UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-K/A

Amendment No. 1







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

For the fiscal year ended December 31, 2009

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)         |  | (Zip Code)

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







|                                                                 |  |                                           
|---------------------------------------------------------------- |  | ------------------------------------------
|Securities registered pursuant to Section 12(b) of the Act:     
|                                                                 | 
|Title of Each Class:                                             |  | Name of Each Exchange on Which Registered:
|Common Stock, par value $0.01 per share                          |  | The NASDAQ Stock Market LLC               
|                                                                
|Securities registered pursuant to Section 12(g) of the Act:
None





Indicate by
check mark whether the issuer is a well-known seasoned issuer as defined in Rule 405 of the Securities
Act.    Yes   ̈    No  x.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.    Yes   ̈    No  x.

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   ̈    No  x

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

The aggregate market value of the registrants outstanding voting common stock held by non-affiliates on June 30, 2009,
determined using a per share closing price on that date of $8.86, as quoted on The Nasdaq Stock Market, was $181.2 million.

At March 31, 2010, there were 21,416,377 shares of common stock, $0.01 par value, outstanding.





DOCUMENTS INCORPORATED BY REFERENCE

None









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Explanatory Note

BankFinancial Corporation (the Company) is filing this Amendment No. 1 on Form 10-K/A to its Annual Report on Form 10-K
for the year ended December 31, 2009, as filed with the Securities and Exchange Commission on March 8, 2010. In accordance with General Instruction G(3), the Company is now filing this amendment to include in the Form 10-K the information
required to be filed pursuant to Part III of Form 10-K.



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PART III



|ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
|-------- | --------------------------------------------------

The table below sets forth certain information, as of April 30, 2010 regarding the members of the Board of Directors, including their
years of service and terms of office. Except as indicated elsewhere in this Annual Report on Form 10K/A, there are no arrangements or understandings between any of the directors or nominees and any other person pursuant to which such directors or
nominees were selected.



|                         |  |                                                              |  |                    |  |                       
|------------------------ |  | ------------------------------------------------------------ |  | ------------------ |  | ----------------------
|Name                     |  | Position(s) Held
in the Company                              |  | DirectorSince 
(1) |  | Term of Classto
Expire
|John M. Hausmann, C.P.A. |  | Director                                                     |  | 1990               |  | 2010                  
|Glen R. Wherfel, C.P.A.  |  | Director                                                     |  | 2001               |  | 2010                  
|F. Morgan Gasior         |  | Chairman of the Board, Chief Executive Officer and President |  | 1983               |  | 2011                  
|Joseph A. Schudt         |  | Director                                                     |  | 1992               |  | 2011                  
|Cassandra J. Francis     |  | Director                                                     |  | 2006               |  | 2012                  
|Sherwin R. Koopmans      |  | Director                                                     |  | 2003               |  | 2012                  
|Terry R. Wells           |  | Director                                                     |  | 1994               |  | 2012                  



|(1) | For each director, denotes the earlier of the year the individual became a director of BankFinancial, F.S.B. or the year the individual became a director of the Company
or its predecessors, BankFinancial MHC and BankFinancial Corporation, the federal corporation. Except for Glen R. Wherfel and Cassandra J. Francis, each individual has served as a director of the Company since its formation in 2004. Mr. Wherfel
was appointed to the Board of Directors of the Company on May 18, 2006; Ms. Francis was appointed to the Board of Directors of the Company on September 27, 2006.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The business experience for at least the past five years of each member of the Board of Directorsis set forth below.

John M. Hausmann, C.P.A. Age 55. Mr. Hausmann has been a self-employed certified public accountant since 1980. Prior to
that time, he was an accountant with Arthur Andersen. Mr. Hausmann is a member of the American Institute of Certified Public Accountants and the Illinois Certified Public Accountant Society. He has been a director of the Company since its
formation in 2004, and of the Bank since 1990. He was a director of the Companys predecessors, BankFinancial MHC and BankFinancial Corporation, a federal corporation, from 1999 to 2005. Mr. Hausmann is the Chairman of the Audit Committees
of the Company and the Bank and a member of the Executive Committees of the Company and the Bank.

Mr. Hausmann brings to
the Board, among other skills and qualifications, a comprehensive understanding of accounting, auditing and taxation principles based on his many years of experience as a certified public accountant. His experience as a member of the Audit Committee
has provided him with a thorough knowledge of the Companys internal controls and internal and external audit procedures. His tax and accounting practice and longtime residency in the Banks southernmost market territory have also provided
him with a unique familiarity with the needs of the Banks small business and municipal customers and communities.

