2,989
Health care	—		—		—		—		17,601		17,601
Other	—		—		—		—		6,977		6,977
Commercial leases:
Investment rated commercial leases	—		—		—		—		102,724		102,724
Below investment grade	—		—		—		—		9,294		9,294
Non-rated	—		—		—		—		25,657		25,657
Lease pools	—		—		—		—		3,028		3,028
Consumer loans	15		—		—		15		2,741		2,756
	$	11,633	$	6,105	$	14,288	$	32,026	$	1,005,827	$	1,037,853

	30-59 Days Past Due		60-89 Days Past Due		90 Days  or Greater Past Due		Total Past Due		Loans Not Past Due		Total
Purchased impaired loans
One-to-four family residential real estate loans - non-owner occupied	$	327	$	—	$	53	$	380	$	—	$	380
Nonresidential real estate loans	—		—		1,125		1,125		1,443		2,568
Land loans	—		—		1,021		1,021		—		1,021
Commercial loans – secured	—		—		20		20		—		20
	$	327	$	—	$	2,219	$	2,546	$	1,443	$	3,989

Troubled Debt Restructurings

The Company evaluates loan extensions or modifications in accordance with FASB ASC 310–40 with respect to the classification of the loan as a TDR. In general, if the Company grants a loan extension or modification to a borrower for other than an insignificant period of time that includes a below–market interest rate, principal forgiveness, payment forbearance or other concession intended to minimize the economic loss to the Company, the loan extension or loan modification is classified as a TDR. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal then due and payable, management measures any impairment on the restructured loan in the same manner as for impaired loans as noted above.

20

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 4 - LOANS RECEIVABLE (continued)

The Company had $5.6 million of TDRs at March 31, 2013, compared to $11.2 million at December 31, 2012, with $287,000 in specific valuation reserves allocated to those loans at March 31, 2013 and $318,000 in specific valuation reserves allocated at December 31, 2012. The Company had no outstanding commitments to borrowers whose loans are classified as TDRs at either date.

The following table presents loans classified as TDRs:

	March 31, 2013		December 31, 2012
One-to-four family residential real estate	$	2,640	$	2,802
Multi-family mortgage	1,193		1,201
Nonresidential real estate	—		5,189
Troubled debt restructured loans – accrual loans	3,833		9,192
One-to-four family residential real estate	820		767
Multi-family mortgage	936		938
Nonresidential real estate	—		270
Troubled debt restructured loans – nonaccrual loans	1,756		1,975
Total troubled debt restructured loans	$	5,589	$	11,167

Periodically, the Company will restructure a note into two separate notes (A/B structure), charging off the entire B portion of the note. The A note is structured with appropriate loan-to-value and cash flow coverage ratios that provide for a high likelihood of repayment. The A note is classified as a non-performing note until the borrower has displayed a historical payment performance for a reasonable time prior to and subsequent to the restructuring. A period of sustained repayment for at least six months generally is required to return the note to accrual status provided that management has determined that the performance is reasonably expected to continue. The A note will be classified as a restructured note (either performing or nonperforming) through the calendar year of the restructuring that the historical payment performance has been established. These notes will be no longer included as a TDR above in the subsequent calendar year.

During the periods ending March 31, 2013 and 2012, the terms of certain loans were modified and classified as TDRs. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan.

The following tables present TDR activity:

	Three months ended March 31,
	2013					2012
	Number of loans	Pre- Modification outstanding recorded investment		Post- Modification outstanding recorded investment		Number of loans	Pre- Modification outstanding recorded investment		Post- Modification outstanding recorded investment
One-to-four family residential real estate	1	$	384	$	384	2	$	392	$	392
Multi-family mortgage	—	—		—		1	700		503
Total	1	$	384	$	384	3	$	1,092	$	895

21

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 4 - LOANS RECEIVABLE (continued)

	Due to reduction in interest rate		Due to extension of maturity date		Due to permanent reduction in recorded investment		Total
For the three months ended March 31, 2013
One-to-four family residential real estate	$	—	$	384	$	—	$	384
Total	$	—	$	384	$	—	$	384
For the three months ended March 31, 2012
One-to-four family residential real estate	$	372	$	20	$	—	$	392
Multi-family mortgage	—		—		503		503
Total	$	372	$	20	$	503	$	895

The TDRs described above had no impact on interest income, resulted in no change to the allowance for loan losses and resulted in no charge offs for the three months ended March 31, 2013. The TDR's had no impact on interest income, but increased the allowance for loan losses by $183,000 and resulted in charge offs of $470,000 during the three months ended March 31, 2012.

The following table presents TDRs for which there was a payment default during the three months ending March 31, 2013 and 2012 within twelve months following the modification.

	2013			2012
	Number of loans	Recorded investment		Number of loans	Recorded investment
One-to-four family residential real estate	—	$	—	1	$	278
Nonresidential real estate	—	—		1	700
Total	—	$	—	2	$	978

A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

The TDRs that subsequently defaulted had no material impact on the allowance for loans losses during the three months ending March 31, 2013 and 2012.

The terms of certain other loans were modified during the quarters ending March 31, 2013 and 2012 that did not meet the definition of a TDR. These loans have a total recorded investment of $324,000 and $1.7 million at March 31, 2013 and 2012. The modification of these loans involved either a modification of the terms of a loan to borrowers who were not experiencing financial difficulties or a delay in a payment that was considered to be insignificant.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy.

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, including current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans based on credit risk. This analysis includes non-homogeneous loans, such as commercial and commercial real estate loans. This analysis is performed on a monthly basis. The Company uses the following definitions for risk ratings:

Special Mention. A Special Mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

Substandard. Loans categorized as substandard continue to accrue interest, but exhibit a well-defined weakness or weaknesses that may jeopardize the liquidation of the debt. The loans continue to accrue interest because they are well secured and collection of principal and interest is expected within a reasonable time. The risk rating guidance published by

22

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 4 - LOANS RECEIVABLE (continued)

the Office of the Comptroller of the Currency clarifies that a loan with a well-defined weakness does not have to present a probability of default for the loan to be rated Substandard, and that an individual loan’s loss potential does not have to be distinct for the loan to be rated Substandard.

Nonaccrual. An asset classified Nonaccrual has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The loans were placed on nonaccrual status.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered “Pass” rated loans.

As of March 31, 2013, based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	Pass		Special Mention		Substandard		Nonaccrual		Total
One-to-four family residential real estate loans	$	147,526	$	126	$	1,016	$	4,111	$	152,779
One-to-four family residential real estate loans non-owner occupied	52,066		1,439		1,967		1,289		56,761
Multi-family mortgage loans	254,877		14,879		11,169		10,935		291,860
Wholesale commercial lending	43,876		—		2,766		—		46,642
Nonresidential real estate loans	197,355		37,929		17,176		8,747		261,207
Construction loans	46		—		—		—		46
Land loans	2,582		—		1,707		2,598		6,887
Commercial loans:
Secured	15,496		2,419		351		852		19,118
Unsecured	3,776		312		1,466		52		5,606
Municipal loans	4,751		—		—		—		4,751
Warehouse lines	1,812		—		—		—		1,812
Health care	17,238		—		—		—		17,238
Other	6,837		—		—		—		6,837
Commercial leases:
Investment rated commercial leases	107,491		—		—		—		107,491
Below investment grade	9,569		—		—		—		9,569
Non-rated	25,533		—		—		—		25,533
Lease pools	4,575		—		—		—		4,575
Consumer loans	2,402		1		—		11		2,414
Total	$	897,808	$	57,105	$	37,618	$	28,595	$	1,021,126

23

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 4 - LOANS RECEIVABLE (continued)

As of December 31, 2012, based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	Pass		Special Mention		Substandard		Nonaccrual		Total
One-to-four family residential real estate loans	$	152,711	$	—	$	1,428	$	6,158	$	160,297
One-to-four family residential real estate loans non-owner occupied	51,849		1,486		3,440		1,524		58,299
Multi-family mortgage loans	275,338		6,139		21,128		3,559		306,164
Wholesale commercial lending	44,074		—		1,781		—		45,855
Nonresidential real estate loans	199,802		30,898		22,345		11,627		264,672
Construction loans	—		—		—		—		—
Land loans	2,769		158		2,394		3,231		8,552
Commercial loans:									—
Secured	19,579		2,418		988		225		23,210
Unsecured	4,061		323		1,497		52		5,933
Municipal loans	4,751		—		—		—		4,751
Warehouse lines	2,971		—		—		—		2,971
Health care	17,566		—		—		—		17,566
Other	6,957		—		—		—		6,957
Commercial leases:									—
Investment rated commercial leases	102,101		—		—		—		102,101
Below investment grade	9,205		—		—		—		9,205
Non-rated	25,466		—		—		—		25,466
Lease pools	3,011		—		—		—		3,011
Consumer loans	2,742		—		3		—		2,745
Total	$	924,953	$	41,422	$	55,004	$	26,376	$	1,047,755

NOTE 5 – FAIR VALUE

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

• Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

• Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

• Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

Securities: The fair values of marketable equity securities are generally determined by quoted prices, in active markets, for each specific security (Level 1). If Level 1 measurement inputs are not available for a marketable equity security, we determine its fair value based on the quoted price of a similar security traded in an active market (Level 2). The fair values of debt securities are generally determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2).

24

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 5 - FAIR VALUE (continued)

Loans Held for Sale: Loans held for sale are carried at the lower of cost or fair value, which is evaluated on a pool-level basis. The fair value of loans held for sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan or other observable market data, such as outstanding commitments from third party investors (Level 2).

Impaired Loans: At the time a loan is considered impaired, management measures impairment in accordance with ASC Topic 310. The fair value of impaired loans is estimated using one of several methods, including collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. Impaired loans carried at fair value generally require a partial charge off and a specific valuation allowance for loan losses. For collateral dependent loans, fair value is commonly based on recent real estate appraisals. These real estate appraisals may include up to three approaches to value: the sales comparison approach, the income approach (for income-producing property) and the cost approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available, if applicable. Such adjustments may be significant and typically result in a Level 3 classification of the inputs for determining fair value. In addition, a discount is typically applied to account for sales and holding expenses. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly. The method utilized to estimate the fair value of loans does not necessarily represent an exit price.

Other Real Estate Owned: Assets acquired through foreclosure or transfers in lieu of foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals. Although the fair value of the property normally will be based on an appraisal (or other evaluation), the valuation should be consistent with the price that a market participant will pay to purchase the property at the measurement date. Circumstances may exist that indicate that the appraised value is not an accurate measurement of the property's current fair value. Examples of such circumstances include changed economic conditions since the last appraisal, stale appraisals, or imprecision and subjectivity in the appraisal process (i.e., actual sales for less than the appraised amount). Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Mortgage Servicing Rights: On a quarterly basis, loan servicing rights are evaluated for impairment based upon the fair value of the rights as compared to carrying amount. The fair values of mortgage servicing rights are based on a valuation model that calculates the present value of estimated net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income. The Company is able to compare the valuation model inputs and results to widely available published industry data for reasonableness (Level 3).

25

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 5 - FAIR VALUE (continued)

The following table sets forth the Company’s financial assets that were accounted for at fair value and are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value
March 31, 2013
Securities:
Certificates of deposit	$	—	$	22,281	$	—	$	22,281
Municipal securities	—		366		—		366
Equity mutual fund	524		—		—		524
Mortgage-backed securities – residential	—		32,609		—		32,609
Collateralized mortgage obligations – residential	—		5,453		—		5,453
SBA-guaranteed loan participation certificates	—		40		—		40
	$	524	$	60,749	$	—	$	61,273
December 31, 2012
Securities:
Certificates of deposit	$	—	$	33,456	$	—	$	33,456
Municipal securities	—		369		—		369
Equity mutual fund	528		—		—		528
Mortgage-backed securities - residential	—		34,233		—		34,233
Collateralized mortgage obligations – residential	—		9,204		—		9,204
SBA-guaranteed loan participation certificates	—		42		—		42
	$	528	$	77,304	$	—	$	77,832

26

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 5 - FAIR VALUE (continued)

The following table sets forth the Company’s assets that were measured at fair value on a non-recurring basis:

	Fair Value Measurement Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value
March 31, 2013
Impaired loans:
One–to–four family residential real estate loans	$	—	$	—	$	186	$	186
Multi-family mortgage loans	—		—		2,999		2,999
Nonresidential real estate loans	—		—		3,014		3,014
Construction and land loans	—		—		2,150		2,150
Commercial loans	—		—		750		750
	$	—	$	—	$	9,099	$	9,099
Other real estate owned:
One–to–four family residential real estate	$	—	$	—	$	1,720	$	1,720
Multi-family mortgage	—		—		—		—
Nonresidential real estate	—		—		3,268		3,268
Land	—		—		3,100		3,100
	$	—	$	—	$	8,088	$	8,088
Mortgage servicing rights	$	—	$	—	$	211	$	211
December 31, 2012
Impaired loans:
One–to–four family residential real estate loans	$	—	$	—	$	410	$	410
Multi-family mortgage loans	—		—		1,932		1,932
Nonresidential real estate loans	—		—		3,110		3,110
Construction and land loans	—		—		2,840		2,840
Commercial loans	—		—		181		181
	$	—	$	—	$	8,473	$	8,473
Other real estate owned:
One–to–four family residential real estate	$	—	$	—	$	2,080	$	2,080
Multi-family mortgage	—		—		720		720
Nonresidential real estate	—		—		3,966		3,966
Land	—		—		3,592		3,592
	$	—	$	—	$	10,358	$	10,358
Mortgage servicing rights	$	—	$	—	$	208	$	208

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral–dependent loans, had a carrying amount of $28.5 million, with a valuation allowance of $1.5 million at March 31, 2013, compared to a carrying amount of $28.4 million and a valuation allowance of $1.7 million at December 31, 2012, resulting in a decrease in the provision for loan losses of $163,000 for three months ended March 31, 2013.

27

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 5 - FAIR VALUE (continued)

OREO, which is carried at the lower of cost or fair value less costs to sell, had a carrying value of $8.1 million at March 31, 2013, which included valuation adjustments of $1.3 million, compared to $10.4 million at December 31, 2012, which included valuation adjustments of $1.2 million, resulting in an increase in the valuation adjustments of $89,000, reduced by sales for the three months ended March 31, 2013.

Mortgage servicing rights, which are carried at lower of cost or fair value, had a carrying amount of $1.0 million at March 31, 2013, of which $757,000 related to fixed rate loans and $256,000 related to adjustable rate loans. Mortgage servicing rights had a carrying amount of $1.0 million at December 31, 2012, of which $756,000 related to fixed rate loans and $264,000 related to adjustable rate loans. A pre–tax recovery of $26,000 on our fixed rate mortgage servicing rights portfolio was included in noninterest income for the three months ended March 31, 2013, compared to a $13,000 provision for the same period in 2012.

28

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 5 - FAIR VALUE (continued)

The following table presents quantitative information, based on certain empirical data with respect to Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at March 31, 2013:

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired loans:
One-to-four family residential real estate loans	$	186	Sales comparison	Discount applied to valuation	6%-90% (67%)
Multi-family mortgage loans	2,999		Sales comparison	Comparison between sales and income approaches	2%-95% (47%)
			Income approach	Cap Rate	6.2% to 11.8% (7.65%)
Nonresidential real estate loans	3,014		Sales comparison	Comparison between sales and income approaches	6%-99% (63%)
			Income approach	Cap Rate	8.5%-10.3% (8.93%)
Construction and land loans	2,150		Sales comparison	Discount applied to valuation	10%-29% (28%)
Commercial loans	750		Sales comparison	Discount applied to valuation	0%-11% (58%)
Impaired loans	$	9,099
Other real estate owned:
One-to-four family residential real estate	$	1,720	Sales comparison	Discount applied to valuation	7%-77% (18%)
Nonresidential real estate	3,268		Sales comparison	Comparison between sales and income approaches	7%-30% (24%)
Land	3,100		Sales comparison	Discount applied to valuation	7%-21% (10%)
Other real estate owned	$	8,088
Mortgage servicing rights	$	211	Third party valuation	Present value of future servicing income based on prepayment speeds	12.3 % - 25.7% (17.16%)
			Third party valuation	Present value of future servicing income based on default rates	12%

29

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 5 - FAIR VALUE (continued)

The carrying amount and estimated fair value of financial instruments is as follows:

				Fair Value Measurements at March 31, 2013 Using:
	Carrying Amount			Level 1		Level 2			Level 3		Total
Financial assets
Cash and cash equivalents	$	311,128		$	17,742	$	293,386		$	—	$	311,128
Securities	61,273			524		60,749			—		61,273
Loans held-for-sale	55			—		55			—		55
Loans receivable, net of allowance for loan losses	1,004,404			—		964,073			9,099		973,172
FHLBC stock	7,566			—		—			—		N/A
Accrued interest receivable	3,951			—		3,951			—		3,951
Financial liabilities											—
Noninterest-bearing demand deposits	$	(131,856	)	$	—	$	(131,856	)	$	—	$	(131,856	)
Savings deposits	(148,184		)	—		(148,184		)	—		(148,184		)
NOW and money market accounts	(693,650		)	—		(693,650		)	—		(693,650		)
Certificates of deposit	(297,860		)	—		(299,298		)	—		(299,298		)
Borrowings	(2,740		)	—		(2,777		)	—		(2,777		)
Accrued interest payable	(137		)	—		(137		)	—		(137		)

				Fair Value Measurements at  December 31, 2012 Using:
	Carrying Amount			Level 1		Level 2			Level 3		Total
Financial assets
Cash and cash equivalents	$	275,764		$	20,361	$	255,403		$	—	$	275,764
Securities	77,832			528		77,304			—		77,832
Loans held-for-sale	2,166			—		2,166			—		2,166
Loans receivable, net of allowance for loan losses	1,030,465			—		999,578			8,473		1,008,051
FHLBC stock	8,412			—		—			—		N/A
Accrued interest receivable	38,251			—		38,251			—		38,251
Financial liabilities
Noninterest-bearing demand deposits	$	(134,597	)	$	—	$	(134,597	)	$	—	$	(134,597	)
Savings deposits	(144,726		)	—		(144,726		)	—		(144,726		)
NOW and money market accounts	(697,775		)	—		(697,775		)	—		(697,775		)
Certificates of deposit	(305,253		)	—		(306,859		)	—		(306,859		)
Borrowings	(5,567		)	—		(5,608		)	—		(5,608		)
Accrued interest payable	(157		)	—		(157		)	—		(157		)

For purposes of the above, the following assumptions were used:

Cash and Cash Equivalents: The estimated fair values for cash and cash equivalents are based on their carrying value due to the short-term nature of these assets.

Loans: The estimated fair value for loans has been determined by calculating the present value of future cash flows based on the current rate the Company would charge for similar loans with similar maturities, applied for an estimated time period until the loan is assumed to be repriced or repaid. The estimated fair values of loans held-for-sale are based on quoted market prices.

30

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 5 - FAIR VALUE (continued)

FHLBC Stock: It is not practicable to determine the fair value of FHLBC stock due to the restrictions placed on its transferability.

Deposit Liabilities: The estimated fair value for certificates of deposit has been determined by calculating the present value of future cash flows based on estimates of rates the Company would pay on such deposits, applied for the time period until maturity. The estimated fair values of noninterest-bearing demand, NOW, money market, and savings deposits are assumed to approximate their carrying values as management establishes rates on these deposits at a level that approximates the local market area. Additionally, these deposits can be withdrawn on demand.

Borrowings: The estimated fair values of advances from the FHLBC and notes payable are based on current market rates for similar financing. The estimated fair value of securities sold under agreements to repurchase is assumed to equal its carrying value due to the short-term nature of the liability.

Accrued Interest: The estimated fair values of accrued interest receivable and payable are assumed to equal their carrying value.

Off-Balance-Sheet Instruments: Off-balance-sheet items consist principally of unfunded loan commitments, standby letters of credit, and unused lines of credit. The estimated fair values of unfunded loan commitments, standby letters of credit, and unused lines of credit are not material.

While the above estimates are based on management’s judgment of the most appropriate factors, as of the balance sheet date, there is no assurance that the estimated fair values would have been realized if the assets were disposed of or the liabilities settled at that date, since market values may differ depending on the various circumstances. The estimated fair values would also not apply to subsequent dates.

In addition, other assets and liabilities that are not financial instruments, such as premises and equipment, are not included in the above disclosures.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Regarding Forward-Looking Information

Forward Looking Statements

This Quarterly Report on Form 10-Q contains, and other periodic and current reports, press releases and other public stockholder communications of BankFinancial Corporation may contain, forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that involve significant risks and uncertainties. Forward-looking statements may include statements relating to our future plans, strategies and expectations, as well as our future revenues, earnings, losses, financial performance, financial condition, asset quality metrics and future prospects. Forward looking statements are generally identifiable by use of the words “believe,” “may,” “will,” “should,” “could,” “expect,” “estimate,” “intend,” “anticipate,” “project,” “plan,” or similar expressions. Forward looking statements speak only as of the date made. They are frequently based on assumptions that may or may not materialize, and are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the forward looking statements. We intend all forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for the purpose of invoking these safe harbor provisions.

Factors that could cause actual results to differ materially from the results anticipated or projected and which could materially and adversely affect our operating results, financial condition or future prospects include, but are not limited to: (i) the failure of the real estate market to recover or further declines in real estate values that adversely impact the value of our loan collateral and OREO, asset dispositions and the level of borrower equity in their investments; (ii) the persistence or worsening of adverse economic conditions in general and in the Chicago metropolitan area in particular, including high or increasing unemployment levels, that could result in increased delinquencies in our loan portfolio or a decline in the value of our investment securities and the collateral for our loans; (iii) results of supervisory monitoring or examinations by regulatory authorities, including the possibility that a regulatory authority could, among other things, require us to increase our allowance for loan losses or adversely change our loan classifications, write-down assets, reduce credit concentrations or maintain specific capital levels; (iv) interest rate movements and their impact on customer behavior and our net interest margin; (v) less than anticipated loan growth due to a lack of demand for specific loan products, competitive pressures or a dearth of borrowers who meet our underwriting standards; (vi) changes, disruptions or illiquidity in national or global financial markets; (vii) the credit risks of lending activities, including risks that could cause changes in the level and direction of loan delinquencies and charge-offs or changes in estimates relating to the computation of our allowance for loan losses; (viii) monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury

31

and Federal Reserve Board; (ix) factors affecting our ability to access deposits or cost-effective funding, and the impact of competitors' pricing initiatives on our deposit products; (x) the impact of new legislation or regulatory changes, including the Dodd-Frank Act, on our products, services, operations and operating expenses; (xi) higher federal deposit insurance premiums; (xii) higher than expected overhead, infrastructure and compliance costs; (xiii) changes in accounting principles, policies or guidelines; and (xiv) and our failure to achieve expected synergies and cost savings from acquisitions.

These risks and uncertainties, as well as the Risk Factors set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2012, should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We do not undertake any obligation to update any forward-looking statement in the future, or to reflect circumstances and events that occur after the date on which the forward-looking statement was made.

Critical Accounting Policies

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and could potentially result in materially different results under different assumptions and conditions. We believe that the most critical accounting policies upon which our financial condition and results of operation depend, and which involve the most complex subjective decisions or assessments, are included in the discussion entitled “Critical Accounting Policies” in Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2012, and all amendments thereto, as filed with the Securities and Exchange Commission.

Overview

Continuing the trends commenced in the fourth quarter of 2012, loan origination activity improved in the first quarter of 2013, especially in the multifamily, non-residential real estate and commercial leasing categories. The net reductions in balances in multifamily and non-residential loans were due in part to continued progress in resolving Watch List, Special Mention or Substandard loans. Residential loan origination volumes were essentially constant compared to the fourth quarter of 2012. Despite a modest growth in commercial & industrial loan originations, the net balance of commercial & industrial loans decreased due to increased remittances of health-care receivables by the State of Illinois, with a corresponding decline in health care line of credit exposures, and repayments of commercial lease bridge line of credit facilities due to increased final originations of commercial leases. Continued improvement in loan origination volumes remains essential to offsetting the ongoing effects of yield compression on our net interest income.

Asset quality improved modestly in the first quarter of 2013, with the Company's classified assets to capital ratio at 46%. In addition, we continued to reduce OREO balances at an acceptable rate with minimal impact to earnings and capital during the quarter.

Beginning in the fourth quarter, 2012 and continuing in 2013, we determined that for certain performing classified and non-performing multifamily and non-residential real estate loans, the most cost-effective and expeditious resolution method was to decline to renew the loans upon maturity or to utilize other remedies provided by our loan documents to accelerate the maturity date of the loans, together with an attempt to negotiate a final resolution in the form of a deed-in-lieu of foreclosure. Of the $10.3 million in loans placed on non-accrual in the first quarter of 2013, $7.3 million related to affirmative steps that we took to expedite resolution. We believe this approach has the potential to further reduce classified and non-performing assets more rapidly and with lower litigation costs given current judicial foreclosure processes.

Our provision for loan losses increased in the first quarter of 2013 due principally to the receipt of an updated appraisal on land securing a loan to a local physician that we acquired in the Downers Grove National Bank transaction. Pursuant to the foregoing expedited resolution strategy, we declined to renew the loans at maturity in the fourth quarter of 2012 and obtained updated collateral valuations in the first quarter of 2013.

Non-interest income deposit fee income declined in the first quarter of 2013 due to reduced customer withdrawal activity within the check, ATM and debit card channels. The decline in activity reflects seasonal factors, the continuing impact of the Dodd-Frank Act legislation and payroll taxes on retail customer behavior, and reductions in commercial customer account net fee income due to higher average balances. The gain on sale of newly-originated residential loans was essentially constant in the first quarter of 2013 but we noted significantly increased residential loan application activity at the beginning of the second quarter of 2013 due to new Internet marketing methods that we implemented for residential loans. The gain on sale related to our bulk sale of non-performing loans reflected improved pricing obtained in the final bidding process during first quarter of 2013.

Non-interest expense declined in the first quarter of 2013 despite seasonal effects within the compensation and benefits category as well as the recording of certain trailing legal and other expenses related to bulk sales activity. The Company's full-time equivalent employment levels declined slightly during the first quarter of 2013, reflecting the initial implementation of our updated operations review; we anticipate that our full-time employments levels will decline to a range between 305 and 315 by the end of the second quarter of 2013. These changes reflect the reductions in customer transaction volumes in branch offices, due to increased usage

32

of electronic banking channels, completion of technology conversion projects, elimination of Downers Grove National Bank merger/acquisition integration resources, and a consolidation of resources within various operational functions.

