8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 30, 2017

BANKFINANCIAL CORPORATION

(Exact Name of Registrant as Specified in Charter)

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

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

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

Not Applicable

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

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

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

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

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

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

Item 2.02    Results of Operations and Financial Condition

On January 30, 2017, BankFinancial Corporation (Nasdaq – BFIN) issued a press release announcing the results for the fourth quarter and year ended December 31, 2016 and issued the Fourth Quarter 2016 Quarterly Financial and Statistical Supplement for the latest five quarters. The press release and Quarterly Financial and Statistical Supplement are included as Exhibits 99.1 and 99.2 to this report.

BankFinancial Corporation will review fourth quarter 2016 results in a conference call and webcast for stockholders and analysts on Tuesday, January 31, 2017 at 9:30 a.m. Chicago, Illinois Time.

The conference call may be accessed by calling (844) 413-1780 using participant passcode 60249177. The conference call will be simultaneously webcast at www.bankfinancial.com, “Investor Relations” page. For those persons unable to participate in the conference call, the webcast will be archived through 11:59 p.m. Chicago Time on Friday, February 24, 2017 on our website. BankFinancial Corporation’s Quarterly Financial and Statistical Supplement is scheduled to be available on our website, under the “Investor Relations” section, on January 30, 2017.

Item 7.01. Regulation FD Disclosure

The press release referenced in Item 2.02, above, included certain predictions and other forward looking statements as to the Company’s performance for the years ending December 31, 2016 and 2017.

Item 9.01.    Financial Statements and Exhibits.

(a) Not Applicable.

(b) Not Applicable.

(c) Not Applicable.

(d) Exhibits.

Exhibit No.Description

99.1    Press Release dated January 30, 2017

99.2    Quarterly Financial and Statistical Supplement

SIGNATURES

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

			BANKFINANCIAL CORPORATION
Date:	January 30, 2017	By:	/s/ F. Morgan Gasior
			F. Morgan Gasior
			Chairman of the Board, Chief Executive Officer and President

EXHIBIT INDEX

Exhibit No.Description

99.1    Press Release dated January 30, 2017

99.2    Quarterly Financial and Statistical Supplement

EX-99.1

Exhibit No. 99.1

FOR IMMEDIATE RELEASE

BankFinancial Corporation Reports Financial Results for 2016 and

Will Host Conference Call and Webcast on January 31, 2017

Burr Ridge, Illinois - (January 30, 2017) BankFinancial Corporation (Nasdaq - BFIN) (the “Company”) announced today the Company recorded net income of $2.3 million and basic and dilutive earnings per share of common stock of $0.12 for the fourth quarter ended December 31, 2016.

Total loans increased by $71 million during the fourth quarter due to growth in commercial leases and multi-family loans, which was partially offset by reduced balances in commercial real estate loans and residential loans. Total commercial-related loan balances reached a new record level of $1.2 billion, and now comprise 89.6% of total loans. Loan payoffs increased primarily due to a payoff resulting from the sale of a commercial equipment lessor to another lessor customer at the end of 2016.

In addition to organic commercial loan and lease originations, the Company agreed to acquire a portfolio of investment-grade commercial leases from a competitor exiting the sector. The Company closed $55 million of the portfolio acquisition late in the fourth quarter of 2016, consisting of leases at an average rate of 2.31% and an average duration of approximately 26 months. The Company anticipates closing up to an additional $22 million of the remaining portfolio at a similar rate during the first quarter of 2017. The portfolio acquisition enables the Company to deepen relationships with the commercial equipment lessors and redeploy the rapidly amortizing portfolio proceeds into higher-yielding commercial leases during 2017 and 2018.

Total organic commercial-related loan originations (including commercial line of credit utilization) for the fourth quarter of 2016 were $146.6 million at an average 4.18% rate, compared to an average 3.86% rate for the third quarter of 2016. Combined with the commercial lease portfolio acquisition, total commercial-related loan originations for the quarter were $201.6 million at an average 3.67% rate. Because commercial-related loans have become the dominant part of its lending activities, the Company’s banking subsidiary, BankFinancial, NA, converted to a National Bank charter on November 30, 2016.