Glen R. Wherfel, C.P.A.Age 60. Mr. Wherfel has been a principal in the accounting firm of Wherfel &
Associates since 1984. Mr. Wherfel was a director of Success National Bank from 1993 to 2001, and of Success Bancshares from 1998 to 2001. He was the Chairman of Success National Banks Loan Committee and a member of its Asset Liability
Management Committee. Mr. Wherfel has been a director of the Company since 2006, and of the Bank since 2001. Mr. Wherfel is a member of the Asset Quality Committee of the Bank.

Mr. Wherfel brings to the Board, among other skills and qualifications, substantial experience in entrepreneurial finance and
operations. His tax and accounting practice, longtime residency in the Banks northern market territory and service as a director of Success National Bank have also provided him a unique familiarity with the needs of the Banks small
business and municipal customers and communities.

Cassandra J. Francis. Age 44. Ms. Francis recently joined
Clayco, Inc. as Executive Director of its new Chicago office. Clayco is a national full-service real estate and design-build firm active in the healthcare, higher education, commercial, residential, and industrial sectors. Ms. Francis was
previously the Director of Olympic Village Development for the 2016 Chicago Olympic Committee. She had previously served in various management positions with U.S. Equities Development, L.L.C. since 1995 and most recently held the office of Senior
Vice President. Ms. Francis is a member of the American Institute of Certified Planners, is a LEED accredited professional, and is licensed as a real estate broker in the States of Illinois and Indiana. She is also a member of the Board of
Governors of Lambda Alpha International, an honorary land economics society. Ms. Francis has been a director of the Company and the Bank since 2006, and is a member of the Asset Liability Management Committee of the Bank and the Human Resources
Committees of the Company and the Bank, and for 2010, a member of the Corporate Governance and Nominating Committee of the Company.



3



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Ms. Francis brings to the Board, among other skills and qualifications, substantial
experience in urban planning and commercial real estate development and operations, with particular emphasis in retail development and leasing. She also has extensive experience with commercial real estate finance and valuations, particularly in
Midwestern markets.

F. Morgan Gasior. Age 46. Mr. Gasior has served as Chairman of the Board, Chief
Executive Officer and President of the Company since its formation in 2004, and of the Bank since 1989, and as a director of the Bank since 1983. He held the same positions with the Companys predecessors, BankFinancial MHC and BankFinancial
Corporation, a federal corporation, from 1999 to 2005. Mr. Gasior has been employed by the Bank in a variety of positions since 1984, and became a full-time employee in 1988 when he was appointed as Executive Vice President and Chief Operating
Officer. Mr. Gasior serves as the Chairman of the Executive Committees of the Company and the Bank and is a member of the Asset Quality Committee of the Bank. He was also a director and officer of Financial Assurance Services from 1989 through
2003. Mr. Gasior is licensed as an attorney in the States of Illinois and Michigan, but he does not actively practice law.

Mr. Gasior brings to the Board, among other skills and qualifications, a comprehensive understanding of the Banks strategies,
operations and customers based on his more than 25 years of service as an employee and officer of the Bank. He has led the development and implementation of the Banks financial, lending, operational, technology and expansion strategies, and
this experience has uniquely positioned him to adjust the Companys business strategies to respond to changing economic, regulatory and competitive conditions, and to discern and coordinate operational changes to match these strategies. His
position on the Board also provides a direct channel of communication from senior management to the Board.

Sherwin R.
Koopmans. Age 68. Mr. Koopmans has been actively involved in the banking industry since 1964, including service in senior management positions with the Federal Deposit Insurance Corporation and the Resolution Trust Corporation. Since
retiring from government service in December 1995, Mr. Koopmans has performed short-term consulting engagements on banking and deposit insurance issues for private clients, including several located in European, Asian and South American
countries. Mr. Koopmans is currently retired. He was a director of Success Bancshares and its wholly-owned subsidiary, Success National Bank, from 1997 until 2001, and was the Chairman of Success Bancshares Executive Committee and
Asset/Liability Management Committee and a member of its Audit Committee and Human Resources Committee. Mr. Koopmans has been a director of the Company since its formation in 2004, and of the Bank since 2004. He was a director of the
Companys predecessors, BankFinancial MHC and BankFinancial Corporation, a federal corporation, from 2003 to 2005. He also served as a director of Financial Assurance Services, a subsidiary of the Bank, from 2001 to 2003. Mr. Koopmans is
the Chairman of the Asset Liability Management Committee of the Bank, a member of the Human Resources Committees and Executive Committees of the Company and the Bank, a member of the Audit Committee of the Company, and for 2010, a member of the
Corporate Governance and Nominating Committee of the Company.