SELECTED FINANCIAL DATA

The following summary information is derived from the consolidated financial statements of the Company. For additional information, reference is made to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements of the Company and related notes included elsewhere in this Quarterly Report.

	March 31, 2013		December 31, 2012		Change
	(Dollars in thousands)
Selected Financial Condition Data:
Total assets	$	1,466,135	$	1,481,192	$	(15,057	)
Loans, net	1,004,404		1,030,465		(26,061		)
Loans held-for-sale	55		2,166		(2,111		)
Securities, at fair value	61,273		77,832		(16,559		)
Core deposit intangible	2,882		3,038		(156		)
Deposits	1,271,550		1,282,351		(10,801		)
Borrowings	2,740		5,567		(2,827		)
Equity	173,639		172,890		749
	For the Three Months Ended March 31,
	2013		2012		Change
	(Dollars in thousands)
Selected Operating Data:
Interest and dividend income	$	12,713	$	16,634	$	(3,921	)
Interest expense	994		1,240		(246		)
Net interest income	11,719		15,394		(3,675		)
Provision for loan losses	722		996		(274		)
Net interest income after provision for loan losses	10,997		14,398		(3,401		)
Noninterest income	2,866		1,832		1,034
Noninterest expense	13,185		13,436		(251		)
Income before income tax expense	678		2,794		(2,116		)
Income tax expense	—		457		(457		)
Net income	$	678	$	2,337	$	(1,659	)

33

	For the Three Months Ended March 31,
	2013			2012
Selected Financial Ratios and Other Data:
Performance Ratios:
Return on assets (ratio of net income to average total assets) (1)	0.19		%	0.61		%
Return on equity (ratio of net income to average equity) (1)	1.55			4.61
Average equity to average assets	11.95			13.16
Net interest rate spread (1) (2)	3.39			4.18
Net interest margin (1) (3)	3.45			4.26
Efficiency ratio (4)	90.40			78.00
Noninterest expense to average total assets (1)	3.61			3.49
Average interest-earning assets to average interest-bearing liabilities	120.81			122.46
Dividends declared per share	$	—		$	0.01
Dividend payout ratio	N.M.			N.M.

	At March 31, 2013		At December 31, 2012
Asset Quality Ratios:
Nonperforming assets to total assets (5)	2.56	%	2.59	%
Nonperforming loans to total loans	2.89		2.67
Allowance for loan losses to nonperforming loans	59.24		64.39
Allowance for loan losses to total loans	1.71		1.72
Capital Ratios:
Equity to total assets at end of period	11.84	%	11.67	%
Tier 1 leverage ratio (Bank only)	9.77		9.60
Other Data:
Number of full-service offices	20		20
Employees (full-time equivalents)	347		352

(1) Ratios annualized.

(2) The net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities for the period.

(3) The net interest margin represents net interest income divided by average total interest-earning assets for the period.

(4) The efficiency ratio represents noninterest expense, divided by the sum of net interest income and noninterest income.

(5) Nonperforming assets include nonperforming loans and other real estate owned.

N.M. Not Meaningful

Comparison of Financial Condition at March 31, 2013 and December 31, 2012

Total assets decreased $15.1 million, or 1.0%, to $1.466 billion at March 31, 2013, from $1.481 billion at December 31, 2012. The decrease in total assets was primarily due to a decrease in loans receivable and securities. The decrease was partially offset by an increase in cash and cash equivalents. Net loans decreased $26.1 million to $1.004 billion at March 31, 2013, from $1.030 billion at December 31, 2012. In December 2012, we designated certain owner-occupied and investor-owned one-to-four family residential loans with a carrying value of $7.5 million as “held for sale” in preparation for a bulk sale. The sale of the one-to-four family residential loans was completed in February 2013. Securities decreased $16.6 million to $61.3 million at March 31, 2013, from $77.8 million at December 31, 2012. Net cash and cash equivalents increased by $35.4 million to $311.1 million at March 31, 2013, from $275.8 million at December 31, 2012.

Total liabilities decreased by $15.8 million, or 1.2%, to $1.292 billion at March 31, 2013, from $1.308 billion at December 31, 2012. Total deposits decreased $10.8 million, or 0.8%, to $1.272 billion at March 31, 2013, from $1.282 billion at December 31, 2012, primarily due to deposit pricing adjustments that we made in anticipation of additional excess liquidity resulting from loan

34

payments and bulk sales of loans. Certificates of deposit decreased $7.4 million, or 2.4%, to $297.9 million at March 31, 2013, from $305.3 million at December 31, 2012. Core deposits increased to 76.6% of total deposits at March 31, 2013, from 76.2% of total deposits at December 31, 2012. Noninterest-bearing demand deposits decreased $2.7 million, or 2.0%, to $131.9 million at March 31, 2013, from $134.6 million at December 31, 2012. Savings accounts increased $3.5 million, or 2.4%, to $148.2 million at March 31, 2013, from $144.7 million at December 31, 2012. Money market and interest-bearing NOW accounts decreased $4.1 million, or 0.6%, to $693.7 million at March 31, 2013, from $697.8 million at December 31, 2012.

Total stockholders’ equity was $173.6 million at March 31, 2013, compared to $172.9 million at December 31, 2012. The increase in total stockholders’ equity was primarily due to the $678,000 net income that we recorded for three months ended March 31, 2013. The unallocated shares of common stock that our ESOP owns were reflected as a $12.0 million reduction to stockholders’ equity at March 31, 2013, compared to $12.2 million reduction at December 31, 2012.

Operating results for the three months ended March 31, 2013 and 2012

Net Income.We had net income of $678,000 for three months ended March 31, 2013 compared to $2.3 million for the three months ended March 31, 2012. Our earnings per share of common stock was $0.03 per basic and fully diluted share, for the three months ended March 31, 2013, compared to $0.12 per basic and fully diluted share for the three months ended March 31, 2012.

Net Interest Income. Net interest income was $11.7 million for the three months ended March 31, 2013, compared to $15.4 million for the same period in 2012. The decrease reflected a $3.9 million decrease in interest income and a $246,000 decrease in interest expense.

The decrease in net interest income was primarily attributable to a lower level of average interest-earning assets. Total average interest-earning assets decreased $75.0 million, or 5.2%, to $1.379 billion for the three months ended March 31, 2013, from $1.454 billion for the same period in 2012. Our net interest rate spread decreased by 79 basis points to 3.39% for the three months ended March 31, 2013, from 4.18% for the same period in 2012. Our net interest margin decreased by 81 basis points to 3.45% for the three months ended March 31, 2013, from 4.26% for the same period in 2012. The decrease in the net interest spread and margin was a result of lower yields on interest earning assets, which was partially offset by a lower cost of funds. The yield on interest earning assets decreased 86 basis points to 3.74% for the three months ended March 31, 2013, from 4.60% for the same period in 2012, and the cost of interest bearing liabilities decreased seven basis points to 0.35% for the three months ended March 31, 2013, from 0.42% for the same period in 2012.

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Average Balance Sheets

The following table sets forth average balance sheets, average yields and costs, and certain other information. No tax-equivalent yield adjustments were made, as the effect of these adjustments would not be material. Average balances are daily average balances. Nonaccrual loans are included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees and expenses, discounts and premiums, purchase accounting adjustments that are amortized or accreted to interest income or expense.

	Three months ended March 31,
	2013							2012
	Average Outstanding Balance			Interest		Yield/Rate(1)		Average Outstanding Balance			Interest		Yield/Rate (1)
	(Dollars in thousands)
Interest-earning Assets:
Loans	$	1,028,907		$	12,278	4.84	%	$	1,236,234		$	16,112	5.24	%
Securities	73,284			250		1.39		88,448			442		2.01
Stock in FHLBC	8,026			6		0.30		13,868			4		0.12
Other	268,939			179		0.27		115,567			76		0.26
Total interest-earning assets	1,379,156			12,713		3.74		1,454,117			16,634		4.60
Noninterest-earning assets	82,963							87,698
Total assets	$	1,462,119						$	1,541,815
Interest-bearing Liabilities:
Savings deposits	$	145,932		37		0.10		$	145,544		37		0.10
Money market accounts	345,483			313		0.37		345,339			314		0.37
NOW accounts	346,495			105		0.12		331,459			98		0.12
Certificates of deposit	300,528			531		0.72		355,921			765		0.86
Total deposits	1,138,438			986		0.35		1,178,263			1,214		0.41
Borrowings	3,187			8		1.02		9,183			26		1.14
Total interest-bearing liabilities	1,141,625			994		0.35		1,187,446			1,240		0.42
Noninterest-bearing deposits	128,365							131,914
Noninterest-bearing liabilities	17,363							19,520
Total liabilities	1,287,353							1,338,880
Equity	174,766							202,935
Total liabilities and equity	$	1,462,119						$	1,541,815
Net interest income				$	11,719						$	15,394
Net interest rate spread (2)						3.39	%						4.18	%
Net interest-earning assets (3)	$	237,531						$	266,671
Net interest margin (4)						3.45	%						4.26	%
Ratio of interest-earning assets to interest-bearing liabilities	120.81		%					122.46		%

(1) Annualized

(2) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(3) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

(4) Net interest margin represents net interest income divided by average total interest-earning assets.

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Provision for Loan Losses

We establish provisions for loan losses, which are charged to operations in order to maintain the allowance for loan losses at a level we consider necessary to absorb probable incurred credit losses in the loan portfolio. In determining the level of the allowance for loan losses, we consider past and current loss experience, evaluations of real estate collateral, current economic conditions, volume and type of lending, adverse situations that may affect a borrower’s ability to repay a loan and the levels of nonperforming and other classified loans. The amount of the allowance is based on estimates and the ultimate losses may vary from such estimates as more information becomes available or events change. We assess the allowance for loan losses on a quarterly basis and make provisions for loan losses in order to maintain the allowance.

The provision for loan losses totaled $722,000 for the three months ended March 31, 2013, compared to $996,000 for the same period in 2012. The provision for loan losses is a function of the allowance for loan loss methodology we use to determine the appropriate level of the allowance for inherent loan losses after net charge-offs have been deducted. Net charge-offs were $1.3 million for the three months ended March 31, 2013, compared to $1.1 million for the same period in 2012. The allowance for loan losses as a percentage of nonperforming loans was 59.24% at March 31, 2013, compared to 64.39% at December 31, 2012. Loans collectively evaluated for impairment decreased $26.7 million, or 2.6%, to $992.6 million at March 31, 2013, compared to $1.019 billion at December 31, 2012. The related loan loss decreased $419,000, or 2.6%, to $15.9 million at March 31, 2013, compared to $16.3 million at December 31, 2012.

A loan balance is classified as a loss and charged-off when it is confirmed that there is no readily apparent source of repayment for the portion of the loan that is classified as loss. Confirmation can occur upon the receipt of updated third-party appraisal valuation information indicating that there is a low probability of repayment upon sale of the collateral, the final disposition of collateral where the net proceeds are insufficient to pay the loan balance in full, our failure to obtain possession of certain consumer-loan collateral within certain time limits specified by applicable federal regulations, the conclusion of legal proceedings where the borrower’s obligation to repay is legally discharged (such as a Chapter 7 bankruptcy proceeding), or when it appears that further formal collection procedures are not likely to result in net proceeds in excess of the costs to collect.

Noninterest Income

	Three months ended March 31,
	2013			2012			Change
	(Dollars in thousands)
Deposit service charges and fees	$	499		$	557		$	(58	)
Other fee income	375			385			(10		)
Insurance commissions and annuities income	109			122			(13		)
Gain on sale of loans, net	1,417			267			1,150
Loan servicing fees	123			128			(5		)
Amortization of servicing assets	(59		)	(69		)	10
Recovery (impairment) of servicing assets	26			(13		)	39
Earnings on bank owned life insurance	70			126			(56		)
Trust income	181			184			(3		)
Other	125			145			(20		)
Total noninterest income	$	2,866		$	1,832		$	1,034

Noninterest income increased by $1.0 million to $2.9 million for the three months ended March 31, 2013, from $1.8 million for 2012. Noninterest income for the three months ended March 31, 2013, included $1.4 million gain on sale of loans which included recurring loan sale activity combined with the completion of the sale of the owner-occupied and investor-owned one-to-four family residential loans that we designated as held for sale at December 31, 2012. The completion of this sale resulted in pre-tax gain on sale of loans of approximately $1.3 million.

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Noninterest Expense

	Three months ended March 31,
	2013		2012			Change
	(Dollars in thousands)
Compensation and benefits	$	6,752	$	6,679		$	73
Office occupancy and equipment	1,948		2,032			(84		)
Advertising and public relations	146		106			40
Information technology	749		848			(99		)
Supplies, telephone and postage	461		390			71
Amortization of intangibles	156		163			(7		)
Nonperforming asset management	694		1,240			(546		)
Loss (gain) on sale other real estate owned	69		(139		)	208
Valuation adjustments of other real estate owned	89		389			(300		)
Operations of other real estate owned	353		302			51
FDIC insurance premiums	492		348			144
Other	1,276		1,078			198
Total noninterest expense	$	13,185	$	13,436		$	(251	)

Noninterest expense decreased by $251,000, or 1.9%, to $13.2 million for the three months ended March 31, 2013, from $13.4 million for the same period in 2012. Noninterest expense for three months ended March 31, 2013 included $1.2 million of nonperforming asset management and OREO expenses, compared to $1.8 million for the same period in 2012. Nonperforming asset management expenses decreased $546,000, or 44.0%, to $694,000for the year ended March 31, 2013, compared to $1.2 million for the same period in 2012, primarily due to the decline in nonperforming assets and a decline in expenses relating to resolutions and accelerated dispositions of nonperforming assets. The three months ended March 31, 2013 included an $89,000 valuation adjustment to OREO properties, compared to a $389,000 valuation adjustment to OREO properties for the same period in 2012. Noninterest expense for the three months ended March 31, 2013 also included the payment of $203,000 of settlements concerning two sold mortgage loans. The first settlement was based on our inclusion of an ineligible retirement plan in calculating the borrower's available liquidity, and the second involved a servicing error relating to the premature termination of private mortgage insurance.

Income Taxes

For the three months ended March 31, 2013, we recorded no income tax expense or benefit due to the full valuation allowance we established for deferred tax assets, compared to an income tax expense of $457,000 for three months ended March 31, 2012.

Nonperforming Loans and Assets

We review loans on a regular basis, and generally place loans on nonaccrual status when either principal or interest is 90 days or more past due. In addition, the Company places loans on nonaccrual status when we do not expect to receive full payment of interest or principal. Interest accrued and unpaid at the time a loan is placed on nonaccrual status is reversed from interest income. Interest payments received on nonaccrual loans are recognized in accordance with our significant accounting policies. Once a loan is placed on nonaccrual status, the borrower must generally demonstrate at least six months of payment performance before the loan is eligible to return to accrual status. We may have loans classified as 90 days or more delinquent and still accruing. Generally, we do not utilize this category of loan classification unless: (1) the loan is repaid in full shortly after the period end date; (2) the loan is well secured and there are no asserted or pending legal barriers to its collection; or (3) the borrower has remitted all scheduled payments and is otherwise in substantial compliance with the terms of the loan, but the processing of loan payments actually received or the renewal of the loan has not occurred for administrative reasons. At March 31, 2013, we had one loan totaling $243,000 in this category.

We typically obtain new third–party appraisals or collateral valuations when we place a loan on nonaccrual status, conduct impairment testing or conduct a TDR unless the existing valuation information for the collateral is sufficiently current to comply with the requirements of our Appraisal and Collateral Valuation Policy (“ACV Policy”). We also obtain new third–party appraisals or collateral valuations when the judicial foreclosure process concludes with respect to real estate collateral, and when we otherwise acquire actual or constructive title to real estate collateral. In addition to third–party appraisals, we use updated valuation information based on Multiple Listing Service data, broker opinions of value, actual sales prices of similar assets sold by us and approved sales

38

prices in response to offers to purchase similar assets owned by us to provide interim valuation information for consolidated financial statement and management purposes. Our ACV Policy establishes the maximum useful life of a real estate appraisal at 18 months. Because appraisals and updated valuations utilize historical or “ask–side” data in reaching valuation conclusions, the appraised or updated valuation may or may not reflect the actual sales price that we will receive at the time of sale.

Real estate appraisals may include up to three approaches to value: the sales comparison approach, the income approach (for income-producing property) and the cost approach. Not all appraisals utilize all three approaches. Depending on the nature of the collateral and market conditions, we may emphasize one approach over another in determining the fair value of real estate collateral. Appraisals may also contain different estimates of value based on the level of occupancy or planned future improvements. “As-is” valuations represent an estimate of value based on current market conditions with no changes to the use or condition of the real estate collateral. “As-stabilized” or “as-completed” valuations assume the real estate collateral will be improved to a stated standard or achieve its highest and best use in terms of occupancy. “As-stabilized” or “as-completed” valuations may be subject to a present value adjustment for market conditions or the schedule of improvements.

As part of the asset classification process, we develop an exit strategy for real estate collateral or OREO by assessing overall market conditions, the current use and condition of the asset, and its highest and best use. For most income–producing real estate, we believe that investors value most highly a stable income stream from the asset; consequently, we perform a comparative evaluation to determine whether conducting a sale on an “as–is”, “as–stabilized” or “as–improved” basis is most likely to produce the highest net realizable value. If we determine that the “as–stabilized” or “as–improved” basis is appropriate, we then complete the necessary improvements or tenant stabilization tasks, with the applicable time value discount and improvement expenses incorporated into our estimates of the expected costs to sell. As of March 31, 2013, substantially all impaired real estate loan collateral and OREO were valued on an “as–is basis.”

Estimates of the net realizable value of real estate collateral also include a deduction for the expected costs to sell the collateral or such other deductions from the cash flows resulting from the operation and liquidation of the asset as are appropriate. For most real estate collateral subject to the judicial foreclosure process, we apply a 10.0% deduction to the value of the asset to determine the expected costs to sell the asset. This estimate includes one year of real estate taxes, sales commissions and miscellaneous repair and closing costs. If we receive a purchase offer that requires unbudgeted repairs, or if the expected resolution period for the asset exceeds one year, we then include, on a case-by-case basis, the costs of the additional real estate taxes and repairs and any other material holding costs in the expected costs to sell the collateral. For OREO, we only apply a 7.0% deduction to determine the expected costs to sell, as expenses for real estate taxes and repairs are expensed when incurred.

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Nonperforming Assets Summary

The following table below sets forth the amounts and categories of our nonperforming loans and nonperforming assets.

	March 31, 2013			December 31, 2012			Change
	(Dollars in thousands)
Nonaccrual loans:
One-to-four family residential	$	5,988		$	7,299		$	(1,311	)
Multi-family mortgage	10,822			3,517			7,305
Nonresidential real estate	6,182			8,985			(2,803		)
Construction and land	1,575			2,210			(635		)
Commercial	883			256			627
Consumer	11			—			11
	25,461			22,267			3,194
Loans held-for-sale	15			1,752			(1,737		)
Other real estate owned:
One-to-four family residential	1,515			1,760			(245		)
Multi-family mortgage	—			720			(720		)
Nonresidential real estate	2,896			3,504			(608		)
Land	1,144			1,323			(179		)
	5,555			7,307			(1,752		)
Nonperforming assets (excluding purchased impaired loans and purchased other real estate owned)	31,031			31,326			(295		)
Purchased impaired loans:
One-to-four family residential	388			380			8
Nonresidential real estate	2,554			2,568			(14		)
Construction and land	1,021			1,021			—
Commercial	21			20			1
	3,984			3,989			(5		)
Purchased other real estate owned:
One-to-four family residential	205			320			(115		)
Nonresidential real estate	372			462			(90		)
Land	1,956			2,269			(313		)
	2,533			3,051			(518		)
Purchased impaired loans and other real estate owned	6,517			7,040			(523		)
Total nonperforming assets	$	37,548		$	38,366		$	(818	)
Ratios:
Nonperforming loans to total loans	2.89		%	2.67		%
Nonperforming loans to total loans (1)	2.49			2.29
Nonperforming assets to total assets	2.56			2.59
Nonperforming assets to total assets(1)	2.12			2.11

(1) These asset quality ratios exclude purchased impaired loans and purchased other real estate owned resulting from the Downers Grove National Bank acquisition.

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Nonperforming Assets

Nonperforming assets decreased by $818,000, to $37.5 million at March 31, 2013, from $38.4 million at December 31, 2012. The decrease reflected the disposition of $2.7 million in OREO, the disposition of the $1.7 million of one- to four family mortgage loans that we designated as held for sale in the fourth quarter of 2012, and various other nonperforming asset resolutions, including the successful restructuring (followed by a sustained period of performance) of a $6.1 million total credit exposure that initially consisted of seven loans secured by industrial/flex suburban Chicago commercial real estate owned by a family-owned entity.  These actions were partially offset by the placement of $10.3 million of loans on nonaccrual status. In fourth quarter, 2012, we determined that for certain performing classified and non-performing multifamily or non-residential real estate loans, the most cost-effective and expeditious resolution method was to decline to renew the loans upon maturity, or to utilize other remedies provided by our loan documents to accelerate the maturity date of the loans, together with an attempt to negotiate a final resolution in the form of a deed-in-lieu of foreclosure. Of the $10.3 million in loans placed on non-accrual in the first quarter of 2013, $7.3 million related to affirmative expedited resolution cases. Of this amount, $6.4 million involved multifamily loans to five unaffiliated borrowers. We are pursuing various actions to attempt to obtain title to these multifamily properties so that they can be marketed for sale.

Other Real Estate Owned

Real estate that is acquired through foreclosure or a deed in lieu of foreclosure is classified as OREO until it is sold. When real estate is acquired through foreclosure or by deed in lieu of foreclosure, it is recorded at its fair value, less the estimated costs of disposal. If the fair value of the property is less than the loan balance, the difference is charged against the allowance for loan losses.

The following represents the rollfoward of OREO and the composition of OREO properties.

	Three months ended March 31,
	2013			2012
	(Dollars in thousands)
Beginning balance	$	10,358		$	22,480
New foreclosed properties	555			1,127
Valuation adjustments	(89		)	(573		)
Gain (loss) on sale of other real estate owned	(69		)	139
Proceeds from sales of other real estate owned	(2,667		)	(2,984		)
Ending balance	$	8,088		$	20,189

	March 31, 2013		December 31, 2012
	(Dollars in thousands)
One–to–four family residential	$	1,515	$	1,760
Multi-family mortgage	—		720
Nonresidential real estate	2,896		3,504
Land	1,144		1,323
	5,555		7,307
Acquired other real estate owned:
One–to–four family residential	205		320
Nonresidential real estate	372		462
Land	1,956		2,269
	2,533		3,051
Total other real estate owned	$	8,088	$	10,358

Liquidity and Capital Resources

Liquidity. The overall objective of our liquidity management is to ensure the availability of sufficient cash funds to meet all financial commitments and to take advantage of investment opportunities. We manage liquidity in order to meet deposit withdrawals on

41

demand or at contractual maturity, to repay borrowings as they mature, and to fund new loans and investments as opportunities arise.

Our primary sources of funds are deposits, principal and interest payments on loans and securities, and, to a lesser extent, wholesale borrowings, the proceeds from maturing securities and short-term investments, and the proceeds from the sales of loans and securities. The scheduled amortization of loans and securities, as well as proceeds from borrowings, are predictable sources of funds. Other funding sources, however, such as deposit inflows, mortgage prepayments and mortgage loan sales are greatly influenced by market interest rates, economic conditions and competition. We anticipate that we will have sufficient funds available to meet current loan commitments and lines of credit and maturing certificates of deposit that are not renewed or extended. We generally remain fully invested and utilize additional sources of funds through FHLBC advances. We had no outstanding advances at March 31, 2013.

As a result of the regulatory restructuring occasioned by the Dodd-Frank Act, the Company is subject to Federal Reserve Board Supervisory Letter SR 09-4, which provides that a holding company should, among other things, notify and make a submission to the Federal Reserve Bank prior to declaring a dividend if its net income for the current quarter is not sufficient to fully fund the dividend, and consider eliminating, deferring or significantly reducing its dividends if its net income for the current quarter is not sufficient to fully fund the dividends, or if its net income for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends. The Company will continue to consult with, and seek the prior approval of, the Federal Reserve Bank prior to declaring any dividends.

Supervisory Letter SR 09-4 also sets forth guidelines pertaining to share repurchases.

As of March 31, 2013, we were not aware of any known trends, events or uncertainties that had or were reasonably likely to have a material impact on our liquidity. As of March 31, 2013, we had no other material commitments for capital expenditures.

Capital Management

Capital Management - Bank. The overall objectives of our capital management are to ensure the availability of sufficient capital to support loan, deposit and other asset and liability growth opportunities and to maintain capital to absorb unforeseen losses or write-downs that are inherent in the business risks associated with the banking industry. We seek to balance the need for higher capital levels to address such unforeseen risks and the goal to achieve an adequate return on the capital invested by our stockholders.

The Bank is subject to regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by the Office of the Comptroller of the Currency that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by regulators about components, risk weightings, and other factors.

The prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. Adequately capitalized institutions require regulatory approval to accept brokered deposits. If undercapitalized, a financial institution’s capital distributions, asset growth and expansion are limited, and for the submission of a capital restoration is required.

The Company and the Bank have adopted Capital Plans that require the Bank to maintain a Tier 1 leverage ratio of at least 8% and a total risk-based capital ratio of at least 12%. The minimum capital ratios set forth in the Capital Plans will be increased and other minimum capital requirements will be established if and as necessary to comply with the Basel III requirements as such requirements become applicable to the Company and the Bank. In accordance with the Capital Plans, neither the Company nor the Bank will pursue any acquisition or growth opportunity, declare any dividend or conduct any stock repurchase that would cause the Bank's total risk-based capital ratio and/or its Tier 1 leverage ratio to fall below the established minimum capital levels. In addition, the Company will continue to maintain its ability to serve as a source of financial strength to the Bank by holding at least $5.0 million of cash or liquid assets for that purpose.