To ensure compliance with regulatory limits on commercial loan balances that existed before the national bank charter conversion, and to anticipate loan funding needs, the Company added $50 million of short-term borrowings during the fourth quarter of 2016. This growth in total assets and total liabilities contributed to a temporary dilution of net interest margin and net interest spread for the fourth quarter of 2016. Due to these actions and the timing and nature of the commercial lease portfolio acquisition, the average yield on loans, net interest margin and net interest spread declined for the fourth quarter of 2016.

Noninterest income increased modestly in the fourth quarter due primarily to slightly higher deposit account-related income and trust income. The Company expects to continue to make progress in increasing noninterest income in 2017 through new deposit account product offerings and commercial loan and lease participation or sale revenues related to new loan originations.

Noninterest expense increased modestly in the fourth quarter. Compensation expense increased by $419,000 primarily due to increased ESOP expense and to incentive compensation related to loan growth. Other expenses experienced seasonal fluctuations; however, the trends in noninterest expense remained intact.

Past due and classified loan trends remain favorable. The ratio of nonperforming loans to total loans was 0.25% and the ratio of nonperforming assets to total assets ratio was 0.44% at December 31, 2016. Nonperforming commercial-related loans represented 0.04% of total commercial-related loans. Nonperforming asset expenses decreased by $155,000 due to resolutions of nonperforming loans and assets. The Company continues to focus on proactive portfolio management and resolutions of nonperforming loans and assets to maintain asset quality and reduce nonperforming asset expense to the lowest practicable levels.

The Company's net income for the year 2016 was $7.5 million. Basic earnings per share of common stock were $0.40 and dilutive earnings per share of common stock were $0.39. The Company’s total loans increased by $79 million (6%), and its total commercial-related loans increased by $103 million (10%). The Company increased its commercial / industrial loan and lease portfolio by $111 million, and its multifamily loan portfolio by $37 million, partially offset by a $44 million reduction in its commercial real estate portfolio and a $25 million reduction in residential loans.

The Company’s total core deposits remained stable. The Company’s liquid assets exceeded 12% of total assets. The Company’s capital ratios remained strong with a Tier 1 capital ratio of 12% and a Tier 1 risk-based capital ratio of 16%.

“Our 2016 results reflect the successful execution of key business plan objectives, including accelerating our growth in commercial loans and leases following our conversion to a national bank charter in November, 2016, achieving exceptionally strong asset

quality and improving our overall efficiency. Building on our new capacities, we look forward to further improvements in these very positive trends in 2017,” said F. Morgan Gasior, the Chairman and CEO of the Company. He added that “We remain encouraged by the recent favorable trends in market yields on our commercial loan and lease originations and the ongoing flow of new opportunities at these yield levels.”

The Quarterly Financial and Statistical Supplement will be available today on BankFinancial's website, www.bankfinancial.comon the “Stockholder Information” page, and through the EDGAR database on the SEC's website, www.sec.gov. The Quarterly Financial and Statistical Supplement includes comparative GAAP and non-GAAP performance data and financial measures for the most recent five quarters.

BankFinancial's management will review fourth quarter 2016 results in a conference call and webcast for stockholders and analysts on Tuesday, January 31, 2017 at 9:30 a.m. Chicago, Illinois Time. The conference call may be accessed by calling (844) 413-1780 using participant passcode 60249177. The conference call will be simultaneously webcast at www.bankfinancial.com, “Investor Relations” page. For those unable to participate in the conference call, the webcast will be archived through 11:59 p.m. Chicago Time on Friday, February 24, 2017.

BankFinancial Corporation is the holding company for BankFinancial, NA, a full-service, community-oriented bank providing financial services to individuals, families and businesses through 19 full-service banking offices, located in Cook, DuPage, Lake and Will Counties, Illinois. BankFinancial Corporation's common stock trades on the Nasdaq Global Select Market under the symbol BFIN. Additional information may be found at the company's website, www.bankfinancial.com.