Mr. Koopmans brings to the Board, among other skills and
qualifications, substantial experience in the federal bank regulatory system, and with federal banking laws, regulations and examination practices and the FDICs resolution process. His experience as a bank regulator has also provided him with
a comprehensive understanding of interest rate risk and liquidity management, which he regularly utilizes as the Chair of the Boards Asset Liability Committee.

Joseph A. Schudt. Age 72. Mr. Schudt served as the Principal Partner and President of Joseph A. Schudt &
Associates, a professional engineering firm based in Frankfort, Illinois, specializing in engineering design, environmental analyses and land surveying, from 1972 to 2004. Mr. Schudt currently serves as a Vice President of Joseph A.
Schudt & Associates. Mr. Schudt is licensed as a professional engineer in seven states, including Illinois. He has been a director of the Company since its formation in 2004, and of the Bank since 1992. He was a director of the
Companys predecessors, BankFinancial MHC and BankFinancial Corporation, a federal corporation, from 1999 to 2005. Mr. Schudt is the Chairman of the Asset Quality Committee of the Bank and of the Human Resources Committees of the Company
and the Bank, a member of the Executive Committees of the Company and the Bank, and for 2010, a member of the Corporate Governance and Nominating Committee of the Company.

Mr. Schudt brings to the Board, among other skills and qualifications, substantial experience in commercial real estate construction
and development, and federal, state and local requirements relating to project development, land use and environmental remediation. His experience as a member and the Chair of the Banks Asset Quality Committee has provided him with a thorough
knowledge of the Banks loan portfolio and portfolio management practices, as well as applicable financial, consumer and social compliance regulations.

Terry R. Wells. Age 51. Mr. Wells has served as the Mayor of the Village of Phoenix, Illinois since
1993. Mr. Wells has also taught history and social studies since 1981 at the elementary and high school levels, and presently teaches U.S. History at Thornton Township High School in Harvey, Illinois. Mr. Wells serves as
President of the South Suburban Mayors and Managers



4



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Association. He is also a member of the Board of Directors of Pace, a Division of the Regional Transportation Authority, and the Board of Trustees of South Suburban College. Mr. Wells has
been a director of the Company since its formation in 2004, and of the Bank since 1994. He was a director of the Companys predecessors, BankFinancial MHC and BankFinancial Corporation, a federal corporation, from 1999 to 2005.
Mr. Wells is a member of the Audit Committees and the Human Resources Committees of the Company and the Bank, and for 2010, Chairman of the Corporate Governance and Nominating Committee of the Company.

Mr. Wells brings to the Board, among other skills and qualifications, substantial experience in municipal government and finance,
community and economic development and serving the needs of low- and moderate-income borrowers and communities. His experience as an educator has also provided him with significant expertise in secondary and post-secondary vocational training
applicable to the Banks customer service and support personnel.

Executive Officers Who Are Not Directors

Set forth below is information, as of April 30, 2010, regarding the principal occupations for at least the past five years of the
individuals who served as executive officers of the Company and/or the Bank during 2009 and who are not directors of the Company or the Bank. All executive officers of the Company and the Bank are elected annually by their respective Boards of
Directors and serve until their successors are elected and qualify. No executive officer identified below is related to any director or other executive officer of the Company or the Bank. Except as indicated elsewhere in this Annual Report on Form
10-K/A, there are no arrangements or understandings between any officer identified below and any other person pursuant to which any such officer was selected as an officer.

Gregg T. Adams.Age 51. Mr. Adams has served as the Executive Vice President of the Marketing and Sales Division of
the Bank since 2001 and was the Senior Vice President of the Marketing and Sales Division from 2000 to 2001. Mr. Adams joined the Bank in 1986 and has served in various positions with the Bank and its former real estate subsidiary, Financial
Properties, Inc., including as Vice President of Marketing Development.