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Actual capital ratios and minimum required ratios for the Bank were:

	Actual Ratio		Minimum required to be Well Capitalized Under Prompt Corrective Action Provisions		Minimum Capital Ratios Established under Capital Plans
March 31, 2013
Total capital (to risk-weighted assets)	15.84	%	8.00	%	12.00	%
Tier 1 (core) capital (to risk-weighted assets)	14.59		4.00		8.00
Tier 1 (core) capital (to adjusted total assets)	9.77		4.00		8.00
December 31, 2012
Total capital (to risk-weighted assets)	15.32	%	8.00	%	12.00	%
Tier 1 (core) capital (to risk-weighted assets)	14.07		4.00		8.00
Tier 1 (core) capital (to adjusted total assets)	9.60		4.00		8.00

As of March 31, 2013 and December 31, 2012, the Bank was well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since those notifications that management believes have changed the Bank’s prompt corrective action capitalization category.

Capital Management - Company Total stockholders’ equity was $173.6 million at March 31, 2013, compared to $172.9 million at December 31, 2012. The increase in total stockholders’ equity was primarily due to the $678,000 net income that we recorded for the three months ended March 31, 2013. The unallocated shares of common stock that our ESOP owns were reflected as a $12.0 million reduction to stockholders’ equity at March 31, 2013, compared to $12.2 million at December 31, 2012.

Quarterly Cash Dividends. Our Board of Directors declared a quarterly cash dividend of $0.01 per share on April 11, 2013 payable on May 10, 2013 to stockholders of record on April 26, 2013. As a result of the regulatory restructuring occasioned by the Dodd-Frank Act, the Company is subject to Federal Reserve Board Supervisory Letter SR 09-4, which provides that a holding company should, among other things, notify and make a submission to the Federal Reserve Bank prior to declaring a dividend if its net income for the current quarter is not sufficient to fully fund the dividend, and consider eliminating, deferring or significantly reducing its dividends if its net income for the current quarter is not sufficient to fully fund the dividends, or if its net income for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends. The Company will continue to consult with, and seek the prior approval of, the Federal Reserve Bank prior to declaring any dividends.

Stock Repurchase Program. Our Board of Directors had authorized the repurchase of up to 5,047,423 shares of our common stock. The repurchase authorization expired on November 15, 2012. The authorization permitted shares to be repurchased in open market or negotiated transactions, and pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities and Exchange Commission. The authorization was utilized at management's discretion, subject to the limitations set forth in Rule 10b-18 of the Securities and Exchange Commission and other applicable legal requirements, and to price and other internal limitations established by the Board of Directors. As of March 31, 2013, the Company had repurchased 4,239,134 shares of its common stock out of the 5,047,423 shares that had been authorized for repurchase. Federal Reserve Board Supervisory Letter SR 09-4 provides that holding companies experiencing financial weaknesses such as operating losses should notify and make a submission to the Federal Reserve Bank before redeeming or repurchasing common stock. The Company has no plans to conduct such discussions with the Federal Reserve supervisory staff or engage in stock repurchases at this time.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Qualitative Analysis. A significant form of market risk is interest rate risk. Interest rate risk results from timing differences in the maturity or repricing of our assets, liabilities and off balance sheet contracts (i.e., forward loan commitments), the effect of loan prepayments and deposit withdrawals, the difference in the behavior of lending and funding rates arising from the use of different indices and “yield curve risk” arising from changing rate relationships across the spectrum of maturities for constant or variable credit risk investments. In addition to directly affecting net interest income, changes in market interest rates can also affect the amount of new loan originations, the ability of borrowers to repay variable rate loans, the volume of loan prepayments and refinancings, the carrying value of investment securities classified as available-for-sale and the flow and mix of deposits.

The general objective of our interest rate risk management is to determine the appropriate level of risk given our business strategy and then manage that risk in a manner that is consistent with our policy to reduce, to the extent possible, the exposure of our net

43

interest income to changes in market interest rates. Our Asset/Liability Management Committee (“ALCO”), which consists of certain members of senior management, evaluates the interest rate risk inherent in certain assets and liabilities, our operating environment and capital and liquidity requirements, and modifies our lending, investing and deposit gathering strategies accordingly. The Board of Directors’ Asset/Liability Management Committee then reviews the ALCO’s activities and strategies, the effect of those strategies on our net interest margin, and the effect that changes in market interest rates would have on the economic value of our loan and securities portfolios as well as the intrinsic value of our deposits and borrowings, and reports to the full Board of Directors.

We actively evaluate interest rate risk in connection with our lending, investing and deposit activities. In an effort to better manage interest-rate risk, we have de-emphasized the origination of residential mortgage loans, and have increased our emphasis on the origination of nonresidential real estate loans, multi-family mortgage loans, commercial loans and commercial leases. In addition, depending on market interest rates and our capital and liquidity position, we generally sell all or a portion of our longer-term, fixed-rate residential loans, usually on a servicing-retained basis. Further, we primarily invest in shorter-duration securities, which generally have lower yields compared to longer-term investments. Shortening the average maturity of our interest-earning assets by increasing our investments in shorter-term loans and securities, as well as loans with variable rates of interest, helps to better match the maturities and interest rates of our assets and liabilities, thereby reducing the exposure of our net interest income to changes in market interest rates. Finally, we have classified all of our investment portfolio as available-for-sale so as to provide flexibility in liquidity management.

We utilize a combination of analyses to monitor the Bank’s exposure to changes in interest rates. The economic value of equity analysis is a model that estimates the change in net portfolio value (“NPV”) over a range of interest rate scenarios. NPV is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts. In calculating changes in NPV, we assume estimated loan prepayment rates, reinvestment rates and deposit decay rates that seem most likely based on historical experience during prior interest rate changes.

Our net interest income analysis utilizes the data derived from the dynamic GAP analysis, described below, and applies several additional elements, including actual interest rate indices and margins, contractual limitations such as interest rate floors and caps and the U.S. Treasury yield curve as of the balance sheet date. In addition, we apply consistent parallel yield curve shifts (in both directions) to determine possible changes in net interest income if the theoretical yield curve shifts occurred instantaneously. Net interest income analysis also adjusts the dynamic GAP repricing analysis based on changes in prepayment rates resulting from the parallel yield curve shifts.

Our dynamic GAP analysis determines the relative balance between the repricing of assets and liabilities over multiple periods of time (ranging from overnight to five years). Dynamic GAP analysis includes expected cash flows from loans and mortgage-backed securities, applying prepayment rates based on the differential between the current interest rate and the market interest rate for each loan and security type. This analysis identifies mismatches in the timing of asset and liability repricing but does not necessarily provide an accurate indicator of interest rate risk because it omits the factors incorporated into the net interest income analysis.

Quantitative Analysis. The following table sets forth, as of March 31, 2013, the estimated changes in the Bank’s NPV and net interest income that would result from the designated instantaneous parallel shift in the U.S. Treasury yield curve. Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions including relative levels of market interest rates, loan prepayments and deposit decay, and should not be relied upon as indicative of actual results.

	Estimated Increase in NPV				Decrease in Estimated Net Interest Income
Change in Interest Rates (basis points)	Amount		Percent		Amount			Percent
	(dollars in thousands)
+400	$	1,665	1.14	%	$	(712	)	(1.62	)%
+300	1,663		1.14		(405		)	(0.92	)
+200	1,535		1.05		(252		)	(0.57	)
+100	1,086		0.74		(146		)	(0.33	)
0	—		—		—			—

The Company has opted not to include an estimate for a decrease in rates at March 31, 2013 as the results are not relevant given the current targeted fed funds rate of the Federal Open Market Committee. The table set forth above indicates that at March 31, 2013, in the event of an immediate 200 basis point increase in interest rates, the Bank would be expected to experience a 1.05% increase in NPV and a $252,000 decrease in net interest income. This data does not reflect any actions that we may undertake in

44

response to changes in interest rates, such as changes in rates paid on certain deposit accounts based on local competitive factors, which could reduce the actual impact on NPV and net interest income, if any.

Certain shortcomings are inherent in the methodology used in the above interest rate risk measurements. Modeling changes in NPV and net interest income requires that we make certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. The NPV and net interest income table presented above assumes that the composition of our interest-rate-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and, accordingly, the data does not reflect any actions that we may undertake in response to changes in interest rates, such as changes in rates paid on certain deposit accounts based on local competitive factors. The table also assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or the repricing characteristics of specific assets and liabilities. Accordingly, although the NPV and net interest income table provides an indication of our sensitivity to interest rate changes at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our net interest income and will differ from actual results.

ITEM 4. CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chairman, Chief Executive Officer and President and the Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of March 31, 2013. Based on that evaluation, the Company’s management, including the Chairman, President, and Chief Executive Officer and the Executive Vice President and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective.

During the quarter ended March 31, 2013, there have been no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

45

PART II

ITEM 1. LEGAL PROCEEDINGS

The Company and its subsidiaries are subject to various legal actions arising in the normal course of business. In the opinion of management, based on currently available information, the resolution of these legal actions is not expected to have a material adverse effect on the Company’s results of operations.

ITEM 1A. RISK FACTORS

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Unregistered Sale of Equity Securities. Not applicable.

(b) Use of Proceeds. Not applicable

(c) Repurchases of Equity Securities.

The Company’s Board of Directors had authorized the repurchase of up to 5,047,423 shares of our common stock. The repurchase authorization expired on November 15, 2012. In accordance with this authorization, the Company had repurchased 4,239,134 shares of its common stock as of March 31, 2013. The Company has no plans to engage in stock repurchases at this time.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

ITEM 4. MINE SAFETY DISCLOSURES

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

Exhibit Number	Description
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101	The following financial statements from the BankFinancial Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, formatted in Extensive Business Reporting Language (XBRL): (i) consolidated statement of conditions, (ii) consolidated statements of operations, (iii) consolidated statements of cash flows and (iv) the notes to consolidated financial statements.

• A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

46

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BANKFINANCIAL CORPORATION

Date:    May 8, 2013     By:    /s/ F. Morgan Gasior    

F. Morgan Gasior

Chairman of the Board, Chief Executive Officer and President

/s/ Paul A. Cloutier    

Paul A. Cloutier

Chief Financial Officer

47

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, F. Morgan Gasior, certify that:

1) I have reviewed this report on Form 10-Q of BankFinancial Corporation;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 8, 2013	/s/ F. Morgan Gasior
		F. Morgan Gasior
		Chairman of the Board, Chief Executive Officer and President

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Paul A. Cloutier, certify that:

1) I have reviewed this report on Form 10-Q of BankFinancial Corporation;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 8, 2013	/s/ Paul A. Cloutier
		Paul A. Cloutier
		Executive Vice President and Chief Financial Officer

EX-32

Exhibit 32

Certification of Chief Executive Officer and Chief Financial Officer

Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002

F. Morgan Gasior, Chairman of the Board, Chief Executive Officer and President of BankFinancial Corporation, a Maryland corporation (the “Company”) and Paul A. Cloutier, Executive Vice President and Chief Financial Officer of the Company, each certify in his capacity as an officer of the Company that he has reviewed the Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 (the “Report”) and that to the best of his knowledge:

1. the Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 8, 2013	/s/ F. Morgan Gasior
		F. Morgan Gasior
		Chairman of the Board, Chief Executive Officer and President

Date:	May 8, 2013	/s/ Paul A. Cloutier
		Paul A. Cloutier Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Loans Receivable - Narrative (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Valuation and Qualifying Accounts Disclosure [Line Items]
Allowance For Loan Losses For Purchased Impaired Loans	$ 9,000	$ 337,000
Cash flows expected to be collected at acquisition, subject to adjustment with final purchase price adjustment	18,800,000
Fair value of purchased impaired loans at acquisition	15,400,000
Reserve For Uncollected Loan Interest	1,159,000		900,000
Financing receivable modifications	5,589,000		11,167,000
Outstanding Commitments To Borrowers Loans Classified As Troubled Debt Restructurings	0
Troubled Debt Restructurings Value Of Decreased Interest Income		0
Financing Receivable, Modifications, Increase In Allowance For Loan And Leases Losses	0	183,000
Increased value of allowances for loan losses	0	0
Charges regarding TDRs	0	500,000
Loans modified	300,000	1,700,000
Allowance for Loan and Lease Losses [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Valuation of reserves allocation	$ 287,000		$ 318,000

XML

Loans Receivable - Past Due Loans (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013		Dec. 31, 2012
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded Investment, 30 to 59 Days Past Due	$ 6,786	[1]	$ 11,633	[2]
Recorded Investment, 60 to 89 Days Past Due	1,712	[1]	6,105	[2]
Recorded Investment, 90 Days or Greater Past Due	22,752		14,288
Recorded Investment, Total Past Due	31,250		32,026
Recorded investment, loans not past due	982,551		1,005,827
Recorded investment, total	1,013,801		1,037,853
One-to-four family residential real estate loans [Member]
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded Investment, 30 to 59 Days Past Due	510		1,584
Recorded Investment, 60 to 89 Days Past Due	305		778
Recorded Investment, 90 Days or Greater Past Due	4,123		4,463
Recorded Investment, Total Past Due	4,938		6,825
Recorded investment, loans not past due	147,736		153,279
Recorded investment, total	152,674		160,104
One-to-four family residential real estate loans - non-owner occupied loans [Member]
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded Investment, 30 to 59 Days Past Due	504		855
Recorded Investment, 60 to 89 Days Past Due	198		579
Recorded Investment, 90 Days or Greater Past Due	811		249
Recorded Investment, Total Past Due	1,513		1,683
Recorded investment, loans not past due	54,569		55,906
Recorded investment, total	56,082		57,589
Multi-family mortgage loans [Member]
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded Investment, 30 to 59 Days Past Due	2,145		5,393
Recorded Investment, 60 to 89 Days Past Due	1,208		3,049
Recorded Investment, 90 Days or Greater Past Due	9,762		3,218
Recorded Investment, Total Past Due	13,115		11,660
Recorded investment, loans not past due	276,979		291,103
Recorded investment, total	290,094		302,763
Wholesale commercial lending [Member]
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded Investment, 30 to 59 Days Past Due	0		1,481
Recorded Investment, 60 to 89 Days Past Due	0		0
Recorded Investment, 90 Days or Greater Past Due	0		0
Recorded Investment, Total Past Due	0		1,481
Recorded investment, loans not past due	46,592		44,342
Recorded investment, total	46,592		45,823
Nonresidential real estate loans [Member]
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded Investment, 30 to 59 Days Past Due	3,159		863
Recorded Investment, 60 to 89 Days Past Due	0		398
Recorded Investment, 90 Days or Greater Past Due	5,788		5,508
Recorded Investment, Total Past Due	8,947		6,769
Recorded investment, loans not past due	247,603		252,368
Recorded investment, total	256,550		259,137
Construction loans [Member]
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded investment, loans not past due	47
Recorded investment, total	47
Land loans [Member]
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded Investment, 30 to 59 Days Past Due	0		702
Recorded Investment, 60 to 89 Days Past Due	0		1,220
Recorded Investment, 90 Days or Greater Past Due	1,375		630
Recorded Investment, Total Past Due	1,375		2,552
Recorded investment, loans not past due	4,454		4,956
Recorded investment, total	5,829		7,508
Commercial loans - Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded Investment, 30 to 59 Days Past Due	142		659
Recorded Investment, 60 to 89 Days Past Due	0		3
Recorded Investment, 90 Days or Greater Past Due	830		204
Recorded Investment, Total Past Due	972		866
Recorded investment, loans not past due	18,168		22,336
Recorded investment, total	19,140		23,202
Commercial loans - Unsecured [Member]
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded Investment, 30 to 59 Days Past Due	21		81
Recorded Investment, 60 to 89 Days Past Due	0		78
Recorded Investment, 90 Days or Greater Past Due	52		16
Recorded Investment, Total Past Due	73		175
Recorded investment, loans not past due	5,549		5,774
Recorded investment, total	5,622		5,949
Commercial Loans - Municipal loans [Member]
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded Investment, 30 to 59 Days Past Due	0		0
Recorded Investment, 60 to 89 Days Past Due	0		0
Recorded Investment, 90 Days or Greater Past Due	0		0
Recorded Investment, Total Past Due	0		0
Recorded investment, loans not past due	4,784		4,752
Recorded investment, total	4,784		4,752
Commercial Loans - Warehouse Lines [Member]
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded Investment, 30 to 59 Days Past Due	0		0
Recorded Investment, 60 to 89 Days Past Due	0		0
Recorded Investment, 90 Days or Greater Past Due	0		0
Recorded Investment, Total Past Due	0		0
Recorded investment, loans not past due	1,827		2,989
Recorded investment, total	1,827		2,989
Commercial Loans - Health Care [Member]
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded Investment, 30 to 59 Days Past Due	0		0
Recorded Investment, 60 to 89 Days Past Due	0		0
Recorded Investment, 90 Days or Greater Past Due	0		0
Recorded Investment, Total Past Due	0		0
Recorded investment, loans not past due	17,257		17,601
Recorded investment, total	17,257		17,601
Commercial loans - Other [Member]
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded Investment, 30 to 59 Days Past Due	0		0
Recorded Investment, 60 to 89 Days Past Due	0		0
Recorded Investment, 90 Days or Greater Past Due	0		0
Recorded Investment, Total Past Due	0		0
Recorded investment, loans not past due	6,861		6,977
Recorded investment, total	6,861		6,977
Commercial Leases - Investment rated commercial leases [Member]
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded Investment, 30 to 59 Days Past Due	303		0
Recorded Investment, 60 to 89 Days Past Due	0		0
Recorded Investment, 90 Days or Greater Past Due	0		0
Recorded Investment, Total Past Due	303		0
Recorded investment, loans not past due	107,786		102,724
Recorded investment, total	108,089		102,724
Commercial Leases - Below Investment Grade [Member]
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded Investment, 30 to 59 Days Past Due	0		0
Recorded Investment, 60 to 89 Days Past Due	0		0
Recorded Investment, 90 Days or Greater Past Due	0		0
Recorded Investment, Total Past Due	0		0
Recorded investment, loans not past due	9,644		9,294
Recorded investment, total	9,644		9,294
Commercial Leases - Non Rated [Member]
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded Investment, 30 to 59 Days Past Due	0		0
Recorded Investment, 60 to 89 Days Past Due	0		0
Recorded Investment, 90 Days or Greater Past Due	0		0
Recorded Investment, Total Past Due	0		0
Recorded investment, loans not past due	25,691		25,657
Recorded investment, total	25,691		25,657
Commercial Leases - Lease Pools [Member]
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded Investment, 30 to 59 Days Past Due	0		0
Recorded Investment, 60 to 89 Days Past Due	0		0
Recorded Investment, 90 Days or Greater Past Due	0		0
Recorded Investment, Total Past Due	0		0
Recorded investment, loans not past due	4,594		3,028
Recorded investment, total	4,594		3,028
Consumer loans [Member]
Financing Receivable, Recorded Investment, Past Due [Abstract]
Recorded Investment, 30 to 59 Days Past Due	2		15
Recorded Investment, 60 to 89 Days Past Due	1		0
Recorded Investment, 90 Days or Greater Past Due	11		0
Recorded Investment, Total Past Due	14		15
Recorded investment, loans not past due	2,410		2,741
Recorded investment, total	$ 2,424		$ 2,756

[1]

[2] 30-59 DaysPast Due 60-89 DaysPast Due 90 Days orGreaterPast Due Total PastDue Loans NotPast Due TotalPurchased impaired loans One-to-four family residential real estate loans - non-owner occupied$327 $— $53 $380$— $380Nonresidential real estate loans— — 1,125 1,1251,443 2,568Land loans— — 1,021 1,021— 1,021Commercial loans – secured— — 20 20— 20 $327 $— $2,219 $2,546 $1,443 $3,989

XML

Loans Receivable - Loan Origination and Risk Management (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, amount	$ 1,021,126	$ 1,047,755
Multi-family mortgage loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, amount	338,502	352,019
Commercial leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and leases, amount	$ 147,168	$ 139,783

XML

Fair Value - Level 3 Fair Value Measurements for Financial Instruments on a Non-recurring Basis (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Statement [Line Items]
Fair Value, Impaired loans	9,099
Fair Value, Other real estate owned	8,088
One to Four Family Residential Real Estate Loans [Member]
Statement [Line Items]
Fair Value, Impaired loans	186
Fair Value, Other real estate owned	1,720
One to Four Family Residential Real Estate Loans [Member] | Sales comparison [Member]
Statement [Line Items]
Valuation Technique(s)	Sales comparison
Unobservable Input(s)	Discount applied to valuation
One to Four Family Residential Real Estate Loans [Member] | Sales comparison [Member] | Maximum [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Discount Rate	90.00%
One to Four Family Residential Real Estate Loans [Member] | Sales comparison [Member] | Maximum [Member] | Other Real Estate Owned [Member]
Statement [Line Items]
Fair Value Inputs, Discount Rate	77.00%
One to Four Family Residential Real Estate Loans [Member] | Sales comparison [Member] | Minimum [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Discount Rate	6.00%
One to Four Family Residential Real Estate Loans [Member] | Sales comparison [Member] | Minimum [Member] | Other Real Estate Owned [Member]
Statement [Line Items]
Fair Value Inputs, Discount Rate	7.00%
One to Four Family Residential Real Estate Loans [Member] | Sales comparison [Member] | Weighted Average [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Discount Rate	67.00%
One to Four Family Residential Real Estate Loans [Member] | Sales comparison [Member] | Weighted Average [Member] | Other Real Estate Owned [Member]
Statement [Line Items]
Fair Value Inputs, Discount Rate	18.00%
Multi-family mortgage loans [Member]
Statement [Line Items]
Fair Value, Impaired loans	2,999
Multi-family mortgage loans [Member] | Sales comparison [Member]
Statement [Line Items]
Valuation Technique(s)	Sales comparison
Unobservable Input(s)	Comparison between sales and income approaches
Multi-family mortgage loans [Member] | Sales comparison [Member] | Maximum [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Comparability Adjustments	95.00%
Multi-family mortgage loans [Member] | Sales comparison [Member] | Maximum [Member] | Other Real Estate Owned [Member]
Statement [Line Items]
Fair Value Inputs, Comparability Adjustments	9.00%
Multi-family mortgage loans [Member] | Sales comparison [Member] | Minimum [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Comparability Adjustments	2.00%
Multi-family mortgage loans [Member] | Sales comparison [Member] | Minimum [Member] | Other Real Estate Owned [Member]
Statement [Line Items]
Fair Value Inputs, Comparability Adjustments	0.00%
Multi-family mortgage loans [Member] | Sales comparison [Member] | Weighted Average [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Comparability Adjustments	47.00%
Multi-family mortgage loans [Member] | Sales comparison [Member] | Weighted Average [Member] | Other Real Estate Owned [Member]
Statement [Line Items]
Fair Value Inputs, Comparability Adjustments	9.00%
Multi-family mortgage loans [Member] | Income approach [Member]
Statement [Line Items]
Valuation Technique(s)	Income approach
Unobservable Input(s)	Cap Rate
Multi-family mortgage loans [Member] | Income approach [Member] | Maximum [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Cap Rate	11.80%
Multi-family mortgage loans [Member] | Income approach [Member] | Minimum [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Cap Rate	6.20%
Multi-family mortgage loans [Member] | Income approach [Member] | Weighted Average [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Cap Rate	7.65%
Nonresidential real estate loans [Member]
Statement [Line Items]
Fair Value, Impaired loans	3,014
Fair Value, Other real estate owned	3,268
Nonresidential real estate loans [Member] | Sales comparison [Member]
Statement [Line Items]
Valuation Technique(s)	Sales comparison
Unobservable Input(s)	Comparison between sales and income approaches
Nonresidential real estate loans [Member] | Sales comparison [Member] | Maximum [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Comparability Adjustments	99.00%
Nonresidential real estate loans [Member] | Sales comparison [Member] | Maximum [Member] | Other Real Estate Owned [Member]
Statement [Line Items]
Fair Value Inputs, Comparability Adjustments	30.00%
Nonresidential real estate loans [Member] | Sales comparison [Member] | Minimum [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Comparability Adjustments	6.00%
Nonresidential real estate loans [Member] | Sales comparison [Member] | Minimum [Member] | Other Real Estate Owned [Member]
Statement [Line Items]
Fair Value Inputs, Comparability Adjustments	7.00%
Nonresidential real estate loans [Member] | Sales comparison [Member] | Weighted Average [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Comparability Adjustments	63.00%
Nonresidential real estate loans [Member] | Sales comparison [Member] | Weighted Average [Member] | Other Real Estate Owned [Member]
Statement [Line Items]
Fair Value Inputs, Comparability Adjustments	24.00%
Nonresidential real estate loans [Member] | Income approach [Member]
Statement [Line Items]
Valuation Technique(s)	Income approach
Unobservable Input(s)	Cap Rate
Nonresidential real estate loans [Member] | Income approach [Member] | Maximum [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Cap Rate	10.30%
Nonresidential real estate loans [Member] | Income approach [Member] | Minimum [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Cap Rate	8.50%
Nonresidential real estate loans [Member] | Income approach [Member] | Weighted Average [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Cap Rate	8.93%
Construction and land loans [Member]
Statement [Line Items]
Fair Value, Impaired loans	2,150
Construction and land loans [Member] | Sales comparison [Member]
Statement [Line Items]
Valuation Technique(s)	Sales comparison
Unobservable Input(s)	Discount applied to valuation
Construction and land loans [Member] | Sales comparison [Member] | Maximum [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Discount Rate	29.00%
Construction and land loans [Member] | Sales comparison [Member] | Minimum [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Discount Rate	10.00%
Construction and land loans [Member] | Sales comparison [Member] | Weighted Average [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Discount Rate	28.00%
Commercial loans [Member]
Statement [Line Items]
Fair Value, Impaired loans	750
Commercial loans [Member] | Sales comparison [Member]
Statement [Line Items]
Valuation Technique(s)	Sales comparison
Unobservable Input(s)	Discount applied to valuation
Commercial loans [Member] | Sales comparison [Member] | Maximum [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Discount Rate	11.00%
Commercial loans [Member] | Sales comparison [Member] | Minimum [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Discount Rate	0.00%
Commercial loans [Member] | Sales comparison [Member] | Weighted Average [Member] | Impaired Loans [Member]
Statement [Line Items]
Fair Value Inputs, Discount Rate	58.00%
Land [Member]
Statement [Line Items]
Fair Value, Other real estate owned	3,100
Land [Member] | Sales comparison [Member]
Statement [Line Items]
Valuation Technique(s)	Sales comparison
Unobservable Input(s)	Discount applied to valuation
Land [Member] | Sales comparison [Member] | Maximum [Member] | Other Real Estate Owned [Member]
Statement [Line Items]
Fair Value Inputs, Discount Rate	21.00%
Land [Member] | Sales comparison [Member] | Minimum [Member] | Other Real Estate Owned [Member]
Statement [Line Items]
Fair Value Inputs, Discount Rate	7.00%
Land [Member] | Sales comparison [Member] | Weighted Average [Member] | Other Real Estate Owned [Member]
Statement [Line Items]
Fair Value Inputs, Discount Rate	10.00%
Mortgage servicing rights [Member]
Statement [Line Items]
Fair Value, Other real estate owned	211
Mortgage servicing rights [Member] | Third party valuation [Member]
Statement [Line Items]
Valuation Technique(s)	Third party valuation
Unobservable Input(s)	Present value of future servicing income based on prepayment speeds
Present value of future servicing income based on default rates	Present value of future servicing income based on default rates
Mortgage servicing rights [Member] | Third party valuation [Member] | Maximum [Member]
Statement [Line Items]
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value, Prepayment Speed	25.70%
Mortgage servicing rights [Member] | Third party valuation [Member] | Minimum [Member]
Statement [Line Items]
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value, Prepayment Speed	12.30%
Mortgage servicing rights [Member] | Third party valuation [Member] | Weighted Average [Member]
Statement [Line Items]
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value, Prepayment Speed	17.16%
Fair Value Inputs, Probability of Default	12.00%

XML

Loans Receivable - Troubled Debt Restructuring - Payment Defaults (Details) (USD $)	3 Months Ended
	Mar. 31, 2013 loan	Mar. 31, 2012 loan
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Subsequent Default, Increase In Allowance For Loan And Leases Losses	$ 0	$ 0
Loans by class modified as TDRs with payment default
Number of loans	0	2
Recorded investment	0	978,000
One-to-four family residential real estate loans [Member]
Loans by class modified as TDRs with payment default
Number of loans	0	1
Recorded investment	0	278,000
Nonresidential real estate loans [Member]
Loans by class modified as TDRs with payment default
Number of loans	0	1
Recorded investment	$ 0	$ 700,000

XML

Summary of Significant Accounting Policies (Notes)

3 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Significant Accounting Policies

Basis of Presentation: BankFinancial Corporation, a Maryland corporation headquartered in Burr Ridge, Illinois (the “Company”), is the owner of all of the issued and outstanding capital stock of BankFinancial, F.S.B. (the “Bank”).