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

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

EX-99.2

Exhibit 99.2

BANKFINANCIAL CORPORATION

FOURTH QUARTER 2016

QUARTERLY FINANCIAL AND STATISTICAL SUPPLEMENT

FOR THE LATEST FIVE QUARTERS

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

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

BANKFINANCIAL CORPORATION

SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA

Latest Five Quarters

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

	2016												2015
	IVQ			IIIQ			IIQ			IQ			IVQ
PERFORMANCE MEASUREMENTS
Return on assets (ratio of net income to average total assets) (1)	0.57		%	0.66		%	0.22		%	0.50		%	0.58		%
Return on equity (ratio of net income to average equity) (1)	4.41			4.86			1.59			3.59			3.96
Net interest rate spread (1)	3.01			3.23			3.21			3.30			3.35
Net interest margin (1)	3.11			3.33			3.31			3.39			3.43
Efficiency ratio	76.23			73.60			79.80			80.98			83.16
Noninterest expense to average total assets (1)	2.59			2.62			2.78			2.89			3.08
Average interest–earning assets to average interest–bearing liabilities	133.71			134.36			136.17			136.26			138.91
Number of full service offices	19			19			19			19			19
Employees (full time equivalents)	246			242			253			255			251
SUMMARY STATEMENT OF FINANCIAL CONDITION
ASSETS
Cash and due from other financial institutions	$	13,053		$	9,499		$	11,509		$	10,238		$	13,192
Interest-bearing deposits in other financial institutions	83,631			91,031			74,048			55,705			46,185
Securities, at fair value	107,212			99,899			105,698			111,386			114,753
Loans receivable, net	1,312,952			1,241,808			1,207,553			1,232,485			1,232,257
Other real estate owned, net	3,895			4,381			5,373			5,629			7,011
Stock in Federal Home Loan Bank and Federal Reserve Bank, at cost	11,650			6,257			6,257			6,257			6,257
Premises and equipment, net	31,413			31,856			32,021			32,308			32,726
Intangible assets	782			911			1,040			1,169			1,305
Bank owned life insurance	22,594			22,538			22,484			22,438			22,387
Deferred taxes	22,411			23,715			25,187			25,641			26,695
Other assets	10,444			8,378			8,661			8,552			9,675
Total assets	$	1,620,037		$	1,540,273		$	1,499,831		$	1,511,808		$	1,512,443
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits	$	1,339,390		$	1,316,695		$	1,268,602		$	1,264,689		$	1,212,919
Borrowings	51,069			1,406			1,469			17,621			64,318
Other liabilities	24,798			18,505			23,053			20,010			22,842
Total liabilities	1,415,257			1,336,606			1,293,124			1,302,320			1,300,079
Stockholders’ equity	204,780			203,667			206,707			209,488			212,364
Total liabilities and stockholders’ equity	$	1,620,037		$	1,540,273		$	1,499,831		$	1,511,808		$	1,512,443