James J. Brennan.Age 59.
Mr. Brennan has served as the Secretary and General Counsel of the Bank since 2000 and of the Company since its formation in 2004, and held the same positions with BankFinancial MHC and BankFinancial Corporation, a federal corporation, from
2000 to 2005. Mr. Brennan also serves as the Executive Vice President of the Corporate Affairs Division of the Company and the Bank. Mr. Brennan was a practicing attorney from 1975 until 2000. Prior to joining the Bank and its parent
companies, he was a partner in the law firm of Barack Ferrazzano Kirschbaum & Nagelberg, Chicago, Illinois, and was the Co-Chairman of the firms Financial Institutions Group and a member of its Management Committee. Mr. Brennan
is also a director of Financial Assurance Services.

Christa N. Calabrese. Age 61. Ms. Calabrese has served
as the President of the Banks Northern Region since 2001. She served as the Chief Lending Officer of Success National Bank from 1992 until it was acquired by the Company in 2001, and during that time she held the offices of Executive Vice
President and Senior Vice President. Ms. Calabrese was an Asset Specialist with the Resolution Trust Corporation from 1990 to 1992 and held commercial lending positions with several Chicago area community banks from 1969 to 1990.

Paul A. Cloutier, C.P.A.Age 46. Mr. Cloutier has served as the Chief Financial Officer and Treasurer of the Company
since its formation in 2004, of the Bank since 1991, and of BankFinancial MHC and BankFinancial Corporation, a federal corporation, from 1999 to 2005. Mr. Cloutier also serves as the Executive Vice President of the Finance Division of the
Company and the Bank. He is a registered certified public accountant in the State of Michigan and is a member of the American Institute of Certified Public Accountants. Prior to joining the Bank and its parent companies, he was a Senior Tax
Associate with Coopers & Lybrand.

John G. Manos.Age 49. Mr. Manos has served as the President of
the Banks Southern Region since 2006. He has held various positions with the Bank since 1999, including Senior Vice President, Vice President and Senior Vice President of Regional Commercial Banking. Prior to joining the Bank, Mr. Manos
was the Manager  Commercial Lending for Preferred Mortgage Associates.

Audit Committee

The Board of Directors has an Audit Committee comprised of Messrs. Hausmann (Chairman), Wells and Koopmans. Each is an
independent director as defined in Rule 4200(a)(15) of the listing standards of the NASDAQ Stock Market and Rule 10A-3 of the Securities and Exchange Commission. The Board of Directors has determined that Messrs. Hausmann and Koopmans
both qualify as an audit committee financial expert as currently defined in the regulations of the Securities and Exchange Commission. (SEC).



5



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Section 16(a) Beneficial Ownership Reporting Compliance

The Companys executive officers and directors, and beneficial owners of greater than 10% of the outstanding shares of the
Companys common stock, are required to file reports with the SEC disclosing beneficial ownership and changes in beneficial ownership of the Companys common stock. SEC rules require disclosure if an executive officer, director or 10%
beneficial owner fails to file these reports on a timely basis. Based on the Companys review of ownership reports required to be filed for the year ended December 31, 2009, no executive officer, director or 10% beneficial owner of shares
of the Companys common stock failed to file any required ownership report on a timely basis, except that Mr. Joseph Schudt, Director, filed one late Form 4, which was five business days late, covering three purchase transactions that
occurred on a single day.

Code of Ethics

The Company has adopted a Code of Ethics for Senior Financial Officers that applies to the Companys principal executive officer,
principal financial officer, principal accounting officer, and persons performing similar functions. A copy of the Companys Code of Ethics was previously filed as Exhibit 14 to the Companys Annual Report on Form 10-K for the year ended
December 31, 2005. The Company has also adopted a Code of Business Conduct, pursuant to the listing standards of the NASDAQ Stock Market, that applies generally to the Companys directors, officers, and employees. The Code of Ethics for
Senior Financial Officers and the Code of Business Conduct have been reviewed annually by the Board of Directors since the time of their adoption and the reviews have not resulted in any revisions.



|ITEM 11. | EXECUTIVE COMPENSATION
|-------- | ----------------------

COMPENSATION DISCUSSION AND ANALYSIS

Introduction

This
Compensation Discussion and Analysis describes the Companys compensation philosophy and policies for 2009 as applicable to the executive officers named in the Summary Compensation Table. This section explains the structure and rationale
associated with each material element of the named executive officers compensation, and it provides context for the more detailed disclosure tables and specific compensation amounts provided in the following section. It is important to note
that the Company and the Bank share an executive management team, and except for awards made pursuant to the Companys 2006 Equity Incentive Plan (the 2006 EIP), the members of the executive management team are compensated by the
Bank rather than the Company, and the Company reimburses the Bank for their services to the Company through intercompany expense allocations. The compensation packages of the named executive officers are determined and approved by the Human
Resources Committee based upon each officers performance and roles for both the Company and the Bank.