Principles of Consolidation: The interim unaudited consolidated financial statements include the accounts of and transactions of BankFinancial Corporation, the Bank, and the Bank’s wholly-owned subsidiaries, Financial Assurance Services, Inc. and BF Asset Recovery Corporation (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. All significant intercompany accounts and transactions have been eliminated. The results of operations for the three months ended March 31, 2013, are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2013.

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

Use of Estimates: To prepare financial statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ. The allowance for loan losses, mortgage servicing rights, deferred tax assets, goodwill, other intangible assets, stock-based compensation, impairment of securities and fair value of financial instruments are particularly subject to change and the effect of such change could be material to the financial statements.

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, 2012, as filed with the Securities and Exchange Commission.

Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board issued an amendment to improve the reporting of reclassifications out of accumulated other comprehensive income. ASC Topic 220, “Comprehensive Income” amended prior guidance to improve the reporting of reclassifications out of accumulated other comprehensive income by requiring an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income if the amount reclassified is required under GAAP. The Company adopted this new authoritative guidance on January 1, 2013, and it did not have an impact on the Company's statements of operations and financial condition as the Company did not have any amounts reclassified during the periods ended March 31, 2013 and 2012.

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Fair Value - Carrying Amount and Estimated Fair Value of Finanical Instruments (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Dec. 31, 2011
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Cash and Cash Equivalents, at Carrying Value	$ 311,128	$ 275,764	$ 178,080	$ 120,704
Financial assets
Securities, carrying amount	61,273		77,832
Loans held-for-sale, carrying amount	55	2,166
Loans receivable, net of allowance for loan losses, carrying amounts	1,004,404	1,030,465
FHLBC stock, carrying amount	7,566	8,412
Accrued interest receivable, carrying amount	3,951	4,146
Estimate of Fair Value, Fair Value Disclosure [Member]
Financial assets
Available-for-sale Securities, Fair Value Disclosure	61,273	77,832
Loans Held-for-sale, Fair Value Disclosure	55	2,166
Loans Receivable, Fair Value Disclosure	973,172	1,008,051
Accounts Receivable, Fair Value Disclosure	3,951	38,251
Financial liabilities
Cash and Cash Equivalents, Fair Value Disclosure	311,128	275,764
Demand Deposit Accounts Fair Value Disclosure	(131,856)	134,597
Deposits Savings Deposits Fair Value Disclosure	(148,184)	144,726
Now Money Market Accounts Fair Value Disclosure	(693,650)	697,775
Certificates Of Deposit Fair Value Disclosure	(299,298)	306,859
Short Term Borrowings Fair Value Disclosure	(2,777)	5,608
Accrued Liabilities, Fair Value Disclosure	(137)	157
Estimate of Fair Value, Fair Value Disclosure [Member] | Level 1 [Member]
Financial assets
Loans Held-for-sale, Fair Value Disclosure		0
Loans Receivable, Fair Value Disclosure		0
Accounts Receivable, Fair Value Disclosure		0
Financial liabilities
Cash and Cash Equivalents, Fair Value Disclosure	17,742	20,361
Demand Deposit Accounts Fair Value Disclosure		0
Deposits Savings Deposits Fair Value Disclosure		0
Now Money Market Accounts Fair Value Disclosure		0
Certificates Of Deposit Fair Value Disclosure		0
Short Term Borrowings Fair Value Disclosure		0
Accrued Liabilities, Fair Value Disclosure		0
Estimate of Fair Value, Fair Value Disclosure [Member] | Level 2 [Member]
Financial assets
Available-for-sale Securities, Fair Value Disclosure	60,749	77,304
Loans Held-for-sale, Fair Value Disclosure	55	2,166
Loans Receivable, Fair Value Disclosure	964,073	999,578
Accounts Receivable, Fair Value Disclosure	3,951	38,251
Financial liabilities
Cash and Cash Equivalents, Fair Value Disclosure	293,386	255,403
Demand Deposit Accounts Fair Value Disclosure	(131,856)	(134,597)
Deposits Savings Deposits Fair Value Disclosure	(148,184)	(144,726)
Now Money Market Accounts Fair Value Disclosure	(693,650)	(697,775)
Certificates Of Deposit Fair Value Disclosure	(299,298)	(306,859)
Short Term Borrowings Fair Value Disclosure	(2,777)	(5,608)
Accrued Liabilities, Fair Value Disclosure	(137)	(157)
Estimate of Fair Value, Fair Value Disclosure [Member] | Level 3 [Member]
Financial assets
Loans Receivable, Fair Value Disclosure	9,099	8,473
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Cash and Cash Equivalents, at Carrying Value	311,128	275,764
Financial assets
Securities, carrying amount	61,273	77,832
Loans held-for-sale, carrying amount	55	2,166
Loans receivable, net of allowance for loan losses, carrying amounts	1,004,404	1,030,465
FHLBC stock, carrying amount	7,566	8,412
Accrued interest receivable, carrying amount	3,951	38,251
Financial liabilities
Demand Deposit Accounts	131,856	(134,597)
Deposits, Savings Deposits	148,184	(144,726)
Now Money Market Accounts	693,650	(697,775)
Certificates of Deposit, at Carrying Value	297,860	(305,253)
Short-term Debt	2,740	(5,567)
Accrued Interest Payable	137	(157)
Equity Funds [Member]
Financial assets
Securities, carrying amount	524
Equity Funds [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | Level 1 [Member]
Financial assets
Securities, carrying amount		$ 528

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Loans Receivable - Carrying Amount (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Carrying amount of purchased impaired loans
Purchased impaired loans	$ 3,984	$ 3,989
Carrying amount, net of allowance ($101 at March 31, 2013, $110 at December 31, 2012)	3,883	3,879
One-to-four family residential real estate loans [Member]
Carrying amount of purchased impaired loans
Purchased impaired loans	388	380
Multi-family mortgage loans [Member]
Carrying amount of purchased impaired loans
Purchased impaired loans	0	0
Nonresidential real estate loans [Member]
Carrying amount of purchased impaired loans
Purchased impaired loans	2,554	2,568
Land loans [Member]
Carrying amount of purchased impaired loans
Purchased impaired loans	1,021	1,021
Commercial loans [Member]
Carrying amount of purchased impaired loans
Purchased impaired loans	$ 21	$ 20

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Loans Receivable - Loans Individually Evaluated for Impairment (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Loans individually evaluated for impairment by class loans
Loan Balance	$ 18,237	$ 21,155
Recorded Investment	15,905	16,128
Partial Charge-off	1,623	4,847
Average Investment in Impaired Loans	13,428	23,251
Interest Income Recognized	36	799
Loan Balance (With an allowance recorded)	10,723	10,831
Recorded Investment (With an allowance recorded)	8,493	8,107
Partial Charge-offs (With an allowance recorded)	2,128	2,699
Allowance for loan losses (With an allowance recorded)	1,430	1,584
Average Investment in Impaired Loans (With an allowance recorded)	8,137	37,222
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method	19	166
Impaired Loan, Total	28,960	31,986
Recorded Investment, Total	24,398	24,235
Partial Charge-offs, Total	3,751	7,546
Average Investment in Impaired Loans, Total	21,565	60,473
Interest Income Recognized, Total	55	965
One-to-four family residential real estate loans [Member]
Loans individually evaluated for impairment by class loans
Loan Balance	5,142	5,250
Recorded Investment	4,047	4,216
Partial Charge-off	1,051	1,027
Average Investment in Impaired Loans	2,983	2,814
Interest Income Recognized	15	149
Allowance for loan losses (With an allowance recorded)	116	137
One-to-four family residential real estate loans - non-owner occupied loans [Member]
Loans individually evaluated for impairment by class loans
Loan Balance	810	567
Recorded Investment	649	534
Partial Charge-off	139	34
Average Investment in Impaired Loans	1,379	4,322
Interest Income Recognized	7	90
Loan Balance (With an allowance recorded)	134	626
Recorded Investment (With an allowance recorded)	100	499
Partial Charge-offs (With an allowance recorded)	34	128
Allowance for loan losses (With an allowance recorded)	98	137
Average Investment in Impaired Loans (With an allowance recorded)	373	1,996
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method	0	13
Multi-family mortgage loans [Member]
Loans individually evaluated for impairment by class loans
Loan Balance	7,651	2,959
Recorded Investment	7,379	2,106
Partial Charge-off	4	819
Average Investment in Impaired Loans	3,417	9,303
Interest Income Recognized	12	189
Loan Balance (With an allowance recorded)	3,609	3,182
Recorded Investment (With an allowance recorded)	3,099	2,645
Partial Charge-offs (With an allowance recorded)	477	521
Allowance for loan losses (With an allowance recorded)	747	729
Average Investment in Impaired Loans (With an allowance recorded)	2,758	6,562
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method	9	20
Multi Family Mortgage Loans without wholesale [Member] [Member]
Loans individually evaluated for impairment by class loans
Allowance for loan losses (With an allowance recorded)	685
Wholesale commercial lending [Member]
Loans individually evaluated for impairment by class loans
Loan Balance (With an allowance recorded)	656	0
Recorded Investment (With an allowance recorded)	647	0
Partial Charge-offs (With an allowance recorded)		0
Allowance for loan losses (With an allowance recorded)	62	0
Average Investment in Impaired Loans (With an allowance recorded)	162	0
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method	7	0
Nonresidential real estate loans [Member]
Loans individually evaluated for impairment by class loans
Loan Balance	4,088	11,850
Recorded Investment	3,467	9,220
Partial Charge-off	251	2,490
Average Investment in Impaired Loans	5,519	6,218
Interest Income Recognized	2	347
Loan Balance (With an allowance recorded)	2,628	2,825
Recorded Investment (With an allowance recorded)	2,404	2,549
Partial Charge-offs (With an allowance recorded)	181	266
Allowance for loan losses (With an allowance recorded)	351	401
Average Investment in Impaired Loans (With an allowance recorded)	2,511	21,077
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method	3	20
Land loans [Member]
Loans individually evaluated for impairment by class loans
Loan Balance	421	0
Recorded Investment	310	0
Partial Charge-off	108	0
Average Investment in Impaired Loans	78	409
Interest Income Recognized	0	0
Loan Balance (With an allowance recorded)	2,500	3,812
Recorded Investment (With an allowance recorded)	1,264	2,210
Partial Charge-offs (With an allowance recorded)	1,232	1,602
Allowance for loan losses (With an allowance recorded)	135	294
Average Investment in Impaired Loans (With an allowance recorded)	1,972	2,933
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method	0	113
Commercial loans - secured [Member]
Loans individually evaluated for impairment by class loans
Loan Balance	0	0
Recorded Investment	0	0
Partial Charge-off	0	0
Average Investment in Impaired Loans	52	137
Interest Income Recognized	0	0
Loan Balance (With an allowance recorded)	1,034	386
Recorded Investment (With an allowance recorded)	830	204
Partial Charge-offs (With an allowance recorded)	201	182
Allowance for loan losses (With an allowance recorded)	81	23
Average Investment in Impaired Loans (With an allowance recorded)	361	1,849
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method	0	0
Commercial loans - unsecured [Member]
Loans individually evaluated for impairment by class loans
Loan Balance	125
Recorded Investment	53
Partial Charge-off	70
Average Investment in Impaired Loans	0
Interest Income Recognized	0
Loan Balance (With an allowance recorded)		0
Recorded Investment (With an allowance recorded)		0
Partial Charge-offs (With an allowance recorded)		0
Allowance for loan losses (With an allowance recorded)		0
Average Investment in Impaired Loans (With an allowance recorded)		267
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method		0
Commercial loans - other [Member]
Loans individually evaluated for impairment by class loans
Loan Balance		529
Recorded Investment		52
Partial Charge-off		477
Average Investment in Impaired Loans		25
Interest Income Recognized		21
One to Four Family Residential Real Estate Loans-Owner occupied [Member] [Member]
Loans individually evaluated for impairment by class loans
Loan Balance (With an allowance recorded)	162	0
Recorded Investment (With an allowance recorded)	149	0
Partial Charge-offs (With an allowance recorded)	3	0
Allowance for loan losses (With an allowance recorded)	18	0
Average Investment in Impaired Loans (With an allowance recorded)	0	2,500
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method	0	0
Non-rated commercial leases [Member]
Loans individually evaluated for impairment by class loans
Loan Balance		0
Recorded Investment		0
Partial Charge-off		0
Average Investment in Impaired Loans		23
Interest Income Recognized		3
Loan Balance (With an allowance recorded)		0
Recorded Investment (With an allowance recorded)		0
Partial Charge-offs (With an allowance recorded)		0
Allowance for loan losses (With an allowance recorded)		0
Average Investment in Impaired Loans (With an allowance recorded)		36
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method		0
Consumer loans [Member]
Loans individually evaluated for impairment by class loans
Loan Balance (With an allowance recorded)		0
Recorded Investment (With an allowance recorded)		0
Partial Charge-offs (With an allowance recorded)		0
Allowance for loan losses (With an allowance recorded)	0	0
Average Investment in Impaired Loans (With an allowance recorded)		2
Impaired Financing Receivable, with Related Allowance, Interest Income, Cash Basis Method		$ 0

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Fair Value - Narratives (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Fair Value Disclosures [Abstract]
Mortgage Servicing Rights (MSR) Impairment (Recovery)	$ 26,000	$ (13,000)
Impaired loans, carrying amount	28,500,000		28,400,000
Impaired loans, valuation allowance	1,500,000		1,700,000
Provision for Loan and Lease Losses	200,000
Other real estate owned at carrying value	8,088,000		10,358,000
Real Estate Owned, Valuation Allowance, Provision	(1,300,000)		(1,200,000)
Other Real Estate Owned Write Downs	(89,000)
Mortgage servicing rights, carrying value	1,000,000		1,000,000
Mortgage servicing rights, fixed rate loans	757,000		756,000
Mortgage Servicing Rights Adjustable Rate Loans	$ 256,000		$ 264,000

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Loans Receivable - Accretable Yield (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Accretable yield, or income expected to be collected, related to purchased impaired loans
Beginning balance	$ 196	$ 2,270
New loans purchased	0	0
Disposals	0	127
Accretion of income	50	353
Ending balance	$ 146	$ 1,790

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Loans Receivable - Contractually Required Payments (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Purchased impaired loans at the date of acquisition
Contractually required payments receivable of loans purchased, Total	$ 6,836	$ 7,224
One-to-four family residential real estate loans [Member]
Purchased impaired loans at the date of acquisition
Contractually required payments receivable of loans purchased, Total	1,143	1,143
Nonresidential real estate loans [Member]
Purchased impaired loans at the date of acquisition
Contractually required payments receivable of loans purchased, Total	3,871	3,884
Land loans [Member]
Purchased impaired loans at the date of acquisition
Contractually required payments receivable of loans purchased, Total	1,600	1,600
Commercial loans [Member]
Purchased impaired loans at the date of acquisition
Contractually required payments receivable of loans purchased, Total	$ 222	$ 597

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Consolidated Statements of Cash Flow (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash flows from operating activities
Net income (loss)	$ 678	$ 2,337
Adjustments to reconcile to net loss to net cash from operating activities
Provision for loan losses	722	996
ESOP shares earned	195	162
Stock-based compensation expense	0	21
Depreciation and amortization	1,111	1,154
Amortization of premiums and discounts on securities and loans	(214)	(943)
Amortization Of Intangibles	156	163
Amortization and impairment of servicing assets	33	82
Net change in net deferred loan origination costs	14	60
Net loss on sale of other real estate owned	69	(139)
Net gain on sale of loans	(1,417)	(267)
Loans originated for sale	(3,357)	(6,127)
Proceeds from sale of loans	4,163	7,791
REO valuation adjustments	89	389
Net change in:
Accrued interest receivable	195	662
Earnings on bank owned life insurance	(70)	(126)
Other assets	1,163	603
Accrued interest payable and other liabilities	(1,263)	(2,553)
Net cash from operating activities	2,267	4,265
Securities
Proceeds from maturities	14,626	6,455
Proceeds from principal repayments	4,938	6,209
Purchases of securities	(3,175)	(1,153)
Loans receivable
Principal payments on loans receivable	130,457	156,725
Purchase of loans	0	0
Originated for investment	(105,573)	(108,142)
Proceeds from sale of loans	2,868	0
Proceeds of redemption of Federal Home Loan Bank of Chicago stock	846	5,010
Proceeds from sale of other real estate owned	2,667	2,984
Purchases of premises and equipment, net	(14)	(685)
Net cash from (used in) investing activities	47,640	67,403
Cash flows from financing activities
Net change in deposits	(10,801)	(11,914)
Net change in borrowings	(2,827)	(2,840)
Net change in advance payments by borrowers for taxes and insurance	(915)	673
Repurchase and retirement of common stock	0	0
Cash dividends paid on common stock	0	(211)
Net cash used in financing activities	(14,543)	(14,292)
Net change in cash and cash equivalents	35,364	57,376
Beginning cash and cash equivalents	275,764	120,704
Ending cash and cash equivalents	311,128	178,080
Supplemental disclosures of cash flow information:
Interest paid	1,014	1,263
Income taxes paid	0	0
Income taxes refunded	461	0
Loans transferred to other real estate owned	$ 555	$ 1,127

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Loans Receivable - Nonaccrual Loans (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment, Past Due [Line Items]
Reserve For Uncollected Loan Interest	$ 1,159	$ 900
Unpaid Principal Balance	30,398	30,956
Recorded investment in nonaccrual and loans past due over 90 days
Recorded Investment	25,461	22,267
Loans Past Due Over 90 Days, still accruing	243	329
One-to-four family residential real estate loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Unpaid Principal Balance	6,223	7,286
Recorded investment in nonaccrual and loans past due over 90 days
Recorded Investment	5,122	6,154
Loans Past Due Over 90 Days, still accruing	0	70
One-to-four family residential real estate loans - non-owner occupied loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Unpaid Principal Balance	1,106	1,420
Recorded investment in nonaccrual and loans past due over 90 days
Recorded Investment	866	1,145
Loans Past Due Over 90 Days, still accruing	0	0
Multi-family mortgage loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Unpaid Principal Balance	11,197	5,246
Recorded investment in nonaccrual and loans past due over 90 days
Recorded Investment	10,174	3,517
Loans Past Due Over 90 Days, still accruing	243	242
Wholesale Commercial Lending [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Unpaid Principal Balance	656
Recorded investment in nonaccrual and loans past due over 90 days
Recorded Investment	648
Nonresidential real estate loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Unpaid Principal Balance	7,125	12,249
Recorded investment in nonaccrual and loans past due over 90 days
Recorded Investment	6,182	8,985
Loans Past Due Over 90 Days, still accruing	0	0
Land loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Unpaid Principal Balance	2,921	3,817
Recorded investment in nonaccrual and loans past due over 90 days
Recorded Investment	1,575	2,210
Loans Past Due Over 90 Days, still accruing	0	0
Commercial loans - secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Unpaid Principal Balance	1,034	386
Recorded investment in nonaccrual and loans past due over 90 days
Recorded Investment	830	204
Loans Past Due Over 90 Days, still accruing	0	0
Commercial loans - unsecured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Unpaid Principal Balance	125	552
Recorded investment in nonaccrual and loans past due over 90 days
Recorded Investment	53	52
Loans Past Due Over 90 Days, still accruing	0	17
Consumer loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Unpaid Principal Balance	11
Recorded investment in nonaccrual and loans past due over 90 days
Recorded Investment	11
Loans Past Due Over 90 Days, still accruing	$ 0

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Fair Value - Financial Assets Accounted for at Fair Value (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013 Certificates of deposit [Member]	Dec. 31, 2012 Certificates of deposit [Member]	Mar. 31, 2013 SBA-guaranteed loan participation certificates [Member]	Dec. 31, 2012 SBA-guaranteed loan participation certificates [Member]	Mar. 31, 2013 Nonrecurring [Member]	Dec. 31, 2012 Nonrecurring [Member]	Mar. 31, 2013 Nonrecurring [Member] Certificates of deposit [Member]	Dec. 31, 2012 Nonrecurring [Member] Certificates of deposit [Member]	Mar. 31, 2013 Nonrecurring [Member] Municipal securities [Member]	Dec. 31, 2012 Nonrecurring [Member] Municipal securities [Member]	Mar. 31, 2013 Nonrecurring [Member] Equity mutual fund [Member]	Dec. 31, 2012 Nonrecurring [Member] Equity mutual fund [Member]	Mar. 31, 2013 Nonrecurring [Member] Mortgage-backed securities - residential [Member]	Dec. 31, 2012 Nonrecurring [Member] Mortgage-backed securities - residential [Member]	Mar. 31, 2013 Nonrecurring [Member] Collateralized mortgage obligations - residential [Member]	Dec. 31, 2012 Nonrecurring [Member] Collateralized mortgage obligations - residential [Member]	Mar. 31, 2013 Nonrecurring [Member] SBA-guaranteed loan participation certificates [Member]	Dec. 31, 2012 Nonrecurring [Member] SBA-guaranteed loan participation certificates [Member]	Mar. 31, 2013 Nonrecurring [Member] Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]	Dec. 31, 2012 Nonrecurring [Member] Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]	Mar. 31, 2013 Nonrecurring [Member] Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] Certificates of deposit [Member]	Dec. 31, 2012 Nonrecurring [Member] Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] Certificates of deposit [Member]	Mar. 31, 2013 Nonrecurring [Member] Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] Municipal securities [Member]	Dec. 31, 2012 Nonrecurring [Member] Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] Municipal securities [Member]	Mar. 31, 2013 Nonrecurring [Member] Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] Mortgage-backed securities - residential [Member]	Dec. 31, 2012 Nonrecurring [Member] Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] Mortgage-backed securities - residential [Member]	Mar. 31, 2013 Nonrecurring [Member] Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] Collateralized mortgage obligations - residential [Member]	Dec. 31, 2012 Nonrecurring [Member] Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] Collateralized mortgage obligations - residential [Member]	Mar. 31, 2013 Nonrecurring [Member] Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] SBA-guaranteed loan participation certificates [Member]	Dec. 31, 2012 Nonrecurring [Member] Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] SBA-guaranteed loan participation certificates [Member]	Mar. 31, 2013 Nonrecurring [Member] Significant Observable Inputs (Level 2) [Member]	Dec. 31, 2012 Nonrecurring [Member] Significant Observable Inputs (Level 2) [Member]	Mar. 31, 2013 Nonrecurring [Member] Significant Observable Inputs (Level 2) [Member] Equity mutual fund [Member]	Dec. 31, 2012 Nonrecurring [Member] Significant Observable Inputs (Level 2) [Member] Equity mutual fund [Member]	Mar. 31, 2013 Nonrecurring [Member] Significant Unobservable Inputs (Level 3) [Member]	Dec. 31, 2012 Nonrecurring [Member] Significant Unobservable Inputs (Level 3) [Member]	Mar. 31, 2013 Nonrecurring [Member] Significant Unobservable Inputs (Level 3) [Member] Certificates of deposit [Member]	Dec. 31, 2012 Nonrecurring [Member] Significant Unobservable Inputs (Level 3) [Member] Certificates of deposit [Member]	Mar. 31, 2013 Nonrecurring [Member] Significant Unobservable Inputs (Level 3) [Member] Municipal securities [Member]	Dec. 31, 2012 Nonrecurring [Member] Significant Unobservable Inputs (Level 3) [Member] Municipal securities [Member]	Mar. 31, 2013 Nonrecurring [Member] Significant Unobservable Inputs (Level 3) [Member] Equity mutual fund [Member]	Dec. 31, 2012 Nonrecurring [Member] Significant Unobservable Inputs (Level 3) [Member] Equity mutual fund [Member]	Mar. 31, 2013 Nonrecurring [Member] Significant Unobservable Inputs (Level 3) [Member] Mortgage-backed securities - residential [Member]	Dec. 31, 2012 Nonrecurring [Member] Significant Unobservable Inputs (Level 3) [Member] Mortgage-backed securities - residential [Member]	Mar. 31, 2013 Nonrecurring [Member] Significant Unobservable Inputs (Level 3) [Member] Collateralized mortgage obligations - residential [Member]	Dec. 31, 2012 Nonrecurring [Member] Significant Unobservable Inputs (Level 3) [Member] Collateralized mortgage obligations - residential [Member]	Mar. 31, 2013 Nonrecurring [Member] Significant Unobservable Inputs (Level 3) [Member] SBA-guaranteed loan participation certificates [Member]	Dec. 31, 2012 Nonrecurring [Member] Significant Unobservable Inputs (Level 3) [Member] SBA-guaranteed loan participation certificates [Member]
Schedule of Company's financial instruments measured at fair values
Total Fair value	$ 61,273	$ 77,832	$ 22,281	$ 33,456	$ 40	$ 42	$ 61,273	$ 77,832	$ 22,281	$ 33,456	$ 366	$ 369	$ 524	$ 528	$ 32,609	$ 34,233	$ 5,453	$ 9,204	$ 40	$ 42	$ 524	$ 528	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 60,749	$ 77,304	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0