(1)Annualized

Page 2

BANKFINANCIAL CORPORATION

SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA

Latest Five Quarters

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

	2016												2015			For the years ended December 31,
	IVQ			IIIQ			IIQ			IQ			IVQ			2016			2015
SUMMARY STATEMENT OF OPERATIONS
Total interest income	$	12,743		$	12,845		$	12,581		$	12,759		$	12,411		$	50,928		$	48,962
Total interest expense	1,148			1,014			952			856			738			3,970			2,814
Net interest income before recovery	11,595			11,831			11,629			11,903			11,673			46,958			46,148
Recovery of loan losses	(539		)	(525		)	1,315			(490		)	(1,038		)	(239		)	(3,206		)
Net interest income	12,134			12,356			10,314			12,393			12,711			47,197			49,354
Noninterest income	1,777			1,637			1,537			1,594			1,757			6,545			6,691
Noninterest expense	10,194			9,912			10,506			10,930			11,169			41,542			41,945
Income before income tax	3,717			4,081			1,345			3,057			3,299			12,200			14,100
Income tax expense	1,458			1,573			514			1,153			1,183			4,698			5,425
Net income	$	2,259		$	2,508		$	831		$	1,904		$	2,116		$	7,502		$	8,675
Basic earnings per common share	$	0.12		$	0.13		$	0.04		$	0.10		$	0.11		$	0.40		$	0.44
Diluted earnings per common share	$	0.12		$	0.13		$	0.04		$	0.10		$	0.11		$	0.39		$	0.44
NONINTEREST INCOME AND EXPENSE
Noninterest Income
Deposit service charges and fees	$	563		$	583		$	541		$	567		$	603		$	2,254		$	2,248
Other fee income	574			478			505			495			505			2,052			2,143
Insurance commissions and annuities income	122			53			72			55			169			302			386
Gain on sales of loans, net	16			38			3			18			10			75			102
Gain on sale of securities	—			—			—			46			—			46			—
Gain (loss) on disposition of premises and equipment	38			—			—			—			—			38			(1		)
Loan servicing fees	62			66			75			73			83			276			354
Amortization of servicing assets	(32		)	(28		)	(40		)	(28		)	(32		)	(128		)	(137		)
Recovery (impairment) of servicing assets	16			—			3			(3		)	(1		)	16			(3		)
Earnings on bank owned life insurance	56			54			46			51			52			207			194
Trust income	182			167			165			160			183			674			712
Other	180			226			167			160			185			733			693
Total noninterest income	$	1,777		$	1,637		$	1,537		$	1,594		$	1,757		$	6,545		$	6,691
Noninterest Expense
Compensation and benefits	$	5,734		$	5,315		$	5,713		$	5,993		$	6,034		$	22,755		$	22,222
Office occupancy and equipment	1,611			1,487			1,635			1,647			1,620			6,380			6,522
Advertising and public relations	252			144			252			222			208			870			991
Information technology	762			707			699			724			687			2,892			2,669
Supplies, telephone, and postage	346			345			297			376			397			1,364			1,586
Amortization of intangibles	129			129			129			136			136			523			550
Nonperforming asset management	99			89			127			84			239			399			681
Loss (gain) on sales of other real estate owned	(113		)	(15		)	(38		)	38			33			(128		)	(58		)
Valuation adjustments of other real estate owned	70			115			10			119			81			314			548
Operations of other real estate owned	121			143			177			219			169			660			573
FDIC insurance premiums	64			238			236			217			205			755			904
Other	1,119			1,215			1,269			1,155			1,360			4,758			4,757
Total noninterest expense	$	10,194		$	9,912		$	10,506		$	10,930		$	11,169		$	41,542		$	41,945