Role of the Human Resources
Committee of the Board of Directors

Pursuant to its Charter, the Human Resources Committee is directly responsible for the
execution of the Board of Directors responsibilities with respect to compensation, performance evaluation and succession planning for the Companys Chief Executive Officer and other named executive officers. The Human Resources Committee
is also responsible for the submission of an annual report on executive compensation to the Board of Directors for inclusion in the Companys Annual Report on Form 10-K/A. During 2009, the Human Resources Committee was comprised of Messrs.
Schudt (Chairman), Koopmans, and Wells and Ms. Francis, each of whom is expected to serve on the committee through June 29, 2010. Each of the members is considered independent according to the listing standards of the NASDAQ
Stock Market, an outside director pursuant to Section 162(m) of the Internal Revenue Code, and a non-employee director under Section 16 of the Securities Exchange Act of 1934.

Compensation Philosophy and Objectives

The overall objective of the Companys compensation program is to align executive officer compensation with the success of meeting
strategic, financial and management objectives and goals. The programs are designed to create meaningful and appropriate incentives to manage the business of the Company and the Bank successfully and to align executive officers interests with
those of the stockholders of the Company. The program is structured to accomplish the following:



| |  |  | encourage a consistent and competitive return to stockholders over the long-term, as the Company continues to deploy the capital raised in its 2005
initial public offering;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | maintain a corporate environment that encourages stability and a long-term focus for the primary constituencies of the Company, including employees,
stockholders, communities, clients and government regulatory agencies;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | maintain a program that:
| | - |  | ------------------------



| |  |  | clearly motivates personnel to perform and succeed according to the current goals of the Company;
| | - |  | -------------------------------------------------------------------------------------------------



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| |  |  | provides management with the appropriate empowerment to make decisions that benefit the primary constituents;
| | - |  | -------------------------------------------------------------------------------------------------------------



| |  |  | attracts and retains key personnel critical to the long-term success of the Company;
| | - |  | ------------------------------------------------------------------------------------



| |  |  | provides for management succession planning and related considerations;
| | - |  | -----------------------------------------------------------------------



| |  |  | encourages increased productivity; and
| | - |  | --------------------------------------



| |  |  | provides for subjective consideration in determining incentive and compensation components; and
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | ensure that management:
| | - |  | -----------------------



| |  |  | fulfills its oversight responsibility to its primary constituents;
| | - |  | ------------------------------------------------------------------



| |  |  | conforms its business conduct to the Companys established ethical standards;
| | - |  | -----------------------------------------------------------------------------



| |  |  | remains free from any influences that could impair or appear to impair the objectivity and impartiality of its judgments or treatment of the
constituents of the Company; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | avoids any conflict between its responsibilities to the Company and each executive officers personal interests.
| | - |  | ----------------------------------------------------------------------------------------------------------------

Compensation Principles and Factors

Business Plan Objectives. The Boards of Directors of the Company and the Bank periodically conduct a review of current and
anticipated business conditions in the context of the Companys and the Banks financial and competitive position. The review period typically includes at least the previous two fiscal years and up to five years prospectively. In
connection with this review, management submits a business plan to the Boards of Directors of the Company and the Bank that proposes strategic, financial and management objectives for the period covered, using multiple scenarios in response to a
variety of stated assumptions. The Boards of Directors then evaluate the proposed business plan, and modify its provisions to the extent they deem appropriate. The business plan is updated by management and the Boards of Directors periodically
throughout the year to respond to changing circumstances and conditions. The business plan provides a basis for evaluating the future progress of the organization, including all appropriate strategic alternatives, and managements performance
pursuant to the Human Resources Committees Charter.

For 2009, the Human Resources Committee considered the
Companys and the Banks performance within the context of the 2009 business plan and managements overall performance, weighing numerous factors within and outside of managements control.