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Consolidated Statements of Financial Condition (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Assets
Cash and due from other financial institutions	$ 17,742	$ 20,361
Interest-bearing deposits in other financial institutions	293,386	255,403
Cash and cash equivalents	311,128	275,764
Securities, at fair value	61,273	77,832
Loans held-for-sale	55	2,166
Loans receivable, net of allowance for loan losses: March 31, 2013, $17,453 and December 31, 2012, $18,035	1,004,404	1,030,465
Other Real Estate Owned At Carrying Value	8,088	10,358
Stock in Federal Home Loan Bank, at cost	7,566	8,412
Premises and equipment, net	37,530	38,251
Accrued interest receivable	3,951	4,146
Core deposit intangible	2,882	3,038
Bank owned life insurance	21,715	21,645
FDIC prepaid expense	2,188	2,658
Income tax receivable	0	461
Other assets	5,355	5,996
Total assets	1,466,135	1,481,192
Deposits
Noninterest-bearing	131,856	134,597
Interest-bearing	1,139,694	1,147,754
Total deposits	1,271,550	1,282,351
Borrowings	2,740	5,567
Advance payments by borrowers taxes and insurance	9,790	10,705
Accrued interest payable and other liabilities	8,416	9,679
Total liabilities	1,292,496	1,308,302
Commitments and contingent liabilities
Stockholders' equity:
Preferred Stock, $0.01 par value, 25,000,000 shares authorized, none issued or outstanding	0	0
Common Stock, $0.01 par value, 100,000,000 shares authorized; 21,072,966 shares issued at March 31, 2013 and December 31, 2012	211	211
Additional paid-in capital	193,544	193,590
Retained earnings (deficit)	(9,118)	(9,796)
Unearned Employee Stock Ownership Plan shares	(11,992)	(12,233)
Accumulated other comprehensive income	994	1,118
Total stockholders' equity	173,639	172,890
Total liabilities and stockholders' equity	$ 1,466,135	$ 1,481,192

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Consolidated Statements of Changes In Stockholders' Equity (USD $) In Thousands, unless otherwise specified	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Unearned Employee Stock Ownership Plan Shares	Accumulated Other Comprehensive Income (Loss)
Beginning Balance at Dec. 31, 2011	$ 199,857	$ 211	$ 193,801	$ 17,946	$ (13,212)	$ 1,111
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	2,337	0	0	2,337	0	0
Other comprehensive income, net of tax effects	(55)	0	0	0	0	(55)
Nonvested stock awards-stock-based compensation expense	21	0	21	0	0	0
Cash dividends declared on common stock (2010: $0.28, 2011: $0.22, 2012: $0.03, per share)	211	0	0	(211)	0	0
ESOP shares earned	162		(82)	0	244	0
Ending Balance at Mar. 31, 2012	202,111	211	193,740	20,072	(12,968)	1,056
Beginning Balance at Dec. 31, 2012	172,890	211	193,590	(9,796)	(12,233)	1,118
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	678	0	0	678	0	0
Other comprehensive income, net of tax effects	(124)	0	0	0	0	(124)
ESOP shares earned	195	0	(46)	0	241	0
Ending Balance at Mar. 31, 2013	$ 173,639	$ 211	$ 193,544	$ (9,118)	$ (11,992)	$ 994

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Loans Receivable - Troubled Debt Restructuring (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Troubled Debt Restructurings
Financing receivable modifications	$ 5,589	$ 11,167
Accrual Loans [Member]
Troubled Debt Restructurings
Financing receivable modifications	3,833	9,192
Non Accrual Loans [Member]
Troubled Debt Restructurings
Financing receivable modifications	1,756	1,975
One-to-four family residential real estate loans - non-owner occupied loans [Member] | Accrual Loans [Member]
Troubled Debt Restructurings
Financing receivable modifications	2,640	2,802
One-to-four family residential real estate loans - non-owner occupied loans [Member] | Non Accrual Loans [Member]
Troubled Debt Restructurings
Financing receivable modifications	820	767
Multi-family mortgage loans [Member] | Accrual Loans [Member]
Troubled Debt Restructurings
Financing receivable modifications	1,193	1,201
Multi-family mortgage loans [Member] | Non Accrual Loans [Member]
Troubled Debt Restructurings
Financing receivable modifications	936	938
Nonresidential real estate [Member] | Accrual Loans [Member]
Troubled Debt Restructurings
Financing receivable modifications	0	5,189
Nonresidential real estate [Member] | Non Accrual Loans [Member]
Troubled Debt Restructurings
Financing receivable modifications	$ 0	$ 270

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Securities - Amortized Cost and Fair Value (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012
Amortized cost and fair values of securities
Due in one year or less, amortized cost	$ 22,451
Due in one year or less, fair value	22,455
Due after one year through five years, amortized cost	180
Due after one year through five years, fair value	192
Amortized Cost	22,631
Fair value	22,647
Total amortized cost	59,595		76,031
Total Fair value	61,273		77,832
Equity mutual fund [Member]
Amortized cost and fair values of securities
Total amortized cost	500		500
Total Fair value	524
Mortgage - backed securities - residential [Member]
Amortized cost and fair values of securities
Total amortized cost	31,026		32,572
Total Fair value	32,609	34,233
Collateralized mortgage obligations - residential [Member]
Amortized cost and fair values of securities
Total amortized cost	5,398		9,111
Total Fair value	5,453	9,204
SBA-guaranteed loan participation certificates [Member]
Amortized cost and fair values of securities
Total amortized cost	40		42
Total Fair value	$ 40	$ 42

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Loans Receivable - Modified Troubled Debt Restructuring (Details) (USD $)	3 Months Ended
	Mar. 31, 2013 loan	Mar. 31, 2012 loan
Financing Receivable, Modifications [Line Items]
Loans modified	$ 300,000	$ 1,700,000
Loans by class modified as TDRs
Number of Loans	1	3
Pre-Modification outstanding recorded investment	384,000	1,092,000
Post-Modification outstanding recorded investment	384,000	895,000
Due to reduction in interest rate	0	372,000
Due to extension of maturity date	384,000	20,000
Due to permanent reduction in recorded investment	0	503,000
Total	384,000	895,000
One-to-four family residential real estate loans [Member]
Loans by class modified as TDRs
Number of Loans	1	2
Pre-Modification outstanding recorded investment	384,000	392,000
Post-Modification outstanding recorded investment	384,000	392,000
Due to reduction in interest rate	0	372,000
Due to extension of maturity date	384,000	20,000
Due to permanent reduction in recorded investment	0	0
Total	384,000	392,000
Multi-family mortgage loans [Member]
Loans by class modified as TDRs
Number of Loans	0	1
Pre-Modification outstanding recorded investment	0	700,000
Post-Modification outstanding recorded investment	0	503,000
Due to reduction in interest rate		0
Due to extension of maturity date		0
Due to permanent reduction in recorded investment		503,000
Total		$ 503,000

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Loans Receivable (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Dec. 31, 2010
Loans receivable
Total loans	$ 1,021,126	$ 1,047,755
Net deferred loan origination costs	731	745
Allowance for loan losses	(17,453)	(18,035)	(31,638)	(31,726)
Loans, net	1,004,404	1,030,465
One-to-four family residential real estate loans [Member]
Loans receivable
Total loans	209,540	218,596
Allowance for loan losses	(4,451)	(4,726)
Multi-family mortgage loans [Member]
Loans receivable
Total loans	338,502	352,019
Allowance for loan losses	(4,471)	(4,580)
Nonresidential real estate loans [Member]
Loans receivable
Total loans	261,207	264,672
Allowance for loan losses	(5,761)	(5,545)
Construction and land loans [Member]
Loans receivable
Total loans	6,933	8,552
Allowance for loan losses	(840)	(1,031)
Commercial loans [Member]
Loans receivable
Total loans	55,362	61,388
Allowance for loan losses	(1,230)	(1,324)
Commercial leases [Member]
Loans receivable
Total loans	147,168	139,783
Allowance for loan losses	(604)	(666)
Consumer loans [Member]
Loans receivable
Total loans	2,414	2,745
Allowance for loan losses	$ (96)	$ (163)

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Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Purchase and retirement of common stock (shares)	0	0
Cash dividends declared on common stock (usd per share)	$ 0	$ 0.01

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Consolidated Statements of Financial Condition (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]
Allowance for loan losses	$ 17,453	$ 18,035
Preferred Stock, par value (usd per share)	$ 0.01	$ 0.01
Preferred Stock, shares authorized	25,000,000	25,000,000
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Common Stock, par value (usd per share)	$ 0.01	$ 0.01
Common Stock, shares authorized	100,000,000	100,000,000
Common Stock, shares issued	21,072,966	21,072,966

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Loans Receivable (Tables)

3 Months Ended

Mar. 31, 2013

Receivables [Abstract]

Loans receivable

Loans receivable are as follows:

	March 31, 2013			December 31, 2012
One-to-four family residential real estate loans	$	209,540		$	218,596
Multi-family mortgage loans	338,502			352,019
Nonresidential real estate loans	261,207			264,672
Construction and land loans	6,933			8,552
Commercial loans	55,362			61,388
Commercial leases	147,168			139,783
Consumer loans	2,414			2,745
Total loans	1,021,126			1,047,755
Net deferred loan origination costs	731			745
Allowance for loan losses	(17,453		)	(18,035		)
Loans, net	$	1,004,404		$	1,030,465

Allowance for loan losses and the loans receivable by portfolio segment

The following tables present the balance in the allowance for loan losses and the loans receivable by portfolio segment and based on impairment method:

	Allowance for loan losses								Loan Balances
	Individually evaluated  for impairment		Purchased impaired loans		Collectively evaluated  for impairment		Total		Individually evaluated  for impairment		Purchased impaired loans		Collectively evaluated  for impairment		Total
March 31, 2013
One-to-four family residential real estate loans	$	116	$	3	$	4,332	$	4,451	$	4,961	$	388	$	204,191	$	209,540
Multi-family mortgage loans	747		—		3,724		4,471		11,243		—		327,259		338,502
Nonresidential real estate loans	351		24		5,386		5,761		5,883		2,554		252,770		261,207
Construction and land loans	135		74		631		840		1,576		1,021		4,336		6,933
Commercial loans	81		—		1,149		1,230		882		21		54,459		55,362
Commercial leases	—		—		604		604		—		—		147,168		147,168
Consumer loans	—		—		96		96		—		—		2,414		2,414
	$	1,430	$	101	$	15,922	$	17,453	$	24,545	$	3,984	$	992,597	1,021,126
Net deferred loan origination costs															731
Allowance for loan losses															(17,453		)
Loans, net															$	1,004,404

	Allowance for loan losses								Loan Balances
	Individually evaluated  for impairment		Purchased impaired loans		Collectively evaluated  for impairment		Total		Individually evaluated  for impairment		Purchased impaired loans		Collectively evaluated  for impairment		Total
December 31, 2012
One-to-four family residential real estate loans	$	137	$	5	$	4,584	$	4,726	$	5,256	$	380	$	212,960	$	218,596
Multi-family mortgage loans	729		—		3,851		4,580		4,801		—		347,218		352,019
Nonresidential real estate loans	401		8		5,136		5,545		11,918		2,568		250,186		264,672
Construction and land loans	294		96		641		1,031		2,210		1,021		5,321		8,552
Commercial loans	23		1		1,300		1,324		256		20		61,112		61,388
Commercial leases	—		—		666		666		—		—		139,783		139,783
Consumer loans	—		—		163		163		—		—		2,745		2,745
	$	1,584	$	110	$	16,341	$	18,035	$	24,441	$	3,989	$	1,019,325	1,047,755
Net deferred loan origination costs															745
Allowance for loan losses															(18,035		)
Loans, net															$	1,030,465

Allowance for loan losses

Activity in the allowance for loan losses is as follows:

	For the Three Months Ended March 31,
	2013			2012
Beginning balance	$	18,035		$	31,726
Loans charged offs:
One-to-four family residential real estate loans	(369		)	(672		)
Multi-family mortgage loans	(236		)	(554		)
Nonresidential real estate loans	(79		)	(433		)
Construction and land loans	(927		)	(47		)
Commercial loans	(19		)	(138		)
Consumer loans	—			(12		)
	(1,630		)	(1,856		)
Recoveries:
One-to-four family residential real estate loans	242			111
Multi-family mortgage loans	57			384
Nonresidential real estate loans	19			31
Construction and land loans	2			184
Commercial loans	5			57
Commercial leases	—			—
Consumer loans	1			5
	326			772
Net charge-off	(1,304		)	(1,084		)
Provision for loan losses	722			996
Ending balance	$	17,453		$	31,638

Loans Individually Evaluated For Impairment By Class Loans

The following table presents loans individually evaluated for impairment by class of loans, excluding purchased impaired loans:

	Loan Balance		Recorded Investment		Partial Charge-off		Allowance for Loan Losses Allocated		Average Investment in Impaired Loans		Interest Income Recognized
March 31, 2013
With no related allowance recorded:
One-to-four family residential real estate loans	$	5,142	$	4,047	$	1,051	$	—	$	2,983	$	15
One-to-four family residential real estate loans - non-owner occupied	810		649		139		—		1,379		7
Multi-family mortgage loans	7,651		7,379		4		—		3,417		12
Nonresidential real estate loans	4,088		3,467		251		—		5,519		2
Land loans	421		310		108		—		78		—
Commercial loans - secured	—		—		—		—		52		—
Commercial loans - unsecured	125		53		70		—		—		—
	18,237		15,905		1,623		—		13,428		36
With an allowance recorded:
One-to-four family residential real estate loans	162		149		3		18		—		—
One-to-four family residential real estate loans - non-owner occupied	134		100		34		98		373		—
Multi-family mortgage loans	3,609		3,099		477		685		2,758		9
Wholesale commercial lending	656		647		—		62		162		7
Nonresidential real estate loans	2,628		2,404		181		351		2,511		3
Land loans	2,500		1,264		1,232		135		1,972		—
Commercial loans - secured	1,034		830		201		81		361		—
	10,723		8,493		2,128		1,430		8,137		19
Total	$	28,960	$	24,398	$	3,751	$	1,430	$	21,565	$	55

	Loan Balance		Recorded Investment		Partial Charge-off		Allowance for Loan Losses Allocated		Average Investment in Impaired Loans		Interest Income Recognized
December 31, 2012
With no related allowance recorded:
One-to-four family residential real estate loans	$	5,250	$	4,216	$	1,027	$	—	$	2,814	$	149
One-to-four family residential real estate loans - non-owner occupied	567		534		34		—		4,322		90
Multi-family mortgage loans	2,959		2,106		819		—		9,303		189
Nonresidential real estate loans	11,850		9,220		2,490		—		6,218		347
Land loans	—		—		—		—		409		—
Commercial loans - secured	—		—		—		—		137		—
Commercial loans - other	529		52		477		—		25		21
Non-rated commercial leases	—		—		—		—		23		3
	21,155		16,128		4,847		—		23,251		799
With an allowance recorded:
One-to-four family residential real estate loans	—		—		—		—		2,500		—
One-to-four family residential real estate loans - non-owner occupied	626		499		128		137		1,996		13
Multi-family mortgage loans	3,182		2,645		521		729		6,562		20
Wholesale commercial lending	—		—		—		—		—		—
Nonresidential real estate loans	2,825		2,549		266		401		21,077		20
Land loans	3,812		2,210		1,602		294		2,933		113
Commercial loans - secured	386		204		182		23		1,849		—
Commercial loans - unsecured	—		—		—		—		267		—
Non-rated commercial leases	—		—		—		—		36		—
Consumer loans	—		—		—		—		2		—
	10,831		8,107		2,699		1,584		37,222		166
Total	$	31,986	$	24,235	$	7,546	$	1,584	$	60,473	$	965

Carrying Amount Of Purchased Impaired Loans

The carrying amount of these purchased impaired loans is as follows:

	March 31, 2013		December 31, 2012
One–to–four family residential real estate loans	$	388	$	380
Nonresidential real estate loans	2,554		2,568
Land loans	1,021		1,021
Commercial loans	21		20
Outstanding balance	$	3,984	$	3,989
Carrying amount, net of allowance ($101 at March 31, 2013, $110 at December 31, 2012)	$	3,883	$	3,879

Accretable Yield Or Income Expected To Be Collected Related To Purchased Impaired Loans

Accretable yield, or income expected to be collected, related to purchased impaired loans is as follows:

	For the Three Months Ended March 31,
	2013		2012
Beginning balance	$	196	$	2,270
New loans purchased	—		—
Disposals	—		127
Accretion of income	50		353
Ending balance	$	146	$	1,790

Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period

Purchased impaired loans for which it was probable at the date of acquisition that all contractually required payments would not be collected are as follows:

	March 31, 2013		December 31, 2012
Contractually required payments receivable of loans purchased:
One-to-four family residential real estate loans	$	1,143	$	1,143
Nonresidential real estate loans	3,871		3,884
Land loans	1,600		1,600
Commercial loans	222		597
	$	6,836	$	7,224

Schedule of Financing Receivables, Non Accrual Status

The following table presents the recorded investment in nonaccrual loans and loans past due over 90 days still on accrual by class of loans, excluding purchased impaired loans:

	Loan Balance		Recorded Investment		Loans Past Due Over 90 Days, Still Accruing
March 31, 2013
One-to-four family residential real estate loans	$	6,223	$	5,122	$	—
One-to-four family residential real estate loans – non owner occupied	1,106		866		—
Multi-family mortgage loans	11,197		10,174		243
Wholesale commercial lending	656		648		—
Nonresidential real estate loans	7,125		6,182		—
Land loans	2,921		1,575		—
Commercial loans – secured	1,034		830		—
Commercial loans – unsecured	125		53		—
Consumer loans	11		11		—
	$	30,398	$	25,461	$	243
December 31, 2012
One-to-four family residential real estate loans	$	7,286	$	6,154	$	70
One-to-four family residential real estate loans – non owner occupied	1,420		1,145		—
Multi-family mortgage loans	5,246		3,517		242
Nonresidential real estate loans	12,249		8,985		—
Land loans	3,817		2,210		—
Commercial loans – secured	386		204		—
Commercial loans – unsecured	552		52		17
	$	30,956	$	22,267	$	329

Past Due Financing Receivables

The following tables presents the aging of the recorded investment of loans at March 31, 2013 by class of loans:

	30-59 Days Past Due		60-89 Days Past Due		90 Days  or Greater Past Due		Total Past Due		Loans Not Past Due		Total
One-to-four family residential real estate loans	$	510	$	305	$	4,123	$	4,938	$	147,736	$	152,674
One-to-four family residential real estate loans - non-owner occupied	504		198		811		1,513		54,569		56,082
Multi-family mortgage loans	2,145		1,208		9,762		13,115		276,979		290,094
Wholesale commercial lending	—		—		—		—		46,592		46,592
Nonresidential real estate loans	3,159		—		5,788		8,947		247,603		256,550
Construction loans	—		—		—		—		47		47
Land loans	—		—		1,375		1,375		4,454		5,829
Commercial loans:
Secured	142		—		830		972		18,168		19,140
Unsecured	21		—		52		73		5,549		5,622
Municipal loans	—		—		—		—		4,784		4,784
Warehouse lines	—		—		—		—		1,827		1,827
Health care	—		—		—		—		17,257		17,257
Other	—		—		—		—		6,861		6,861
Commercial leases:
Investment rated commercial leases	303		—		—		303		107,786		108,089
Below investment grade	—		—		—		—		9,644		9,644
Non-rated	—		—		—		—		25,691		25,691
Lease pools	—		—		—		—		4,594		4,594
Consumer loans	2		1		11		14		2,410		2,424
	$	6,786	$	1,712	$	22,752	$	31,250	$	982,551	$	1,013,801

at December 31, 2012 by class of loans:

	30-59 Days Past Due		60-89 Days Past Due		90 Days  or Greater Past Due		Total Past Due		Loans Not Past Due		Total
One-to-four family residential real estate loans	$	1,584	$	778	$	4,463	$	6,825	$	153,279	$	160,104
One-to-four family residential real estate loans - non-owner occupied	855		579		249		1,683		55,906		57,589
Multi-family mortgage loans	5,393		3,049		3,218		11,660		291,103		302,763
Wholesale commercial lending	1,481		—		—		1,481		44,342		45,823
Nonresidential real estate loans	863		398		5,508		6,769		252,368		259,137
Land loans	702		1,220		630		2,552		4,956		7,508
Commercial loans:
Secured	659		3		204		866		22,336		23,202
Unsecured	81		78		16		175		5,774		5,949
Municipal loans	—		—		—		—		4,752		4,752
Warehouse lines	—		—		—		—		2,989		2,989
Health care	—		—		—		—		17,601		17,601
Other	—		—		—		—		6,977		6,977
Commercial leases:
Investment rated commercial leases	—		—		—		—		102,724		102,724
Below investment grade	—		—		—		—		9,294		9,294
Non-rated	—		—		—		—		25,657		25,657
Lease pools	—		—		—		—		3,028		3,028
Consumer loans	15		—		—		15		2,741		2,756
	$	11,633	$	6,105	$	14,288	$	32,026	$	1,005,827	$	1,037,853

	30-59 Days Past Due		60-89 Days Past Due		90 Days  or Greater Past Due		Total Past Due		Loans Not Past Due		Total
Purchased impaired loans
One-to-four family residential real estate loans - non-owner occupied	$	327	$	—	$	53	$	380	$	—	$	380
Nonresidential real estate loans	—		—		1,125		1,125		1,443		2,568
Land loans	—		—		1,021		1,021		—		1,021
Commercial loans – secured	—		—		20		20		—		20
	$	327	$	—	$	2,219	$	2,546	$	1,443	$	3,989

Recorded Investment In Past Due Purchased Impaired Loans

	30-59 Days Past Due		60-89 Days Past Due		90 Days  or Greater Past Due		Total Past Due		Loans Not Past Due		Total
Purchased impaired loans
One-to-four family residential real estate loans - non-owner occupied	$	—	$	—	$	388	$	388	$	—	$	388
Nonresidential real estate loans	—		—		1,124		1,124		1,430		2,554
Land loans	—		—		1,021		1,021		—		1,021
Commercial loans – secured	—		—		21		21		—		21
	$	—	$	—	$	2,554	$	2,554	$	1,430	$	3,984

	30-59 Days Past Due		60-89 Days Past Due		90 Days  or Greater Past Due		Total Past Due		Loans Not Past Due		Total
Purchased impaired loans
One-to-four family residential real estate loans - non-owner occupied	$	327	$	—	$	53	$	380	$	—	$	380
Nonresidential real estate loans	—		—		1,125		1,125		1,443		2,568
Land loans	—		—		1,021		1,021		—		1,021
Commercial loans – secured	—		—		20		20		—		20
	$	327	$	—	$	2,219	$	2,546	$	1,443	$	3,989

Troubled Debt Restructurings on Financing Receivables

The following table presents loans classified as TDRs:

	March 31, 2013		December 31, 2012
One-to-four family residential real estate	$	2,640	$	2,802
Multi-family mortgage	1,193		1,201
Nonresidential real estate	—		5,189
Troubled debt restructured loans – accrual loans	3,833		9,192
One-to-four family residential real estate	820		767
Multi-family mortgage	936		938
Nonresidential real estate	—		270
Troubled debt restructured loans – nonaccrual loans	1,756		1,975
Total troubled debt restructured loans	$	5,589	$	11,167

Loans By Class Modified As Troubled Debt Restructuring On Financing Receivables

The following tables present TDR activity:

	Three months ended March 31,
	2013					2012
	Number of loans	Pre- Modification outstanding recorded investment		Post- Modification outstanding recorded investment		Number of loans	Pre- Modification outstanding recorded investment		Post- Modification outstanding recorded investment
One-to-four family residential real estate	1	$	384	$	384	2	$	392	$	392
Multi-family mortgage	—	—		—		1	700		503
Total	1	$	384	$	384	3	$	1,092	$	895

	Due to reduction in interest rate		Due to extension of maturity date		Due to permanent reduction in recorded investment		Total
For the three months ended March 31, 2013
One-to-four family residential real estate	$	—	$	384	$	—	$	384
Total	$	—	$	384	$	—	$	384
For the three months ended March 31, 2012
One-to-four family residential real estate	$	372	$	20	$	—	$	392
Multi-family mortgage	—		—		503		503
Total	$	372	$	20	$	503	$	895

Loans By Class Modified As Troubled Debt Restructurings With Payment Default

The following table presents TDRs for which there was a payment default during the three months ending March 31, 2013 and 2012 within twelve months following the modification.