Page 3

BANKFINANCIAL CORPORATION

SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA

Latest Five Quarters

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

	2016												2015
	IVQ			IIIQ			IIQ			IQ			IVQ
LOANS
One–to–four family residential real estate loans	$	135,218		$	142,130		$	147,876		$	154,588		$	159,501
Multi–family mortgage loans	542,887			505,369			504,158			513,450			506,026
Nonresidential real estate loans	182,152			186,504			191,685			219,339			226,735
Construction and land loans	1,302			1,005			1,767			1,799			1,313
Commercial loans	103,063			106,878			84,951			76,325			79,516
Commercial leases	352,539			304,753			282,629			272,849			265,405
Consumer loans	2,255			1,846			1,744			1,890			1,831
	1,319,416			1,248,485			1,214,810			1,240,240			1,240,327
Net deferred loan origination costs	1,663			1,657			1,658			1,661			1,621
Allowance for loan losses	(8,127		)	(8,334		)	(8,915		)	(9,416		)	(9,691		)
Loans, net	$	1,312,952		$	1,241,808		$	1,207,553		$	1,232,485		$	1,232,257
LOAN ORIGINATIONS (1)
One–to–four family residential real estate loans	$	1,426		$	2,322		$	2,279		$	1,637		$	2,657
Multi–family mortgage loans	54,954			25,062			18,017			24,385			43,110
Nonresidential real estate loans	9,033			3,518			3,587			5,002			20,408
Construction and land loans	359			92			—			198			—
Commercial loans	49,385			67,919			54,149			35,771			44,293
Commercial leases (3)	87,855			54,717			54,633			39,303			71,201
Consumer loans	611			883			1,025			588			725
	$	203,623		$	154,513		$	133,690		$	106,884		$	182,394
LOAN PAYMENTS and PAYOFFS (2)
One–to–four family residential real estate loans	$	8,698		$	7,245		$	8,500		$	6,413		$	7,471
Multi–family mortgage loans	16,999			24,276			27,188			17,082			13,559
Nonresidential real estate loans	12,697			8,740			30,024			11,878			12,748
Construction and land loans	24			852			33			57			41
Commercial loans	53,147			45,990			45,528			39,030			45,460
Commercial leases	35,984			31,437			48,774			31,552			26,353
Consumer loans	633			801			1,080			664			701
	$	128,182		$	119,341		$	161,127		$	106,676		$	106,333
LOAN PAYMENTS and PAYOFFS (Loans rated 5 or higher) (2)
One–to–four family residential real estate loans	$	350		$	220		$	778		$	441		$	363
Multi–family mortgage loans	1,131			1,155			4,163			5,117			2,199
Nonresidential real estate loans	1,690			500			19,164			409			784
Construction and land loans	—			828			—			24			8
Commercial loans	5,681			6,037			12,243			7,861			4,873
Commercial leases	177			203			197			194			—
	$	9,029		$	8,943		$	36,545		$	14,046		$	8,227

(1) Loan originations include draws on revolving lines of credit and exclude loan renewals.

(2) Loan payments and payoffs exclude loan renewals.

(3) Fourth quarter 2016 originations include $55.0 million purchased investment grade commercial leases.

Page 4

BANKFINANCIAL CORPORATION

SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA

Latest Five Quarters

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

	2016												2015
	IVQ			IIIQ			IIQ			IQ			IVQ
CREDIT QUALITY:
Nonperforming Assets:
Nonaccrual loans (1):
One–to–four family residential real estate loans	$	2,851		$	2,691		$	2,625		$	3,370		$	2,455
Multi–family mortgage loans	185			508			1,021			953			821
Nonresidential real estate loans	260			717			754			295			296
Construction and land loans	—			—			—			803			—
Nonaccrual loans	3,296			3,916			4,400			5,421			3,572
Loans past due over 90 days, still accruing	—			—			828			—			—
Other real estate owned:
One–to–four family residential real estate loans	1,565			2,281			2,433			2,619			2,621
Multi–family real estate	370			393			737			737			951
Nonresidential real estate	1,066			780			1,065			1,135			1,747
Land	894			927			1,138			1,138			1,692
Other real estate owned	3,895			4,381			5,373			5,629			7,011
Nonperforming assets	$	7,191		$	8,297		$	10,601		$	11,050		$	10,583
Asset Quality Ratios
Nonperforming assets to total assets	0.44		%	0.54		%	0.71		%	0.73		%	0.70		%
Nonperforming loans to total loans	0.25			0.31			0.43			0.44			0.29
Nonperforming commercial-related loans to total commercial-related loans (2)	0.04			0.11			0.24			0.19			0.10
Nonperforming residential and consumer loans to total residential and consumer loans	2.08			1.87			1.75			2.15			1.52
Allowance for loan losses to nonperforming loans	246.57			212.82			170.52			173.69			271.30
Concentrations of Credit
Commercial Real Estate for FFEIC Concentration Limits	$	690,879		$	658,887		$	662,493		$	685,732		$	682,012
% FFIEC Total Capital	410.96		%	399.18		%	410.28		%	392.73		%	398.28		%
Multi–family mortgage loans - 50% risk based capital qualified (included above)	$	305,436		$	269,641		$	246,117		$	238,922		$	233,409
% FFIEC Total Capital	181.68		%	163.36		%	152.42		%	136.84		%	136.31		%
Commercial Leases - Investment Grade	$	268,022		$	215,237		$	199,020		$	182,057		$	170,100
Commercial Leases - Other	84,517			89,516			83,609			90,792			95,305

(1) Purchased impaired loans are combined with nonaccrual loans in the above table.

(2) Commercial-related loans include Multi-family mortgage, Nonresidential, Construction, Land and Commercial loans and Leases.

Page 5

BANKFINANCIAL CORPORATION

SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA

Latest Five Quarters

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

	2016												2015
	IVQ			IIIQ			IIQ			IQ			IVQ
SUBSTANDARD PERFORMING LOANS
One–to–four family residential real estate loans	$	670		$	475		$	335		$	440		$	847
Multi–family mortgage loans	1,048			2,119			2,025			3,347			5,167
Nonresidential real estate loans	1,845			2,407			3,194			4,981			4,981
Construction and land loans	—			—			830			—			842
Commercial loans	66			75			225			137			614
Consumer loans	—			—			2			—			—
	$	3,629		$	5,076		$	6,611		$	8,905		$	12,451
PERFORMING LOANS GREATER THAN 30 DAYS PAST DUE
30 – 59 days past due	$	2,237		$	685		$	171		$	3,012		$	2,036
60 – 89 days past due	617			419			71			30			926
Matured Loans	270			784			277			1,387			1,467
	$	3,124		$	1,888		$	519		$	4,429		$	4,429
ALLOWANCE FOR LOAN LOSSES
Beginning balance	$	8,334		$	8,915		$	9,416		$	9,691		$	10,081
Charge offs:
One–to–four family residential real estate loans	(30		)	(102		)	(355		)	(52		)	(59		)
Multi–family mortgage loans	(28		)	—			(6		)	(45		)	(9		)
Nonresidential real estate loans	(3		)	(55		)	(1,657		)	(3		)	(102		)
Commercial loans	—			—			—			—			(54		)
Consumer loans	(1		)	(6		)	(2		)	(16		)	(5		)
	(62		)	(163		)	(2,020		)	(116		)	(229		)
Recoveries:
One–to–four family residential real estate loans	229			5			6			81			407
Multi–family mortgage loans	6			10			9			137			5
Nonresidential real estate loans	—			39			161			—			460
Construction and land loans	—			—			—			35			—
Commercial loans	159			45			28			77			5
Commercial leases	—			7			—			—			—
Consumer loans	—			1			—			1			—
	394			107			204			331			877
Net (charge–offs) recoveries	332			(56		)	(1,816		)	215			648
Provision for (recovery of ) loan losses	(539		)	(525		)	1,315			(490		)	(1,038		)
Ending balance	$	8,127		$	8,334		$	8,915		$	9,416		$	9,691
Allowance for loan losses to total loans	0.62		%	0.67		%	0.73		%	0.76		%	0.78		%
Net (charge–off) recovery ratio (1)	0.11			(0.02		)	(0.60		)	0.07			0.22