	2013			2012
	Number of loans	Recorded investment		Number of loans	Recorded investment
One-to-four family residential real estate	—	$	—	1	$	278
Nonresidential real estate	—	—		1	700
Total	—	$	—	2	$	978

Financing Receivable Credit Quality Indicators

As of March 31, 2013, based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	Pass		Special Mention		Substandard		Nonaccrual		Total
One-to-four family residential real estate loans	$	147,526	$	126	$	1,016	$	4,111	$	152,779
One-to-four family residential real estate loans non-owner occupied	52,066		1,439		1,967		1,289		56,761
Multi-family mortgage loans	254,877		14,879		11,169		10,935		291,860
Wholesale commercial lending	43,876		—		2,766		—		46,642
Nonresidential real estate loans	197,355		37,929		17,176		8,747		261,207
Construction loans	46		—		—		—		46
Land loans	2,582		—		1,707		2,598		6,887
Commercial loans:
Secured	15,496		2,419		351		852		19,118
Unsecured	3,776		312		1,466		52		5,606
Municipal loans	4,751		—		—		—		4,751
Warehouse lines	1,812		—		—		—		1,812
Health care	17,238		—		—		—		17,238
Other	6,837		—		—		—		6,837
Commercial leases:
Investment rated commercial leases	107,491		—		—		—		107,491
Below investment grade	9,569		—		—		—		9,569
Non-rated	25,533		—		—		—		25,533
Lease pools	4,575		—		—		—		4,575
Consumer loans	2,402		1		—		11		2,414
Total	$	897,808	$	57,105	$	37,618	$	28,595	$	1,021,126

As of December 31, 2012, based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	Pass		Special Mention		Substandard		Nonaccrual		Total
One-to-four family residential real estate loans	$	152,711	$	—	$	1,428	$	6,158	$	160,297
One-to-four family residential real estate loans non-owner occupied	51,849		1,486		3,440		1,524		58,299
Multi-family mortgage loans	275,338		6,139		21,128		3,559		306,164
Wholesale commercial lending	44,074		—		1,781		—		45,855
Nonresidential real estate loans	199,802		30,898		22,345		11,627		264,672
Construction loans	—		—		—		—		—
Land loans	2,769		158		2,394		3,231		8,552
Commercial loans:									—
Secured	19,579		2,418		988		225		23,210
Unsecured	4,061		323		1,497		52		5,933
Municipal loans	4,751		—		—		—		4,751
Warehouse lines	2,971		—		—		—		2,971
Health care	17,566		—		—		—		17,566
Other	6,957		—		—		—		6,957
Commercial leases:									—
Investment rated commercial leases	102,101		—		—		—		102,101
Below investment grade	9,205		—		—		—		9,205
Non-rated	25,466		—		—		—		25,466
Lease pools	3,011		—		—		—		3,011
Consumer loans	2,742		—		3		—		2,745
Total	$	924,953	$	41,422	$	55,004	$	26,376	$	1,047,755

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2013	May 06, 2013
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2013
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2013
Entity Registrant Name	BankFinancial CORP
Entity Central Index Key	0001303942
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		21,072,966
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No

XML

Fair Value (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Schedule of Company's financial instruments measured at fair values

The following table sets forth the Company’s financial assets that were accounted for at fair value and are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value
March 31, 2013
Securities:
Certificates of deposit	$	—	$	22,281	$	—	$	22,281
Municipal securities	—		366		—		366
Equity mutual fund	524		—		—		524
Mortgage-backed securities – residential	—		32,609		—		32,609
Collateralized mortgage obligations – residential	—		5,453		—		5,453
SBA-guaranteed loan participation certificates	—		40		—		40
	$	524	$	60,749	$	—	$	61,273
December 31, 2012
Securities:
Certificates of deposit	$	—	$	33,456	$	—	$	33,456
Municipal securities	—		369		—		369
Equity mutual fund	528		—		—		528
Mortgage-backed securities - residential	—		34,233		—		34,233
Collateralized mortgage obligations – residential	—		9,204		—		9,204
SBA-guaranteed loan participation certificates	—		42		—		42
	$	528	$	77,304	$	—	$	77,832

Schedule of Company's financial instruments measured on non recurring at fair values

The following table sets forth the Company’s assets that were measured at fair value on a non-recurring basis:

	Fair Value Measurement Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value
March 31, 2013
Impaired loans:
One–to–four family residential real estate loans	$	—	$	—	$	186	$	186
Multi-family mortgage loans	—		—		2,999		2,999
Nonresidential real estate loans	—		—		3,014		3,014
Construction and land loans	—		—		2,150		2,150
Commercial loans	—		—		750		750
	$	—	$	—	$	9,099	$	9,099
Other real estate owned:
One–to–four family residential real estate	$	—	$	—	$	1,720	$	1,720
Multi-family mortgage	—		—		—		—
Nonresidential real estate	—		—		3,268		3,268
Land	—		—		3,100		3,100
	$	—	$	—	$	8,088	$	8,088
Mortgage servicing rights	$	—	$	—	$	211	$	211
December 31, 2012
Impaired loans:
One–to–four family residential real estate loans	$	—	$	—	$	410	$	410
Multi-family mortgage loans	—		—		1,932		1,932
Nonresidential real estate loans	—		—		3,110		3,110
Construction and land loans	—		—		2,840		2,840
Commercial loans	—		—		181		181
	$	—	$	—	$	8,473	$	8,473
Other real estate owned:
One–to–four family residential real estate	$	—	$	—	$	2,080	$	2,080
Multi-family mortgage	—		—		720		720
Nonresidential real estate	—		—		3,966		3,966
Land	—		—		3,592		3,592
	$	—	$	—	$	10,358	$	10,358
Mortgage servicing rights	$	—	$	—	$	208	$	208

Schedule of fair value quantitative information

The following table presents quantitative information, based on certain empirical data with respect to Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at March 31, 2013:

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired loans:
One-to-four family residential real estate loans	$	186	Sales comparison	Discount applied to valuation	6%-90% (67%)
Multi-family mortgage loans	2,999		Sales comparison	Comparison between sales and income approaches	2%-95% (47%)
			Income approach	Cap Rate	6.2% to 11.8% (7.65%)
Nonresidential real estate loans	3,014		Sales comparison	Comparison between sales and income approaches	6%-99% (63%)
			Income approach	Cap Rate	8.5%-10.3% (8.93%)
Construction and land loans	2,150		Sales comparison	Discount applied to valuation	10%-29% (28%)
Commercial loans	750		Sales comparison	Discount applied to valuation	0%-11% (58%)
Impaired loans	$	9,099
Other real estate owned:
One-to-four family residential real estate	$	1,720	Sales comparison	Discount applied to valuation	7%-77% (18%)
Nonresidential real estate	3,268		Sales comparison	Comparison between sales and income approaches	7%-30% (24%)
Land	3,100		Sales comparison	Discount applied to valuation	7%-21% (10%)
Other real estate owned	$	8,088
Mortgage servicing rights	$	211	Third party valuation	Present value of future servicing income based on prepayment speeds	12.3 % - 25.7% (17.16%)
			Third party valuation	Present value of future servicing income based on default rates	12%

Carrying amount and estimated fair value of financial instruments

The carrying amount and estimated fair value of financial instruments is as follows:

				Fair Value Measurements at March 31, 2013 Using:
	Carrying Amount			Level 1		Level 2			Level 3		Total
Financial assets
Cash and cash equivalents	$	311,128		$	17,742	$	293,386		$	—	$	311,128
Securities	61,273			524		60,749			—		61,273
Loans held-for-sale	55			—		55			—		55
Loans receivable, net of allowance for loan losses	1,004,404			—		964,073			9,099		973,172
FHLBC stock	7,566			—		—			—		N/A
Accrued interest receivable	3,951			—		3,951			—		3,951
Financial liabilities											—
Noninterest-bearing demand deposits	$	(131,856	)	$	—	$	(131,856	)	$	—	$	(131,856	)
Savings deposits	(148,184		)	—		(148,184		)	—		(148,184		)
NOW and money market accounts	(693,650		)	—		(693,650		)	—		(693,650		)
Certificates of deposit	(297,860		)	—		(299,298		)	—		(299,298		)
Borrowings	(2,740		)	—		(2,777		)	—		(2,777		)
Accrued interest payable	(137		)	—		(137		)	—		(137		)

				Fair Value Measurements at  December 31, 2012 Using:
	Carrying Amount			Level 1		Level 2			Level 3		Total
Financial assets
Cash and cash equivalents	$	275,764		$	20,361	$	255,403		$	—	$	275,764
Securities	77,832			528		77,304			—		77,832
Loans held-for-sale	2,166			—		2,166			—		2,166
Loans receivable, net of allowance for loan losses	1,030,465			—		999,578			8,473		1,008,051
FHLBC stock	8,412			—		—			—		N/A
Accrued interest receivable	38,251			—		38,251			—		38,251
Financial liabilities
Noninterest-bearing demand deposits	$	(134,597	)	$	—	$	(134,597	)	$	—	$	(134,597	)
Savings deposits	(144,726		)	—		(144,726		)	—		(144,726		)
NOW and money market accounts	(697,775		)	—		(697,775		)	—		(697,775		)
Certificates of deposit	(305,253		)	—		(306,859		)	—		(306,859		)
Borrowings	(5,567		)	—		(5,608		)	—		(5,608		)
Accrued interest payable	(157		)	—		(157		)	—		(157		)

XML

Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Interest and dividend income
Loans, including fees	$ 12,278	$ 16,112
Securities	250	442
Other	185	80
Total interest income	12,713	16,634
Interest expense
Deposits	986	1,214
Borrowings	8	26
Total interest expense	994	1,240
Net interest income	11,719	15,394
Provision for loan losses	722	996
Net interest income	10,997	14,398
Noninterest income
Deposit service charges and fees	499	557
Other fee income	375	385
Insurance commissions and annuities income	109	122
Gain on sale of loans, net	1,417	267
Loan servicing fees	123	128
Amortization and impairment of servicing assets	(33)	(82)
Earnings on bank owned life insurance	70	126
Trust	181	184
Other	125	145
Total noninterest income	2,866	1,832
Noninterest expense
Compensation and benefits	6,752	6,679
Office occupancy and equipment	1,948	2,032
Advertising and public relations	146	106
Information technology	749	848
Supplies, telephone, and postage	461	390
Amortization of intangibles	156	163
Nonperforming asset management	694	1,240
Operations of other real estate owned	511	552
FDIC insurance premiums	492	348
Other	1,276	1,078
Total noninterest expense	13,185	13,436
Income (loss) before income taxes	678	2,794
Income tax expense (benefit)	0	457
Net income (loss)	$ 678	$ 2,337
Basic loss per common share (usd per share)	$ 0.03	$ 0.12
Diluted loss per common share (usd per share)	$ 0.03	$ 0.12
Weighted average common shares outstanding (shares)	19,964,028	19,835,273
Diluted weighted average common shares outstanding (shares)	19,964,028	19,836,080

XML

Loans Receivable (Notes)

3 Months Ended

Mar. 31, 2013

Receivables [Abstract]

Loans Receivable

Loans receivable are as follows:

	March 31, 2013			December 31, 2012
One-to-four family residential real estate loans	$	209,540		$	218,596
Multi-family mortgage loans	338,502			352,019
Nonresidential real estate loans	261,207			264,672
Construction and land loans	6,933			8,552
Commercial loans	55,362			61,388
Commercial leases	147,168			139,783
Consumer loans	2,414			2,745
Total loans	1,021,126			1,047,755
Net deferred loan origination costs	731			745
Allowance for loan losses	(17,453		)	(18,035		)
Loans, net	$	1,004,404		$	1,030,465

The following tables present the balance in the allowance for loan losses and the loans receivable by portfolio segment and based on impairment method:

	Allowance for loan losses								Loan Balances
	Individually evaluated  for impairment		Purchased impaired loans		Collectively evaluated  for impairment		Total		Individually evaluated  for impairment		Purchased impaired loans		Collectively evaluated  for impairment		Total
March 31, 2013
One-to-four family residential real estate loans	$	116	$	3	$	4,332	$	4,451	$	4,961	$	388	$	204,191	$	209,540
Multi-family mortgage loans	747		—		3,724		4,471		11,243		—		327,259		338,502
Nonresidential real estate loans	351		24		5,386		5,761		5,883		2,554		252,770		261,207
Construction and land loans	135		74		631		840		1,576		1,021		4,336		6,933
Commercial loans	81		—		1,149		1,230		882		21		54,459		55,362
Commercial leases	—		—		604		604		—		—		147,168		147,168
Consumer loans	—		—		96		96		—		—		2,414		2,414
	$	1,430	$	101	$	15,922	$	17,453	$	24,545	$	3,984	$	992,597	1,021,126
Net deferred loan origination costs															731
Allowance for loan losses															(17,453		)
Loans, net															$	1,004,404

	Allowance for loan losses								Loan Balances
	Individually evaluated  for impairment		Purchased impaired loans		Collectively evaluated  for impairment		Total		Individually evaluated  for impairment		Purchased impaired loans		Collectively evaluated  for impairment		Total
December 31, 2012
One-to-four family residential real estate loans	$	137	$	5	$	4,584	$	4,726	$	5,256	$	380	$	212,960	$	218,596
Multi-family mortgage loans	729		—		3,851		4,580		4,801		—		347,218		352,019
Nonresidential real estate loans	401		8		5,136		5,545		11,918		2,568		250,186		264,672
Construction and land loans	294		96		641		1,031		2,210		1,021		5,321		8,552
Commercial loans	23		1		1,300		1,324		256		20		61,112		61,388
Commercial leases	—		—		666		666		—		—		139,783		139,783
Consumer loans	—		—		163		163		—		—		2,745		2,745
	$	1,584	$	110	$	16,341	$	18,035	$	24,441	$	3,989	$	1,019,325	1,047,755
Net deferred loan origination costs															745
Allowance for loan losses															(18,035		)
Loans, net															$	1,030,465

Activity in the allowance for loan losses is as follows:

	For the Three Months Ended March 31,
	2013			2012
Beginning balance	$	18,035		$	31,726
Loans charged offs:
One-to-four family residential real estate loans	(369		)	(672		)
Multi-family mortgage loans	(236		)	(554		)
Nonresidential real estate loans	(79		)	(433		)
Construction and land loans	(927		)	(47		)
Commercial loans	(19		)	(138		)
Consumer loans	—			(12		)
	(1,630		)	(1,856		)
Recoveries:
One-to-four family residential real estate loans	242			111
Multi-family mortgage loans	57			384
Nonresidential real estate loans	19			31
Construction and land loans	2			184
Commercial loans	5			57
Commercial leases	—			—
Consumer loans	1			5
	326			772
Net charge-off	(1,304		)	(1,084		)
Provision for loan losses	722			996
Ending balance	$	17,453		$	31,638

The following table presents loans individually evaluated for impairment by class of loans, excluding purchased impaired loans:

	Loan Balance		Recorded Investment		Partial Charge-off		Allowance for Loan Losses Allocated		Average Investment in Impaired Loans		Interest Income Recognized
March 31, 2013
With no related allowance recorded:
One-to-four family residential real estate loans	$	5,142	$	4,047	$	1,051	$	—	$	2,983	$	15
One-to-four family residential real estate loans - non-owner occupied	810		649		139		—		1,379		7
Multi-family mortgage loans	7,651		7,379		4		—		3,417		12
Nonresidential real estate loans	4,088		3,467		251		—		5,519		2
Land loans	421		310		108		—		78		—
Commercial loans - secured	—		—		—		—		52		—
Commercial loans - unsecured	125		53		70		—		—		—
	18,237		15,905		1,623		—		13,428		36
With an allowance recorded:
One-to-four family residential real estate loans	162		149		3		18		—		—
One-to-four family residential real estate loans - non-owner occupied	134		100		34		98		373		—
Multi-family mortgage loans	3,609		3,099		477		685		2,758		9
Wholesale commercial lending	656		647		—		62		162		7
Nonresidential real estate loans	2,628		2,404		181		351		2,511		3
Land loans	2,500		1,264		1,232		135		1,972		—
Commercial loans - secured	1,034		830		201		81		361		—
	10,723		8,493		2,128		1,430		8,137		19
Total	$	28,960	$	24,398	$	3,751	$	1,430	$	21,565	$	55

	Loan Balance		Recorded Investment		Partial Charge-off		Allowance for Loan Losses Allocated		Average Investment in Impaired Loans		Interest Income Recognized
December 31, 2012
With no related allowance recorded:
One-to-four family residential real estate loans	$	5,250	$	4,216	$	1,027	$	—	$	2,814	$	149
One-to-four family residential real estate loans - non-owner occupied	567		534		34		—		4,322		90
Multi-family mortgage loans	2,959		2,106		819		—		9,303		189
Nonresidential real estate loans	11,850		9,220		2,490		—		6,218		347
Land loans	—		—		—		—		409		—
Commercial loans - secured	—		—		—		—		137		—
Commercial loans - other	529		52		477		—		25		21
Non-rated commercial leases	—		—		—		—		23		3
	21,155		16,128		4,847		—		23,251		799
With an allowance recorded:
One-to-four family residential real estate loans	—		—		—		—		2,500		—
One-to-four family residential real estate loans - non-owner occupied	626		499		128		137		1,996		13
Multi-family mortgage loans	3,182		2,645		521		729		6,562		20
Wholesale commercial lending	—		—		—		—		—		—
Nonresidential real estate loans	2,825		2,549		266		401		21,077		20
Land loans	3,812		2,210		1,602		294		2,933		113
Commercial loans - secured	386		204		182		23		1,849		—
Commercial loans - unsecured	—		—		—		—		267		—
Non-rated commercial leases	—		—		—		—		36		—
Consumer loans	—		—		—		—		2		—
	10,831		8,107		2,699		1,584		37,222		166
Total	$	31,986	$	24,235	$	7,546	$	1,584	$	60,473	$	965

Purchased Impaired Loans

As a result of its acquisition of Downers Grove National Bank, the Company holds purchased loans for which there was evidence of deterioration of credit quality since origination and for which it was probable that all contractually required payments would not be collected as of the date of the acquisition. The carrying amount of these purchased impaired loans is as follows:

	March 31, 2013		December 31, 2012
One–to–four family residential real estate loans	$	388	$	380
Nonresidential real estate loans	2,554		2,568
Land loans	1,021		1,021
Commercial loans	21		20
Outstanding balance	$	3,984	$	3,989
Carrying amount, net of allowance ($101 at March 31, 2013, $110 at December 31, 2012)	$	3,883	$	3,879

Accretable yield, or income expected to be collected, related to purchased impaired loans is as follows:

	For the Three Months Ended March 31,
	2013		2012
Beginning balance	$	196	$	2,270
New loans purchased	—		—
Disposals	—		127
Accretion of income	50		353
Ending balance	$	146	$	1,790

For the above purchased impaired loans, the Company decreased the allowance for loan losses by $9,000 for the three months ended March 31, 2013 and increased the allowance for loan losses by $337,000 for the three months ended March 31, 2012.

Purchased impaired loans for which it was probable at the date of acquisition that all contractually required payments would not be collected are as follows:

	March 31, 2013		December 31, 2012
Contractually required payments receivable of loans purchased:
One-to-four family residential real estate loans	$	1,143	$	1,143
Nonresidential real estate loans	3,871		3,884
Land loans	1,600		1,600
Commercial loans	222		597
	$	6,836	$	7,224

At acquisition, cash flows expected to be collected were $18.8 million, compared to the fair value of purchased impaired loans of $15.4 million.

Nonaccrual loans

The following table presents the recorded investment in nonaccrual loans and loans past due over 90 days still on accrual by class of loans, excluding purchased impaired loans:

	Loan Balance		Recorded Investment		Loans Past Due Over 90 Days, Still Accruing
March 31, 2013
One-to-four family residential real estate loans	$	6,223	$	5,122	$	—
One-to-four family residential real estate loans – non owner occupied	1,106		866		—
Multi-family mortgage loans	11,197		10,174		243
Wholesale commercial lending	656		648		—
Nonresidential real estate loans	7,125		6,182		—
Land loans	2,921		1,575		—
Commercial loans – secured	1,034		830		—
Commercial loans – unsecured	125		53		—
Consumer loans	11		11		—
	$	30,398	$	25,461	$	243
December 31, 2012
One-to-four family residential real estate loans	$	7,286	$	6,154	$	70
One-to-four family residential real estate loans – non owner occupied	1,420		1,145		—
Multi-family mortgage loans	5,246		3,517		242
Nonresidential real estate loans	12,249		8,985		—
Land loans	3,817		2,210		—
Commercial loans – secured	386		204		—
Commercial loans – unsecured	552		52		17
	$	30,956	$	22,267	$	329

Nonaccrual loans and impaired loans are defined differently. Some loans may be included in both categories, and some may only be included in one category. Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

The Company’s reserve for uncollected loan interest was $1.2 million and $942,000 at March 31, 2013 and December 31, 2012, respectively. Except for purchased impaired loans, when a loan is on non-accrual status and the ultimate collectability of the total principal of an impaired loan is in doubt, all payments are applied to principal under the cost recovery method. Alternatively, when a loan is on non-accrual status but there is doubt concerning only the ultimate collectability of interest, contractual interest is credited to interest income only when received, under the cash basis method pursuant to the provisions of FASB ASC 310–10, as applicable. In all cases, the average balances are calculated based on the month–end balances of the financing receivables within the period reported pursuant to the provisions of FASB ASC 310–10, as applicable.

Past Due Loans

The following tables presents the aging of the recorded investment of loans at March 31, 2013 by class of loans:

	30-59 Days Past Due		60-89 Days Past Due		90 Days  or Greater Past Due		Total Past Due		Loans Not Past Due		Total
One-to-four family residential real estate loans	$	510	$	305	$	4,123	$	4,938	$	147,736	$	152,674
One-to-four family residential real estate loans - non-owner occupied	504		198		811		1,513		54,569		56,082
Multi-family mortgage loans	2,145		1,208		9,762		13,115		276,979		290,094
Wholesale commercial lending	—		—		—		—		46,592		46,592
Nonresidential real estate loans	3,159		—		5,788		8,947		247,603		256,550
Construction loans	—		—		—		—		47		47
Land loans	—		—		1,375		1,375		4,454		5,829
Commercial loans:
Secured	142		—		830		972		18,168		19,140
Unsecured	21		—		52		73		5,549		5,622
Municipal loans	—		—		—		—		4,784		4,784
Warehouse lines	—		—		—		—		1,827		1,827
Health care	—		—		—		—		17,257		17,257
Other	—		—		—		—		6,861		6,861
Commercial leases:
Investment rated commercial leases	303		—		—		303		107,786		108,089
Below investment grade	—		—		—		—		9,644		9,644
Non-rated	—		—		—		—		25,691		25,691
Lease pools	—		—		—		—		4,594		4,594
Consumer loans	2		1		11		14		2,410		2,424
	$	6,786	$	1,712	$	22,752	$	31,250	$	982,551	$	1,013,801

	30-59 Days Past Due		60-89 Days Past Due		90 Days  or Greater Past Due		Total Past Due		Loans Not Past Due		Total
Purchased impaired loans
One-to-four family residential real estate loans - non-owner occupied	$	—	$	—	$	388	$	388	$	—	$	388
Nonresidential real estate loans	—		—		1,124		1,124		1,430		2,554
Land loans	—		—		1,021		1,021		—		1,021
Commercial loans – secured	—		—		21		21		—		21
	$	—	$	—	$	2,554	$	2,554	$	1,430	$	3,984

The following tables presents the aging of the recorded investment of loans at December 31, 2012 by class of loans:

	30-59 Days Past Due		60-89 Days Past Due		90 Days  or Greater Past Due		Total Past Due		Loans Not Past Due		Total
One-to-four family residential real estate loans	$	1,584	$	778	$	4,463	$	6,825	$	153,279	$	160,104
One-to-four family residential real estate loans - non-owner occupied	855		579		249		1,683		55,906		57,589
Multi-family mortgage loans	5,393		3,049		3,218		11,660		291,103		302,763
Wholesale commercial lending	1,481		—		—		1,481		44,342		45,823
Nonresidential real estate loans	863		398		5,508		6,769		252,368		259,137
Land loans	702		1,220		630		2,552		4,956		7,508
Commercial loans:
Secured	659		3		204		866		22,336		23,202
Unsecured	81		78		16		175		5,774		5,949
Municipal loans	—		—		—		—		4,752		4,752
Warehouse lines	—		—		—		—		2,989		2,989
Health care	—		—		—		—		17,601		17,601
Other	—		—		—		—		6,977		6,977
Commercial leases:
Investment rated commercial leases	—		—		—		—		102,724		102,724
Below investment grade	—		—		—		—		9,294		9,294
Non-rated	—		—		—		—		25,657		25,657
Lease pools	—		—		—		—		3,028		3,028
Consumer loans	15		—		—		15		2,741		2,756
	$	11,633	$	6,105	$	14,288	$	32,026	$	1,005,827	$	1,037,853

	30-59 Days Past Due		60-89 Days Past Due		90 Days  or Greater Past Due		Total Past Due		Loans Not Past Due		Total
Purchased impaired loans
One-to-four family residential real estate loans - non-owner occupied	$	327	$	—	$	53	$	380	$	—	$	380
Nonresidential real estate loans	—		—		1,125		1,125		1,443		2,568
Land loans	—		—		1,021		1,021		—		1,021
Commercial loans – secured	—		—		20		20		—		20
	$	327	$	—	$	2,219	$	2,546	$	1,443	$	3,989

Troubled Debt Restructurings

The Company evaluates loan extensions or modifications in accordance with FASB ASC 310–40 with respect to the classification of the loan as a TDR. In general, if the Company grants a loan extension or modification to a borrower for other than an insignificant period of time that includes a below–market interest rate, principal forgiveness, payment forbearance or other concession intended to minimize the economic loss to the Company, the loan extension or loan modification is classified as a TDR. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal then due and payable, management measures any impairment on the restructured loan in the same manner as for impaired loans as noted above.

The Company had $5.6 million of TDRs at March 31, 2013, compared to $11.2 million at December 31, 2012, with $287,000 in specific valuation reserves allocated to those loans at March 31, 2013 and $318,000 in specific valuation reserves allocated at December 31, 2012. The Company had no outstanding commitments to borrowers whose loans are classified as TDRs at either date.

The following table presents loans classified as TDRs:

	March 31, 2013		December 31, 2012
One-to-four family residential real estate	$	2,640	$	2,802
Multi-family mortgage	1,193		1,201
Nonresidential real estate	—		5,189
Troubled debt restructured loans – accrual loans	3,833		9,192
One-to-four family residential real estate	820		767
Multi-family mortgage	936		938
Nonresidential real estate	—		270
Troubled debt restructured loans – nonaccrual loans	1,756		1,975
Total troubled debt restructured loans	$	5,589	$	11,167

Periodically, the Company will restructure a note into two separate notes (A/B structure), charging off the entire B portion of the note. The A note is structured with appropriate loan-to-value and cash flow coverage ratios that provide for a high likelihood of repayment. The A note is classified as a non-performing note until the borrower has displayed a historical payment performance for a reasonable time prior to and subsequent to the restructuring. A period of sustained repayment for at least six months generally is required to return the note to accrual status provided that management has determined that the performance is reasonably expected to continue. The A note will be classified as a restructured note (either performing or nonperforming) through the calendar year of the restructuring that the historical payment performance has been established. These notes will be no longer included as a TDR above in the subsequent calendar year.