(1) Annualized

Page 6

BANKFINANCIAL CORPORATION

SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA

Latest Five Quarters

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

	2016												2015
	IVQ			IIIQ			IIQ			IQ			IVQ
DEPOSITS
Noninterest–bearing demand	$	249,539		$	234,652		$	231,928		$	238,848		$	254,830
Savings deposits	160,002			155,199			158,669			161,554			156,752
Money market accounts	311,183			320,814			315,615			323,197			329,654
Interest–bearing NOW accounts	267,054			263,286			258,083			247,434			248,982
Certificates of deposits - retail	220,602			223,642			223,948			221,101			211,010
Certificates of deposits - wholesale	131,010			119,102			80,359			72,555			11,691
	$	1,339,390		$	1,316,695		$	1,268,602		$	1,264,689		$	1,212,919
SELECTED AVERAGE BALANCES
Total average assets	$	1,576,345		$	1,511,475		$	1,510,115		$	1,513,683		$	1,448,857
Total average interest–earning assets	1,481,775			1,414,736			1,413,161			1,414,008			1,348,782
Average loans	1,253,224			1,225,480			1,210,726			1,238,270			1,175,723
Average securities	99,767			106,904			108,865			118,557			107,344
Average stock in FHLB & FRB	8,133			6,257			6,257			6,257			6,257
Average other interest–earning assets	120,651			76,095			87,313			50,924			59,458
Total average interest–bearing liabilities	1,108,181			1,052,916			1,037,781			1,037,730			971,000
Average interest–bearing deposits	1,088,265			1,050,935			1,034,674			962,823			951,631
Average borrowings	19,916			1,981			3,107			74,907			19,369
Average stockholders’ equity	205,071			206,237			209,231			212,322			213,858
SELECTED YIELDS AND COST OF FUNDS (1):
Total average interest–earning assets	3.42		%	3.61		%	3.58		%	3.63		%	3.65		%
Average loans	3.87			4.02			4.02			4.01			4.06
Average securities	1.20			1.14			1.13			1.07			1.07
Average other interest–earning assets	0.78			0.73			0.75			0.69			0.51
Total average interest–bearing liabilities	0.41			0.38			0.37			0.33			0.30
Average interest–bearing deposits	0.41			0.38			0.37			0.33			0.30
Average borrowings	0.64			0.40			0.26			0.37			0.25
Net interest rate spread	3.01			3.23			3.21			3.30			3.35
Net interest margin	3.11			3.33			3.31			3.39			3.43

(1)     Annualized

Page 7

BANKFINANCIAL CORPORATION

SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA

Latest Five Quarters

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

	2016												2015
	IVQ			IIIQ			IIQ			IQ			IVQ
CAPITAL RATIOS
BankFinancial Corporation
Equity to total assets (end of period)	12.64		%	13.22		%	13.78		%	13.86		%	14.04		%
Tangible equity to tangible total assets (end of period)	12.60			13.17			13.72			13.79			13.97
Risk–based total capital ratio	16.96			17.64			18.09			17.80			17.89
Common Tier 1 (CET1)	16.25			16.87			17.26			16.95			17.01
Risk–based tier 1 capital ratio	16.25			16.87			17.26			16.95			17.01
Tier 1 leverage ratio	11.92			12.28			12.41			12.53			13.26
Tier 1 capital	$	185,718		$	183,092		$	184,695		$	186,964		$	189,044
BankFinancial, NA
Risk–based total capital ratio	14.72		%	15.21		%	15.09		%	15.83		%	15.41		%
Common Tier 1 (CET1)	14.01			14.44			14.26			14.98			14.54
Risk–based tier 1 capital ratio	14.01			14.44			14.26			14.98			14.54
Tier 1 leverage ratio	10.27			10.51			10.25			11.08			11.33
Tier 1 capital	$	159,986		$	156,725		$	152,559		$	165,183		$	161,545
COMMON STOCK AND DIVIDENDS
Stock Prices:
Close	$	14.82		$	12.70		$	11.99		$	11.82		$	12.63
High	15.12			12.80			12.89			13.29			13.22
Low	12.15			11.75			11.38			11.42			12.10
Common shares outstanding	19,233,760			19,271,211			19,678,697			19,939,500			20,297,317
Book value per share	$	10.65		$	10.57		$	10.50		$	10.51		$	10.46
Tangible book value per share	$	10.61		$	10.52		$	10.45		$	10.45		$	10.40
Cash dividends declared on common stock	$	0.06		$	0.05		$	0.05		$	0.05		$	0.04
Dividend payout ratio	51.09		%	38.82		%	119.60		%	53.50		%	38.59		%
Stock repurchases	$	520		$	5,022		$	3,280		$	4,393		$	2,582
Stock repurchases – shares	37,451			407,486			260,803			357,817			204,649
EARNINGS PER SHARE COMPUTATIONS
Net income	$	2,259		$	2,508		$	831		$	1,904		$	2,116
Average common shares outstanding	19,257,435			19,460,022			19,827,581			20,155,541			20,428,979
Less: Unearned ESOP shares	(645,751		)	(670,351		)	(694,773		)	(719,109		)	(743,659		)
Unvested restricted stock shares	(940		)	(940		)	(2,690		)	(7,881		)	(7,932		)
Weighted average common shares outstanding	18,610,744			18,788,731			19,130,118			19,428,551			19,677,388
Plus: Dilutive common shares equivalents	170,683			323			317			2,939			25,141
Weighted average dilutive common shares outstanding	18,781,427			18,789,054			19,130,435			19,431,490			19,702,529
Basic earnings per common share	$	0.12		$	0.13		$	0.04		$	0.10		$	0.11
Diluted earnings per common share	$	0.12		$	0.13		$	0.04		$	0.10		$	0.11
Number of anti–dilutive stock options excluded from the diluted earnings per share calculation	—			536,459			536,459			1,752,156			536,459
Weighted average exercise price of anti–dilutive options	$	—		$	12.99		$	12.99		$	12.30		$	12.99