During the periods ending March 31, 2013 and 2012, the terms of certain loans were modified and classified as TDRs. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan.

The following tables present TDR activity:

	Three months ended March 31,
	2013					2012
	Number of loans	Pre- Modification outstanding recorded investment		Post- Modification outstanding recorded investment		Number of loans	Pre- Modification outstanding recorded investment		Post- Modification outstanding recorded investment
One-to-four family residential real estate	1	$	384	$	384	2	$	392	$	392
Multi-family mortgage	—	—		—		1	700		503
Total	1	$	384	$	384	3	$	1,092	$	895

	Due to reduction in interest rate		Due to extension of maturity date		Due to permanent reduction in recorded investment		Total
For the three months ended March 31, 2013
One-to-four family residential real estate	$	—	$	384	$	—	$	384
Total	$	—	$	384	$	—	$	384
For the three months ended March 31, 2012
One-to-four family residential real estate	$	372	$	20	$	—	$	392
Multi-family mortgage	—		—		503		503
Total	$	372	$	20	$	503	$	895

The TDRs described above had no impact on interest income, resulted in no change to the allowance for loan losses and resulted in no charge offs for the three months ended March 31, 2013. The TDR's had no impact on interest income, but increased the allowance for loan losses by $183,000 and resulted in charge offs of $470,000 during the three months ended March 31, 2012.

The following table presents TDRs for which there was a payment default during the three months ending March 31, 2013 and 2012 within twelve months following the modification.

	2013			2012
	Number of loans	Recorded investment		Number of loans	Recorded investment
One-to-four family residential real estate	—	$	—	1	$	278
Nonresidential real estate	—	—		1	700
Total	—	$	—	2	$	978

A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

The TDRs that subsequently defaulted had no material impact on the allowance for loans losses during the three months ending March 31, 2013 and 2012.

The terms of certain other loans were modified during the quarters ending March 31, 2013 and 2012 that did not meet the definition of a TDR. These loans have a total recorded investment of $324,000 and $1.7 million at March 31, 2013 and 2012. The modification of these loans involved either a modification of the terms of a loan to borrowers who were not experiencing financial difficulties or a delay in a payment that was considered to be insignificant.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy.

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, including current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans based on credit risk. This analysis includes non-homogeneous loans, such as commercial and commercial real estate loans. This analysis is performed on a monthly basis. The Company uses the following definitions for risk ratings:

Special Mention. A Special Mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

Substandard. Loans categorized as substandard continue to accrue interest, but exhibit a well-defined weakness or weaknesses that may jeopardize the liquidation of the debt. The loans continue to accrue interest because they are well secured and collection of principal and interest is expected within a reasonable time. The risk rating guidance published by the Office of the Comptroller of the Currency clarifies that a loan with a well-defined weakness does not have to present a probability of default for the loan to be rated Substandard, and that an individual loan’s loss potential does not have to be distinct for the loan to be rated Substandard.

Nonaccrual. An asset classified Nonaccrual has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The loans were placed on nonaccrual status.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered “Pass” rated loans.

As of March 31, 2013, based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	Pass		Special Mention		Substandard		Nonaccrual		Total
One-to-four family residential real estate loans	$	147,526	$	126	$	1,016	$	4,111	$	152,779
One-to-four family residential real estate loans non-owner occupied	52,066		1,439		1,967		1,289		56,761
Multi-family mortgage loans	254,877		14,879		11,169		10,935		291,860
Wholesale commercial lending	43,876		—		2,766		—		46,642
Nonresidential real estate loans	197,355		37,929		17,176		8,747		261,207
Construction loans	46		—		—		—		46
Land loans	2,582		—		1,707		2,598		6,887
Commercial loans:
Secured	15,496		2,419		351		852		19,118
Unsecured	3,776		312		1,466		52		5,606
Municipal loans	4,751		—		—		—		4,751
Warehouse lines	1,812		—		—		—		1,812
Health care	17,238		—		—		—		17,238
Other	6,837		—		—		—		6,837
Commercial leases:
Investment rated commercial leases	107,491		—		—		—		107,491
Below investment grade	9,569		—		—		—		9,569
Non-rated	25,533		—		—		—		25,533
Lease pools	4,575		—		—		—		4,575
Consumer loans	2,402		1		—		11		2,414
Total	$	897,808	$	57,105	$	37,618	$	28,595	$	1,021,126

As of December 31, 2012, based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	Pass		Special Mention		Substandard		Nonaccrual		Total
One-to-four family residential real estate loans	$	152,711	$	—	$	1,428	$	6,158	$	160,297
One-to-four family residential real estate loans non-owner occupied	51,849		1,486		3,440		1,524		58,299
Multi-family mortgage loans	275,338		6,139		21,128		3,559		306,164
Wholesale commercial lending	44,074		—		1,781		—		45,855
Nonresidential real estate loans	199,802		30,898		22,345		11,627		264,672
Construction loans	—		—		—		—		—
Land loans	2,769		158		2,394		3,231		8,552
Commercial loans:									—
Secured	19,579		2,418		988		225		23,210
Unsecured	4,061		323		1,497		52		5,933
Municipal loans	4,751		—		—		—		4,751
Warehouse lines	2,971		—		—		—		2,971
Health care	17,566		—		—		—		17,566
Other	6,957		—		—		—		6,957
Commercial leases:									—
Investment rated commercial leases	102,101		—		—		—		102,101
Below investment grade	9,205		—		—		—		9,205
Non-rated	25,466		—		—		—		25,466
Lease pools	3,011		—		—		—		3,011
Consumer loans	2,742		—		3		—		2,745
Total	$	924,953	$	41,422	$	55,004	$	26,376	$	1,047,755

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Securities (Notes)

3 Months Ended

Mar. 31, 2013

Investments, Debt and Equity Securities [Abstract]

SECURITIES

he 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
March 31, 2013
Certificates of deposit	$	22,281	$	—	$	—		$	22,281
Municipal securities	350		16		—			366
Equity mutual fund	500		24		—			524
Mortgage-backed securities - residential	31,026		1,614		(31		)	32,609
Collateralized mortgage obligations - residential	5,398		63		(8		)	5,453
SBA-guaranteed loan participation certificates	40		—		—			40
	$	59,595	$	1,717	$	(39	)	$	61,273
December 31, 2012
Certificates of deposit	$	33,456	$	—	$	—		$	33,456
Municipal securities	350		19		—			369
Equity mutual fund	500		28		—			528
Mortgage-backed securities - residential	32,572		1,661		—			34,233
Collateralized mortgage obligations - residential	9,111		95		(2		)	9,204
SBA-guaranteed loan participation certificates	42		—		—			42
	$	76,031	$	1,803	$	(2	)	$	77,832

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. All securities reflected in the preceding table were classified as available-for-sale at March 31, 2013 and December 31, 2012.

The amortized cost and fair values of securities 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.

	March 31, 2013
	Amortized Cost		Fair Value
Due in one year or less	$	22,451	$	22,455
Due after one year through five years	180		192
	22,631		22,647
Equity mutual fund	500		524
Mortgage-backed securities - residential	31,026		32,609
Collateralized mortgage obligations - residential	5,398		5,453
SBA-guaranteed loan participation certificates	40		40
	$	59,595	$	61,273

Securities with unrealized losses not recognized in income are as follows:

	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
March 31, 2013
Mortgage-backed securities - residential	$	2,673	$	(31	)	$	—	$	—		$	2,673	$	(31	)
Collateralized mortgage obligations - residential	—		—			1,142		(8		)	1,142		(8		)
	$	2,673	$	(31	)	$	1,142	$	(8	)	$	3,815	$	(39	)
December 31, 2012
Collateralized mortgage obligations - residential	$	—	$	—		$	1,956	$	(2	)	$	1,956	$	(2	)

The Company evaluates marketable investment securities with significant declines in fair value on a quarterly basis to determine whether they should be considered other-than-temporarily impaired under current accounting guidance, which generally provides that if a marketable security is in an unrealized loss position, whether due to general market conditions or industry or issuer-specific factors, the holder of the securities must assess whether the impairment is other-than-temporary.

A collateralized mortgage obligation that the Company holds in its investment portfolio remained in an unrealized loss position at March 31, 2013, but the unrealized loss was not considered significant under the Company’s impairment testing methodology. In addition, the Company does not intend to sell this security, and it is likely that the Company will not be required to sell the security before its anticipated recovery occurs.

There were no sales of securities for the three months ended March 31, 2013 and 2012.

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Securities - Unrealized Losses (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Mar. 31, 2012
Amortized cost and fair values of securities
Less than 12 Months, Fair Value	$ 2,673
12 Months or More, Fair Value	1,142
Fair Value, Total	3,815
Unrealized loss of securities
Less than 12 Months, Unrealized Loss	(31)
12 Months or More, Unrealized Loss	(8)
Unrealized Loss, Total	(39)
Mortgage Backed Securities Residential [Member]
Amortized cost and fair values of securities
Less than 12 Months, Fair Value	2,673
12 Months or More, Fair Value	0
Fair Value, Total	2,673
Unrealized loss of securities
12 Months or More, Unrealized Loss	0
Unrealized Loss, Total	(31)
Residential Mortgage Backed Securities [Member]
Unrealized loss of securities
Less than 12 Months, Unrealized Loss	(31)
Collateralized mortgage obligations - residential [Member]
Amortized cost and fair values of securities
Less than 12 Months, Fair Value	0	0
12 Months or More, Fair Value	1,142	1,956
Fair Value, Total	1,142	1,956
Unrealized loss of securities
Less than 12 Months, Unrealized Loss	0	0
12 Months or More, Unrealized Loss	(8)	(2)
Unrealized Loss, Total	$ (8)	$ (2)

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Loss Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Earnings Per Share, Basic and Diluted [Abstract]
Net loss available to common stockholders	$ 678	$ 2,337
Average common shares outstanding (shares)	21,072,966	21,072,966
Less:
Unvested restricted stock shares (shares)	0	4,334
Weighted average common shares outstanding (shares)	19,964,028	19,835,273
Unearned Employee Stock Ownership Plan shares	(1,108,938)	(1,233,359)
Add - Net effect of dilutive stock options and unvested restricted stock	0	807
Weighted average diluted common shares outstanding (shares)	19,964,028	19,836,080
Basic loss per common share (usd per share)	$ 0.03	$ 0.12
Diluted earnings (loss) per common share (usd per share)	$ 0.03	$ 0.12
Number of anti-dilutive stock options excluded from the diluted earnings per share calculation (shares)	0	2,055,553

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Loss Per Share (Tables)

3 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

Reconciliation of Basic and Diluted Earnings Per Share

	For the Three Months Ended March 31,
	2013			2012
Net income available to common stockholders	$	678		$	2,337
Average common shares outstanding	21,072,966			21,072,966
Less:
Unearned ESOP shares	(1,108,938		)	(1,233,359		)
Unvested restricted stock shares	—			(4,334		)
Weighted average common shares outstanding	19,964,028			19,835,273
Add - Net effect of dilutive stock options and unvested restricted stock	—			807
Weighted average dilutive common shares outstanding	19,964,028			19,836,080
Basic earnings per common share	$	0.03		$	0.12
Diluted earnings per common share	$	0.03		$	0.12
Number of antidilutive stock options excluded from the diluted earnings per share calculation	—			2,055,553
Weighted average exercise price of anti-dilutive option shares	$	—		$	16.53

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Fair Value (Notes)

3 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

• Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

• Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

• Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

Securities: The fair values of marketable equity securities are generally determined by quoted prices, in active markets, for each specific security (Level 1). If Level 1 measurement inputs are not available for a marketable equity security, we determine its fair value based on the quoted price of a similar security traded in an active market (Level 2). The fair values of debt securities are generally determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2).

Loans Held for Sale: Loans held for sale are carried at the lower of cost or fair value, which is evaluated on a pool-level basis. The fair value of loans held for sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan or other observable market data, such as outstanding commitments from third party investors (Level 2).

Impaired Loans: At the time a loan is considered impaired, management measures impairment in accordance with ASC Topic 310. The fair value of impaired loans is estimated using one of several methods, including collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. Impaired loans carried at fair value generally require a partial charge off and a specific valuation allowance for loan losses. For collateral dependent loans, fair value is commonly based on recent real estate appraisals. These real estate appraisals may include up to three approaches to value: the sales comparison approach, the income approach (for income-producing property) and the cost approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available, if applicable. Such adjustments may be significant and typically result in a Level 3 classification of the inputs for determining fair value. In addition, a discount is typically applied to account for sales and holding expenses. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly. The method utilized to estimate the fair value of loans does not necessarily represent an exit price.

Other Real Estate Owned: Assets acquired through foreclosure or transfers in lieu of foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals. Although the fair value of the property normally will be based on an appraisal (or other evaluation), the valuation should be consistent with the price that a market participant will pay to purchase the property at the measurement date. Circumstances may exist that indicate that the appraised value is not an accurate measurement of the property's current fair value. Examples of such circumstances include changed economic conditions since the last appraisal, stale appraisals, or imprecision and subjectivity in the appraisal process (i.e., actual sales for less than the appraised amount). Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Mortgage Servicing Rights: On a quarterly basis, loan servicing rights are evaluated for impairment based upon the fair value of the rights as compared to carrying amount. The fair values of mortgage servicing rights are based on a valuation model that calculates the present value of estimated net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income. The Company is able to compare the valuation model inputs and results to widely available published industry data for reasonableness (Level 3).

The following table sets forth the Company’s financial assets that were accounted for at fair value and are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value
March 31, 2013
Securities:
Certificates of deposit	$	—	$	22,281	$	—	$	22,281
Municipal securities	—		366		—		366
Equity mutual fund	524		—		—		524
Mortgage-backed securities – residential	—		32,609		—		32,609
Collateralized mortgage obligations – residential	—		5,453		—		5,453
SBA-guaranteed loan participation certificates	—		40		—		40
	$	524	$	60,749	$	—	$	61,273
December 31, 2012
Securities:
Certificates of deposit	$	—	$	33,456	$	—	$	33,456
Municipal securities	—		369		—		369
Equity mutual fund	528		—		—		528
Mortgage-backed securities - residential	—		34,233		—		34,233
Collateralized mortgage obligations – residential	—		9,204		—		9,204
SBA-guaranteed loan participation certificates	—		42		—		42
	$	528	$	77,304	$	—	$	77,832

The following table sets forth the Company’s assets that were measured at fair value on a non-recurring basis:

	Fair Value Measurement Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value
March 31, 2013
Impaired loans:
One–to–four family residential real estate loans	$	—	$	—	$	186	$	186
Multi-family mortgage loans	—		—		2,999		2,999
Nonresidential real estate loans	—		—		3,014		3,014
Construction and land loans	—		—		2,150		2,150
Commercial loans	—		—		750		750
	$	—	$	—	$	9,099	$	9,099
Other real estate owned:
One–to–four family residential real estate	$	—	$	—	$	1,720	$	1,720
Multi-family mortgage	—		—		—		—
Nonresidential real estate	—		—		3,268		3,268
Land	—		—		3,100		3,100
	$	—	$	—	$	8,088	$	8,088
Mortgage servicing rights	$	—	$	—	$	211	$	211
December 31, 2012
Impaired loans:
One–to–four family residential real estate loans	$	—	$	—	$	410	$	410
Multi-family mortgage loans	—		—		1,932		1,932
Nonresidential real estate loans	—		—		3,110		3,110
Construction and land loans	—		—		2,840		2,840
Commercial loans	—		—		181		181
	$	—	$	—	$	8,473	$	8,473
Other real estate owned:
One–to–four family residential real estate	$	—	$	—	$	2,080	$	2,080
Multi-family mortgage	—		—		720		720
Nonresidential real estate	—		—		3,966		3,966
Land	—		—		3,592		3,592
	$	—	$	—	$	10,358	$	10,358
Mortgage servicing rights	$	—	$	—	$	208	$	208

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral–dependent loans, had a carrying amount of $28.5 million, with a valuation allowance of $1.5 million at March 31, 2013, compared to a carrying amount of $28.4 million and a valuation allowance of $1.7 million at December 31, 2012, resulting in a decrease in the provision for loan losses of $163,000 for three months ended March 31, 2013.

OREO, which is carried at the lower of cost or fair value less costs to sell, had a carrying value of $8.1 million at March 31, 2013, which included valuation adjustments of $1.3 million, compared to $10.4 million at December 31, 2012, which included valuation adjustments of $1.2 million, resulting in an increase in the valuation adjustments of $89,000, reduced by sales for the three months ended March 31, 2013.

Mortgage servicing rights, which are carried at lower of cost or fair value, had a carrying amount of $1.0 million at March 31, 2013, of which $757,000 related to fixed rate loans and $256,000 related to adjustable rate loans. Mortgage servicing rights had a carrying amount of $1.0 million at December 31, 2012, of which $756,000 related to fixed rate loans and $264,000 related to adjustable rate loans. A pre–tax recovery of $26,000 on our fixed rate mortgage servicing rights portfolio was included in noninterest income for the three months ended March 31, 2013, compared to a $13,000 provision for the same period in 2012.

The following table presents quantitative information, based on certain empirical data with respect to Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at March 31, 2013:

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired loans:
One-to-four family residential real estate loans	$	186	Sales comparison	Discount applied to valuation	6%-90% (67%)
Multi-family mortgage loans	2,999		Sales comparison	Comparison between sales and income approaches	2%-95% (47%)
			Income approach	Cap Rate	6.2% to 11.8% (7.65%)
Nonresidential real estate loans	3,014		Sales comparison	Comparison between sales and income approaches	6%-99% (63%)
			Income approach	Cap Rate	8.5%-10.3% (8.93%)
Construction and land loans	2,150		Sales comparison	Discount applied to valuation	10%-29% (28%)
Commercial loans	750		Sales comparison	Discount applied to valuation	0%-11% (58%)
Impaired loans	$	9,099
Other real estate owned:
One-to-four family residential real estate	$	1,720	Sales comparison	Discount applied to valuation	7%-77% (18%)
Nonresidential real estate	3,268		Sales comparison	Comparison between sales and income approaches	7%-30% (24%)
Land	3,100		Sales comparison	Discount applied to valuation	7%-21% (10%)
Other real estate owned	$	8,088
Mortgage servicing rights	$	211	Third party valuation	Present value of future servicing income based on prepayment speeds	12.3 % - 25.7% (17.16%)
			Third party valuation	Present value of future servicing income based on default rates	12%

The carrying amount and estimated fair value of financial instruments is as follows:

				Fair Value Measurements at March 31, 2013 Using:
	Carrying Amount			Level 1		Level 2			Level 3		Total
Financial assets
Cash and cash equivalents	$	311,128		$	17,742	$	293,386		$	—	$	311,128
Securities	61,273			524		60,749			—		61,273
Loans held-for-sale	55			—		55			—		55
Loans receivable, net of allowance for loan losses	1,004,404			—		964,073			9,099		973,172
FHLBC stock	7,566			—		—			—		N/A
Accrued interest receivable	3,951			—		3,951			—		3,951
Financial liabilities											—
Noninterest-bearing demand deposits	$	(131,856	)	$	—	$	(131,856	)	$	—	$	(131,856	)
Savings deposits	(148,184		)	—		(148,184		)	—		(148,184		)
NOW and money market accounts	(693,650		)	—		(693,650		)	—		(693,650		)
Certificates of deposit	(297,860		)	—		(299,298		)	—		(299,298		)
Borrowings	(2,740		)	—		(2,777		)	—		(2,777		)
Accrued interest payable	(137		)	—		(137		)	—		(137		)

				Fair Value Measurements at  December 31, 2012 Using:
	Carrying Amount			Level 1		Level 2			Level 3		Total
Financial assets
Cash and cash equivalents	$	275,764		$	20,361	$	255,403		$	—	$	275,764
Securities	77,832			528		77,304			—		77,832
Loans held-for-sale	2,166			—		2,166			—		2,166
Loans receivable, net of allowance for loan losses	1,030,465			—		999,578			8,473		1,008,051
FHLBC stock	8,412			—		—			—		N/A
Accrued interest receivable	38,251			—		38,251			—		38,251
Financial liabilities
Noninterest-bearing demand deposits	$	(134,597	)	$	—	$	(134,597	)	$	—	$	(134,597	)
Savings deposits	(144,726		)	—		(144,726		)	—		(144,726		)
NOW and money market accounts	(697,775		)	—		(697,775		)	—		(697,775		)
Certificates of deposit	(305,253		)	—		(306,859		)	—		(306,859		)
Borrowings	(5,567		)	—		(5,608		)	—		(5,608		)
Accrued interest payable	(157		)	—		(157		)	—		(157		)

For purposes of the above, the following assumptions were used:

Cash and Cash Equivalents: The estimated fair values for cash and cash equivalents are based on their carrying value due to the short-term nature of these assets.

Loans: The estimated fair value for loans has been determined by calculating the present value of future cash flows based on the current rate the Company would charge for similar loans with similar maturities, applied for an estimated time period until the loan is assumed to be repriced or repaid. The estimated fair values of loans held-for-sale are based on quoted market prices.

FHLBC Stock: It is not practicable to determine the fair value of FHLBC stock due to the restrictions placed on its transferability.

Deposit Liabilities: The estimated fair value for certificates of deposit has been determined by calculating the present value of future cash flows based on estimates of rates the Company would pay on such deposits, applied for the time period until maturity. The estimated fair values of noninterest-bearing demand, NOW, money market, and savings deposits are assumed to approximate their carrying values as management establishes rates on these deposits at a level that approximates the local market area. Additionally, these deposits can be withdrawn on demand.

Borrowings: The estimated fair values of advances from the FHLBC and notes payable are based on current market rates for similar financing. The estimated fair value of securities sold under agreements to repurchase is assumed to equal its carrying value due to the short-term nature of the liability.

Accrued Interest: The estimated fair values of accrued interest receivable and payable are assumed to equal their carrying value.

Off-Balance-Sheet Instruments: Off-balance-sheet items consist principally of unfunded loan commitments, standby letters of credit, and unused lines of credit. The estimated fair values of unfunded loan commitments, standby letters of credit, and unused lines of credit are not material.

While the above estimates are based on management’s judgment of the most appropriate factors, as of the balance sheet date, there is no assurance that the estimated fair values would have been realized if the assets were disposed of or the liabilities settled at that date, since market values may differ depending on the various circumstances. The estimated fair values would also not apply to subsequent dates.

In addition, other assets and liabilities that are not financial instruments, such as premises and equipment, are not included in the above disclosures.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation: BankFinancial Corporation, a Maryland corporation headquartered in Burr Ridge, Illinois (the “Company”), is the owner of all of the issued and outstanding capital stock of BankFinancial, F.S.B. (the “Bank”).

Principles of Consolidation

.

Use of Estimates

.

Cash Flows

.

Securities

.

Federal Home Loan Bank Stock

.

Loans Held-for-Sale

.

Loans And Loan Income

.

Impaired Loans

.

Purchased Impaired Loans

.

Troubled Debt Restructurings

.

Allowance for Loan Losses

.

Uncollected Interest Policy

Except for purchased impaired loans, when a loan is on non-accrual status and the ultimate collectability of the total principal of an impaired loan is in doubt, all payments are applied to principal under the cost recovery method. Alternatively, when a loan is on non-accrual status but there is doubt concerning only the ultimate collectability of interest, contractual interest is credited to interest income only when received, under the cash basis method pursuant to the provisions of FASB ASC 310–10, as applicable. In all cases, the average balances are calculated based on the month–end balances of the financing receivables within the period reported pursuant to the provisions of FASB ASC 310–10, as applicable.

Mortgage Servicing Rights

.

Other Real Estate Owned

.

Premises and Equipment

.

Goodwill and Other Intangible Assets

.

Bank Owned Life Insurance

.

Long-Term Assets

.

Loan Commitments and Related Financial Instruments

.

Income Taxes

.

Retirement Plans

.

Employee Stock Ownership Plan (ESOP)

.

Earnings (Loss) Per Common Share

.

Loss Contingencies

.

Restrictions on Cash

.

Fair Value of Financial Instruments

.

Comprehensive Income (Loss)

.

Stock-based Compensation

.

Transfers of Financial Assets

.

Operating Segments

.

Reclassifications

.

Recent Accounting Pronouncements

.

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Securities (Tables)

3 Months Ended

Mar. 31, 2013

Investments, Debt and Equity Securities [Abstract]

Unrealized gains and losses recognized in accumulated other comprehensive income (loss)

he 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
March 31, 2013
Certificates of deposit	$	22,281	$	—	$	—		$	22,281
Municipal securities	350		16		—			366
Equity mutual fund	500		24		—			524
Mortgage-backed securities - residential	31,026		1,614		(31		)	32,609
Collateralized mortgage obligations - residential	5,398		63		(8		)	5,453
SBA-guaranteed loan participation certificates	40		—		—			40
	$	59,595	$	1,717	$	(39	)	$	61,273
December 31, 2012
Certificates of deposit	$	33,456	$	—	$	—		$	33,456
Municipal securities	350		19		—			369
Equity mutual fund	500		28		—			528
Mortgage-backed securities - residential	32,572		1,661		—			34,233
Collateralized mortgage obligations - residential	9,111		95		(2		)	9,204
SBA-guaranteed loan participation certificates	42		—		—			42
	$	76,031	$	1,803	$	(2	)	$	77,832

Amortized cost and fair values of securities

The amortized cost and fair values of securities 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.

	March 31, 2013
	Amortized Cost		Fair Value
Due in one year or less	$	22,451	$	22,455
Due after one year through five years	180		192
	22,631		22,647
Equity mutual fund	500		524
Mortgage-backed securities - residential	31,026		32,609
Collateralized mortgage obligations - residential	5,398		5,453
SBA-guaranteed loan participation certificates	40		40
	$	59,595	$	61,273

Securities with unrealized losses

Securities with unrealized losses not recognized in income are as follows:

	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
March 31, 2013
Mortgage-backed securities - residential	$	2,673	$	(31	)	$	—	$	—		$	2,673	$	(31	)
Collateralized mortgage obligations - residential	—		—			1,142		(8		)	1,142		(8		)
	$	2,673	$	(31	)	$	1,142	$	(8	)	$	3,815	$	(39	)
December 31, 2012
Collateralized mortgage obligations - residential	$	—	$	—		$	1,956	$	(2	)	$	1,956	$	(2	)

XML

Loans Receivable - Aging of Recorded Investments (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013		Dec. 31, 2012
Recorded investment in past due purchased impaired loans
Recorded Investment, 30 to 59 Days Past Due	$ 6,786	[1]	$ 11,633	[2]
Recorded Investment, 60 to 89 Days Past Due	1,712	[1]	6,105	[2]
Recorded Investment, 90 Days or Greater Past Due	22,752		14,288
Recorded Investment, Total Past Due	31,250		32,026
Recorded Investment, Loans Not Past Due	982,551		1,005,827
Recorded Investment, Total	3,984		3,989
One-to-four family residential real estate loans - non-owner occupied loans [Member]
Recorded investment in past due purchased impaired loans
Recorded Investment, 30 to 59 Days Past Due	504		855
Recorded Investment, 60 to 89 Days Past Due	198		579
Recorded Investment, 90 Days or Greater Past Due	811		249
Recorded Investment, Total Past Due	1,513		1,683
Recorded Investment, Loans Not Past Due	54,569		55,906
Multi-family mortgage loans [Member]
Recorded investment in past due purchased impaired loans
Recorded Investment, 30 to 59 Days Past Due	2,145		5,393
Recorded Investment, 60 to 89 Days Past Due	1,208		3,049
Recorded Investment, 90 Days or Greater Past Due	9,762		3,218
Recorded Investment, Total Past Due	13,115		11,660
Recorded Investment, Loans Not Past Due	276,979		291,103
Recorded Investment, Total	0		0
Construction loans [Member]
Recorded investment in past due purchased impaired loans
Recorded Investment, Loans Not Past Due	47
Land loans [Member]
Recorded investment in past due purchased impaired loans
Recorded Investment, 30 to 59 Days Past Due	0		702
Recorded Investment, 60 to 89 Days Past Due	0		1,220
Recorded Investment, 90 Days or Greater Past Due	1,375		630
Recorded Investment, Total Past Due	1,375		2,552
Recorded Investment, Loans Not Past Due	4,454		4,956
Recorded Investment, Total	1,021		1,021
Commercial loans - Secured [Member]
Recorded investment in past due purchased impaired loans
Recorded Investment, 30 to 59 Days Past Due	142		659
Recorded Investment, 60 to 89 Days Past Due	0		3
Recorded Investment, 90 Days or Greater Past Due	830		204
Recorded Investment, Total Past Due	972		866
Recorded Investment, Loans Not Past Due	18,168		22,336
Commercial loans - Unsecured [Member]
Recorded investment in past due purchased impaired loans
Recorded Investment, 30 to 59 Days Past Due	21		81
Recorded Investment, 60 to 89 Days Past Due	0		78
Recorded Investment, 90 Days or Greater Past Due	52		16
Recorded Investment, Total Past Due	73		175
Recorded Investment, Loans Not Past Due	5,549		5,774
Purchased Impaired Loans [Member]
Recorded investment in past due purchased impaired loans
Recorded Investment, 30 to 59 Days Past Due	0		327
Recorded Investment, 60 to 89 Days Past Due	0		0
Recorded Investment, 90 Days or Greater Past Due	2,554		2,219
Recorded Investment, Total Past Due	2,554		2,546
Recorded Investment, Loans Not Past Due	1,430		1,443
Recorded Investment, Total	3,984		3,989
Purchased Impaired Loans [Member] | One-to-four family residential real estate loans - non-owner occupied loans [Member]
Recorded investment in past due purchased impaired loans
Recorded Investment, 30 to 59 Days Past Due	0		327
Recorded Investment, 60 to 89 Days Past Due	0		0
Recorded Investment, 90 Days or Greater Past Due	388		53
Recorded Investment, Total Past Due	388		380
Recorded Investment, Loans Not Past Due	0		0
Recorded Investment, Total	388		380
Purchased Impaired Loans [Member] | Nonresidential real estate loans [Member]
Recorded investment in past due purchased impaired loans
Recorded Investment, 30 to 59 Days Past Due	0		0
Recorded Investment, 60 to 89 Days Past Due	0		0
Recorded Investment, 90 Days or Greater Past Due	1,124		1,125
Recorded Investment, Total Past Due	1,124		1,125
Recorded Investment, Loans Not Past Due	1,430		1,443
Recorded Investment, Total	2,554		2,568
Purchased Impaired Loans [Member] | Land loans [Member]
Recorded investment in past due purchased impaired loans
Recorded Investment, 30 to 59 Days Past Due	0		0
Recorded Investment, 60 to 89 Days Past Due	0		0
Recorded Investment, 90 Days or Greater Past Due	1,021		1,021
Recorded Investment, Total Past Due	1,021		1,021
Recorded Investment, Loans Not Past Due	0		0
Recorded Investment, Total	1,021		1,021
Purchased Impaired Loans [Member] | Commercial loans - Secured [Member]
Recorded investment in past due purchased impaired loans
Recorded Investment, 30 to 59 Days Past Due	0		0
Recorded Investment, 60 to 89 Days Past Due	0		0
Recorded Investment, 90 Days or Greater Past Due	21		20
Recorded Investment, Total Past Due	21		20
Recorded Investment, Loans Not Past Due	0		0
Recorded Investment, Total	$ 21		$ 20

[1]

[2] 30-59 DaysPast Due 60-89 DaysPast Due 90 Days orGreaterPast Due Total PastDue Loans NotPast Due TotalPurchased impaired loans One-to-four family residential real estate loans - non-owner occupied$327 $— $53 $380$— $380Nonresidential real estate loans— — 1,125 1,1251,443 2,568Land loans— — 1,021 1,021— 1,021Commercial loans – secured— — 20 20— 20 $327 $— $2,219 $2,546 $1,443 $3,989

XML

Securities - Fair Value of Securites (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012
Unrealized gains and losses recognized in accumulated other comprehensive income (loss)
Amortized Cost	$ 59,595		$ 76,031
Gross Unrealized Gains	1,717		1,803
Gross Unrealized Losses	(39)		(2)
Total Fair value	61,273		77,832
Certificates of deposit [Member]
Unrealized gains and losses recognized in accumulated other comprehensive income (loss)
Amortized Cost	22,281		33,456
Gross Unrealized Gains	0		0
Gross Unrealized Losses	0		0
Total Fair value	22,281	33,456
Municipal securities [Member]
Unrealized gains and losses recognized in accumulated other comprehensive income (loss)
Amortized Cost	350		350
Gross Unrealized Gains	16		19
Gross Unrealized Losses	0		0
Total Fair value	366	369
Equity mutual fund [Member]
Unrealized gains and losses recognized in accumulated other comprehensive income (loss)
Amortized Cost	500		500
Gross Unrealized Gains	24		28
Gross Unrealized Losses	0		0
Total Fair value	524
Mortgage - backed securities - residential [Member]
Unrealized gains and losses recognized in accumulated other comprehensive income (loss)
Amortized Cost	31,026		32,572
Gross Unrealized Gains	1,614		1,661
Gross Unrealized Losses	(31)		0
Total Fair value	32,609	34,233
Collateralized mortgage obligations - residential [Member]
Unrealized gains and losses recognized in accumulated other comprehensive income (loss)
Amortized Cost	5,398		9,111
Gross Unrealized Gains	63		95
Gross Unrealized Losses	(8)		(2)
Total Fair value	5,453	9,204
SBA-guaranteed loan participation certificates [Member]
Unrealized gains and losses recognized in accumulated other comprehensive income (loss)
Amortized Cost	40		42
Gross Unrealized Gains	0		0
Gross Unrealized Losses	0		0
Total Fair value	$ 40	$ 42

XML

Loans Receivable - Allowance for Loan Losses (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Dec. 31, 2010
Allowance for loan losses and the loans receivable by portfolio segment
Individually evaluated for impairment	$ 1,430	$ 1,584
Purchased impaired loans	101	110
Collectively evaluated for impairment	15,922	16,341
Allowance for loan losses	17,453	18,035	31,638	31,726
Individually evaluated for impairment	24,545	24,441
Purchased impaired loans	3,984	3,989
Collectively evaluated for impairment	992,597	1,019,325
Total loans	1,021,126	1,047,755
Net deferred loan origination costs	731	745
Loans, net	1,004,404	1,030,465
One-to-four family residential real estate loans [Member]
Allowance for loan losses and the loans receivable by portfolio segment
Individually evaluated for impairment	116	137
Purchased impaired loans	3	5
Collectively evaluated for impairment	4,332	4,584
Allowance for loan losses	4,451	4,726
Individually evaluated for impairment	4,961	5,256
Purchased impaired loans	388	380
Collectively evaluated for impairment	204,191	212,960
Total loans	209,540	218,596
Multi-family mortgage loans [Member]
Allowance for loan losses and the loans receivable by portfolio segment
Individually evaluated for impairment	747	729
Purchased impaired loans	0	0
Collectively evaluated for impairment	3,724	3,851
Allowance for loan losses	4,471	4,580
Individually evaluated for impairment	11,243	4,801
Purchased impaired loans	0	0
Collectively evaluated for impairment	327,259	347,218
Total loans	338,502	352,019
Nonresidential real estate loans [Member]
Allowance for loan losses and the loans receivable by portfolio segment
Individually evaluated for impairment	351	401
Purchased impaired loans	24	8
Collectively evaluated for impairment	5,386	5,136
Allowance for loan losses	5,761	5,545
Individually evaluated for impairment	5,883	11,918
Purchased impaired loans	2,554	2,568
Collectively evaluated for impairment	252,770	250,186
Total loans	261,207	264,672
Construction and land loans [Member]
Allowance for loan losses and the loans receivable by portfolio segment
Individually evaluated for impairment	135	294
Purchased impaired loans	74	96
Collectively evaluated for impairment	631	641
Allowance for loan losses	840	1,031
Individually evaluated for impairment	1,576	2,210
Purchased impaired loans	1,021	1,021
Collectively evaluated for impairment	4,336	5,321
Total loans	6,933	8,552
Commercial loans [Member]
Allowance for loan losses and the loans receivable by portfolio segment
Individually evaluated for impairment	81	23
Purchased impaired loans	0	1
Collectively evaluated for impairment	1,149	1,300
Allowance for loan losses	1,230	1,324
Individually evaluated for impairment	882	256
Purchased impaired loans	21	20
Collectively evaluated for impairment	54,459	61,112
Total loans	55,362	61,388
Commercial leases [Member]
Allowance for loan losses and the loans receivable by portfolio segment
Individually evaluated for impairment	0	0
Purchased impaired loans	0	0
Collectively evaluated for impairment	604	666
Allowance for loan losses	604	666
Individually evaluated for impairment	0	0
Purchased impaired loans	0	0
Collectively evaluated for impairment	147,168	139,783
Total loans	147,168	139,783
Consumer loans [Member]
Allowance for loan losses and the loans receivable by portfolio segment
Individually evaluated for impairment	0	0
Purchased impaired loans	0	0
Collectively evaluated for impairment	96	163
Allowance for loan losses	96	163
Individually evaluated for impairment	0	0
Purchased impaired loans	0	0
Collectively evaluated for impairment	2,414	2,745
Total loans	$ 2,414	$ 2,745

XML

Fair Value - Assets Measured at Fair Value on a Non-Recurring Basis (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	$ 9,099
Fair Value, Other real estate owned	8,088
One-to-four family residential real estate loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	186
Fair Value, Other real estate owned	1,720
Multi-family mortgage loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	2,999
Nonresidential real estate loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	3,014
Fair Value, Other real estate owned	3,268
Construction and land loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	2,150
Commercial loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	750
Land loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Other real estate owned	3,100
Nonrecurring [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	9,099	8,473
Fair Value, Other real estate owned	8,088	10,358
Mortgage servicing rights	211	208
Nonrecurring [Member] | One-to-four family residential real estate loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	186	410
Fair Value, Other real estate owned	1,720	2,080
Nonrecurring [Member] | Multi-family mortgage loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	2,999	1,932
Fair Value, Other real estate owned	0	720
Nonrecurring [Member] | Nonresidential real estate loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	3,014	3,110
Fair Value, Other real estate owned	3,268	3,966
Nonrecurring [Member] | Construction and land loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	2,150	2,840
Nonrecurring [Member] | Commercial loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	750	181
Nonrecurring [Member] | Land loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Other real estate owned	3,100	3,592
Nonrecurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	0	0
Fair Value, Other real estate owned	0	0
Mortgage servicing rights	0	0
Nonrecurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | One-to-four family residential real estate loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	0	0
Fair Value, Other real estate owned	0	0
Nonrecurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Multi-family mortgage loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	0	0
Fair Value, Other real estate owned	0	0
Nonrecurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Nonresidential real estate loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	0	0
Fair Value, Other real estate owned	0	0
Nonrecurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Construction and land loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	0	0
Nonrecurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Commercial loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	0	0
Nonrecurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Land loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Other real estate owned	0	0
Nonrecurring [Member] | Significant Observable Inputs (Level 2) [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	0	0
Fair Value, Other real estate owned	0	0
Mortgage servicing rights	0	0
Nonrecurring [Member] | Significant Observable Inputs (Level 2) [Member] | One-to-four family residential real estate loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	0	0
Fair Value, Other real estate owned	0	0
Nonrecurring [Member] | Significant Observable Inputs (Level 2) [Member] | Multi-family mortgage loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	0	0
Fair Value, Other real estate owned	0	0
Nonrecurring [Member] | Significant Observable Inputs (Level 2) [Member] | Nonresidential real estate loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	0	0
Fair Value, Other real estate owned	0	0
Nonrecurring [Member] | Significant Observable Inputs (Level 2) [Member] | Construction and land loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	0	0
Nonrecurring [Member] | Significant Observable Inputs (Level 2) [Member] | Commercial loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	0	0
Nonrecurring [Member] | Significant Observable Inputs (Level 2) [Member] | Land loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Other real estate owned	0	0
Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	9,099	8,473
Fair Value, Other real estate owned	8,088	10,358
Mortgage servicing rights	211	208
Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | One-to-four family residential real estate loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	186	410
Fair Value, Other real estate owned	1,720	2,080
Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Multi-family mortgage loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	2,999	1,932
Fair Value, Other real estate owned	0	720
Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Nonresidential real estate loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	3,014	3,110
Fair Value, Other real estate owned	3,268	3,966
Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Construction and land loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	2,150	2,840
Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Commercial loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Impaired loans	750	181
Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Land loans [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value, Other real estate owned	$ 3,100	$ 3,592

XML

Consolidated Statements Comprehensive Loss (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Statement of Other Comprehensive Income [Abstract]
Net income (loss)	$ 678	$ 2,337
Unrealized holding gain (loss) arising during the period	(124)	(55)
Tax effect	0	0
Other comprehensive loss, net of tax effect	(124)	(55)
Comprehensive loss	$ 554	$ 2,282

XML

Loss Per Share (Notes)

3 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

Loss 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, exclusive of unearned ESOP shares and unvested restricted stock shares. Stock options and restricted stock are regarded as potential common stock and are considered in the diluted earnings per share calculations to the extent that they would have a dilutive effect if converted to common stock.

	For the Three Months Ended March 31,
	2013			2012
Net income available to common stockholders	$	678		$	2,337
Average common shares outstanding	21,072,966			21,072,966
Less:
Unearned ESOP shares	(1,108,938		)	(1,233,359		)
Unvested restricted stock shares	—			(4,334		)
Weighted average common shares outstanding	19,964,028			19,835,273
Add - Net effect of dilutive stock options and unvested restricted stock	—			807
Weighted average dilutive common shares outstanding	19,964,028			19,836,080
Basic earnings per common share	$	0.03		$	0.12
Diluted earnings per common share	$	0.03		$	0.12
Number of antidilutive stock options excluded from the diluted earnings per share calculation	—			2,055,553
Weighted average exercise price of anti-dilutive option shares	$	—		$	16.53

XML

Loans Receivable - Activity in the Allowance for Loan Losses (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2010
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	$ 18,035		$ 31,726
Loans charged off	(1,630)	(1,856)
Recoveries	326	772
Net charge-off	(1,304)	(1,084)
Provision for loan losses	722	996
Ending balance	17,453	31,638	31,726
One-to-four family residential real estate loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	4,726
Loans charged off	(369)	(672)
Recoveries	242	111
Ending balance	4,451
Multi-family mortgage loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	4,580
Loans charged off	(236)	(554)
Recoveries	57	384
Ending balance	4,471
Nonresidential real estate loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	5,545
Loans charged off	(79)	(433)
Recoveries	19	31
Ending balance	5,761
Construction and land loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	1,031
Loans charged off	(927)	(47)
Recoveries	2	184
Ending balance	840
Commercial loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	1,324
Loans charged off	(19)	(138)
Recoveries	5	57
Ending balance	1,230
Commercial leases [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	666
Recoveries	0	0
Ending balance	604
Consumer loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	163
Loans charged off	0	(12)
Recoveries	1	5
Ending balance	$ 96

XML

Loans Receivable - Credit Quality Indicators (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Financing Receivable Credit Quality Indicators
Total loans	$ 1,021,126	$ 1,047,755
One-to-four family residential real estate loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	209,540	218,596
Multi-family mortgage loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	338,502	352,019
Consumer loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	2,414	2,745
Pass [Member]
Financing Receivable Credit Quality Indicators
Total loans	897,808	924,953
Pass [Member] | One-to-four family residential real estate loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	147,526	152,711
Pass [Member] | One-to-four family residential real estate loans - non-owner occupied loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	52,066	51,849
Pass [Member] | Multi-family mortgage loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	254,877	275,338
Pass [Member] | Wholesale commercial lending [Member]
Financing Receivable Credit Quality Indicators
Total loans	43,876	44,074
Pass [Member] | Nonresidential real estate loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	197,355	199,802
Pass [Member] | Construction loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	46	0
Pass [Member] | Land loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	2,582	2,769
Pass [Member] | Commercial loans - Secured [Member]
Financing Receivable Credit Quality Indicators
Total loans	15,496	19,579
Pass [Member] | Commercial loans - Unsecured [Member]
Financing Receivable Credit Quality Indicators
Total loans	3,776	4,061
Pass [Member] | Commercial Loans - Municipal loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	4,751	4,751
Pass [Member] | Commercial Loans - Warehouse Lines [Member]
Financing Receivable Credit Quality Indicators
Total loans	1,812	2,971
Pass [Member] | Commercial Loans - Health Care [Member]
Financing Receivable Credit Quality Indicators
Total loans	17,238	17,566
Pass [Member] | Commercial loans - other [Member]
Financing Receivable Credit Quality Indicators
Total loans	6,837	6,957
Pass [Member] | Commercial Leases - Investment Rated [Member]
Financing Receivable Credit Quality Indicators
Total loans	107,491	102,101
Pass [Member] | Commercial Leases - Below Investment Grade [Member]
Financing Receivable Credit Quality Indicators
Total loans	9,569	9,205
Pass [Member] | Commercial Leases - Non Rated [Member]
Financing Receivable Credit Quality Indicators
Total loans	25,533	25,466
Pass [Member] | Commercial Leases - Lease Pools [Member]
Financing Receivable Credit Quality Indicators
Total loans	4,575	3,011
Pass [Member] | Consumer loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	2,402	2,742
Special Mention [Member]
Financing Receivable Credit Quality Indicators
Total loans	57,105	41,422
Special Mention [Member] | One-to-four family residential real estate loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	126	0
Special Mention [Member] | One-to-four family residential real estate loans - non-owner occupied loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	1,439	1,486
Special Mention [Member] | Multi-family mortgage loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	14,879	6,139
Special Mention [Member] | Wholesale commercial lending [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Special Mention [Member] | Nonresidential real estate loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	37,929	30,898
Special Mention [Member] | Construction loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Special Mention [Member] | Land loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	158
Special Mention [Member] | Commercial loans - Secured [Member]
Financing Receivable Credit Quality Indicators
Total loans	2,419	2,418
Special Mention [Member] | Commercial loans - Unsecured [Member]
Financing Receivable Credit Quality Indicators
Total loans	312	323
Special Mention [Member] | Commercial Loans - Municipal loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Special Mention [Member] | Commercial Loans - Warehouse Lines [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Special Mention [Member] | Commercial Loans - Health Care [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Special Mention [Member] | Commercial loans - other [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Special Mention [Member] | Commercial Leases - Investment Rated [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Special Mention [Member] | Commercial Leases - Below Investment Grade [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Special Mention [Member] | Commercial Leases - Non Rated [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Special Mention [Member] | Commercial Leases - Lease Pools [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Special Mention [Member] | Consumer loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	1	0
Substandard [Member]
Financing Receivable Credit Quality Indicators
Total loans	37,618	55,004
Substandard [Member] | One-to-four family residential real estate loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	1,016	1,428
Substandard [Member] | One-to-four family residential real estate loans - non-owner occupied loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	1,967	3,440
Substandard [Member] | Multi-family mortgage loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	11,169	21,128
Substandard [Member] | Wholesale commercial lending [Member]
Financing Receivable Credit Quality Indicators
Total loans	2,766	1,781
Substandard [Member] | Nonresidential real estate loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	17,176	22,345
Substandard [Member] | Construction loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Substandard [Member] | Land loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	1,707	2,394
Substandard [Member] | Commercial loans - Secured [Member]
Financing Receivable Credit Quality Indicators
Total loans	351	988
Substandard [Member] | Commercial loans - Unsecured [Member]
Financing Receivable Credit Quality Indicators
Total loans	1,466	1,497
Substandard [Member] | Commercial Loans - Municipal loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Substandard [Member] | Commercial Loans - Warehouse Lines [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Substandard [Member] | Commercial Loans - Health Care [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Substandard [Member] | Commercial loans - other [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Substandard [Member] | Commercial Leases - Investment Rated [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Substandard [Member] | Commercial Leases - Below Investment Grade [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Substandard [Member] | Commercial Leases - Non Rated [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Substandard [Member] | Commercial Leases - Lease Pools [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Substandard [Member] | Consumer loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	3
Nonaccrual [Member]
Financing Receivable Credit Quality Indicators
Total loans	28,595	26,376
Nonaccrual [Member] | One-to-four family residential real estate loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	4,111	6,158
Nonaccrual [Member] | One-to-four family residential real estate loans - non-owner occupied loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	1,289	1,524
Nonaccrual [Member] | Multi-family mortgage loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	10,935	3,559
Nonaccrual [Member] | Wholesale commercial lending [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Nonaccrual [Member] | Nonresidential real estate loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	8,747	11,627
Nonaccrual [Member] | Construction loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Nonaccrual [Member] | Land loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	2,598	3,231
Nonaccrual [Member] | Commercial loans - Secured [Member]
Financing Receivable Credit Quality Indicators
Total loans	852	225
Nonaccrual [Member] | Commercial loans - Unsecured [Member]
Financing Receivable Credit Quality Indicators
Total loans	52	52
Nonaccrual [Member] | Commercial Loans - Municipal loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Nonaccrual [Member] | Commercial Loans - Warehouse Lines [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Nonaccrual [Member] | Commercial Loans - Health Care [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Nonaccrual [Member] | Commercial loans - other [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Nonaccrual [Member] | Commercial Leases - Investment Rated [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Nonaccrual [Member] | Commercial Leases - Below Investment Grade [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Nonaccrual [Member] | Commercial Leases - Non Rated [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Nonaccrual [Member] | Commercial Leases - Lease Pools [Member]
Financing Receivable Credit Quality Indicators
Total loans	0	0
Nonaccrual [Member] | Consumer loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	11	0
Consumer Credit Score [Member]
Financing Receivable Credit Quality Indicators
Total loans	1,021,126	1,047,755
Consumer Credit Score [Member] | One-to-four family residential real estate loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	152,779	160,297
Consumer Credit Score [Member] | One-to-four family residential real estate loans - non-owner occupied loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	56,761	58,299
Consumer Credit Score [Member] | Multi-family mortgage loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	291,860	306,164
Consumer Credit Score [Member] | Wholesale commercial lending [Member]
Financing Receivable Credit Quality Indicators
Total loans	46,642	45,855
Consumer Credit Score [Member] | Nonresidential real estate loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	261,207	264,672
Consumer Credit Score [Member] | Construction loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	46	0
Consumer Credit Score [Member] | Land loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	6,887	8,552
Consumer Credit Score [Member] | Commercial loans - Secured [Member]
Financing Receivable Credit Quality Indicators
Total loans	19,118	23,210
Consumer Credit Score [Member] | Commercial loans - Unsecured [Member]
Financing Receivable Credit Quality Indicators
Total loans	5,606	5,933
Consumer Credit Score [Member] | Commercial Loans - Municipal loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	4,751	4,751
Consumer Credit Score [Member] | Commercial Loans - Warehouse Lines [Member]
Financing Receivable Credit Quality Indicators
Total loans	1,812	2,971
Consumer Credit Score [Member] | Commercial Loans - Health Care [Member]
Financing Receivable Credit Quality Indicators
Total loans	17,238	17,566
Consumer Credit Score [Member] | Commercial loans - other [Member]
Financing Receivable Credit Quality Indicators
Total loans	6,837	6,957
Consumer Credit Score [Member] | Commercial Leases - Investment Rated [Member]
Financing Receivable Credit Quality Indicators
Total loans	107,491	102,101
Consumer Credit Score [Member] | Commercial Leases - Below Investment Grade [Member]
Financing Receivable Credit Quality Indicators
Total loans	9,569	9,205
Consumer Credit Score [Member] | Commercial Leases - Non Rated [Member]
Financing Receivable Credit Quality Indicators
Total loans	25,533	25,466
Consumer Credit Score [Member] | Commercial Leases - Lease Pools [Member]
Financing Receivable Credit Quality Indicators
Total loans	4,575	3,011
Consumer Credit Score [Member] | Consumer loans [Member]
Financing Receivable Credit Quality Indicators
Total loans	$ 2,414	$ 2,745

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Loss Per Share Weighted Average Exercise Price of Anti Dilutive Stock Options (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted Average Exercise Price of Anti Dilutive Stock Options	$ 0.00	$ 16.53