Page 8

BANKFINANCIAL CORPORATION

NON–GAAP FINANCIAL MEASURES

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

These measures include pre–tax pre–provision earnings from adjusted operations and pre–tax pre–provision earnings from adjusted operations to average total assets. Management believes that by excluding equity-based compensation expense, other real estate owned related income and expense items and nonperforming asset management expenses from noninterest expense, these measures better reflect our adjusted operating performance.

Page 9

BANKFINANCIAL CORPORATION

NON-GAAP FINANCIAL MEASURES

(Dollars in thousands, except per share) - (Unaudited)

	Three Months Ended December 31,						Year Ended December 31,
	2016			2015			2016			2015
Pre–tax pre–provision earnings from adjusted operations
Income before income taxes	$	3,717		$	3,299		$	12,200		$	14,100
Recovery of loan losses	(539		)	(1,038		)	(239		)	(3,206		)
	3,178			2,261			11,961			10,894
Adjustments:
Equity-based compensation	107			306			982			638
Nonperforming asset management	99			239			399			681
Loss (gain) on sale of other real estate owned	(113		)	33			(128		)	(58		)
Valuation adjustments of other real estate owned	70			81			314			548
Operations of other real estate owned	121			169			660			573
Adjustments	284			828			2,227			2,382
Pre–tax pre–provision earnings from adjusted operations	$	3,462		$	3,089		$	14,188		$	13,276
Pre–tax pre–provision earnings from adjusted operations to average total assets (1)	0.88		%	0.85		%	0.93		%	0.92		%

(1) Annualized

Page 10

BANKFINANCIAL CORPORATION

NON-GAAP FINANCIAL MEASURES

(Dollars in thousands, except per share) - (Unaudited)

FOR THE LATEST FIVE QUARTERS

	2016												2015
	IVQ			IIIQ			IIQ			IQ			IVQ
Pre–tax pre–provision earnings from adjusted operations
Income before income taxes	$	3,717		$	4,081		$	1,345		$	3,057		$	3,299
Recovery of loan losses	(539		)	(525		)	1,315			(490		)	(1,038		)
	3,178			3,556			2,660			2,567			2,261
Adjustments:
Equity-based compensation	107			107			391			377			306
Nonperforming asset management	99			89			127			84			239
Loss (gain) on sale of other real estate owned	(113		)	(15		)	(38		)	38			33
Valuation adjustments of other real estate owned	70			115			10			119			81
Operations of other real estate owned	121			143			177			219			169
	284			439			667			837			828
Pre–tax pre–provision earnings from adjusted operations	$	3,462		$	3,995		$	3,327		$	3,404		$	3,089
Pre–tax pre–provision earnings from adjusted operations to average total assets (1)	0.88		%	1.06		%	0.88		%	0.90		%	0.85		%

(1) Annualized

Page 11