Corporate Performance and Peer Comparison. In establishing named executive officer compensation, the Human Resources
Committee periodically evaluates the Companys and the Banks performance compared to managements and the Board of Directors overall goals and business plan objectives as well as to other financial institutions. The Human
Resources Committee believes that using the Companys and the Banks performance as a factor in determining named executive officer compensation levels is a useful tool for aligning the executive officers interests with those of the
stockholders of the Company. With that in mind, the Human Resources Committee focuses on the Companys and the Banks overall performance relative to the prior calendar year and also considers the performance of local competitors. As part
of the evaluation and review, the Human Resources Committee also takes into account the manner in which various subjective issues, such as competition and general economic conditions may have affected performance.

For purposes of comparative analysis in assessing performance, the Company generally considers commercial banks and savings institutions
with total assets within a specific range. The group of comparative institutions used in 2009 generally, but not exclusively, included local financial institutions with total assets of $1 billion to $10 billion. Given the ever-changing landscape
within the banking industry, there is no specifically defined group of companies that is utilized for this analysis. The local financial institutions that were considered in 2009 included: Taylor Capital Group, Inc. (TAYC), First Midwest Bancorp,
Inc. (FMBI), MB Financial, Inc. (MBFI), Wintrust Financial Corporation (WTFC), PrivateBancorp Inc. (PVTB) and CFS Bancorp, Inc. (CITZ).

The Human Resources Committee believes that peer comparison is a useful tool for staying competitive in the marketplace and attracting
and retaining qualified executives. While the Human Resources Committee believes that it is prudent to consider peer comparison in determining compensation practices, it does not set empirical parameters or benchmarks for using this data. Rather,
the Human Resources Committee uses peer comparison data to ensure that executive compensation is reasonable relative to competing organizations.



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Performance Reviews and Role of Executives in Committee Meetings. Management
reports to the Board of Directors at least annually on its progress in achieving the strategic, financial and management objectives established by the business plan. The Board of Directors then considers the overall performance of the Company and
its named executive officers in the context of these objectives, weighing numerous factors and conditions within and outside of managements control. Following this review, the Human Resources Committee reviews current and proposed compensation
levels for the Chief Executive Officer and the other named executive officers. The Human Resources Committee relies in part upon the Chief Executive Officers self-assessment as well as his assessment of each named executive officers
individual performance, which considers each named executive officers achievements of his or her individual goals each year. However, the Board of Directors and Human Resources Committee exclude the Chief Executive Officer and all other named
executive officers from their discussions and formal meetings concerning named executive officer compensation, except to receive the results of the decisions made by the Human Resources Committee or the Board of Directors and other relevant
information.

Information Resources and Role of Compensation Consultants.In reviewing current and proposed
compensation levels for named executive officers, the Human Resources Committee considers the organizational structure and composition of the Company and the Bank, external information from public sources on peer and competitor compensation
practices and levels and other information it deems relevant to its responsibilities. The Human Resources Committee continued to have access to its own outside counsel and compensation consultant during 2009. The Human Resources Committee engaged
Frederic W. Cook & Co. to assist in the preparation of the compensation aspects of reports filed with the SEC and to be available for consultations with outside counsel to the Human Resources Committee, but did not engage an independent
compensation consultant for any other specific purpose in the 2009 review process because it believed it had sufficient information from external, independent public sources to execute its responsibilities.

Components of Executive Compensation

General.All named executive officers of the Company, including the Chief Executive Officer, are currently executive
officers of the Bank.On May 19, 2006, the Company adopted the 2006 EIP, and it was subsequently approved by the Companys stockholders at the 2006 Annual Meeting. Except for awards made pursuant to the 2006 EIP, the Company does
not separately compensate its named executive officers. The compensation that the Bank pays to its named executive officers, however, is taken into account in establishing the inter-company expense allocations that the Company pays to the Bank. In
connection with its mutual-to-stock conversion, the Bank also established a tax-qualified employee stock ownership plan (ESOP), and named executive officers are eligible to participate in the ESOP subject to vesting and other
requirements and limitations applicable to all participants generally.

Base Salary.Generally, base salary
levels are established based on job descriptions and responsibilities, either temporary or permanent in nature (including any revisions or proposed revisions thereto), competitive conditions and general economic trends in the context of the
Banks financial and franchise condition, and performance.

In 2010, the base salaries for the named executive officers
did not change and remained the same as in 2009. Such base salaries are as follows:



|                     |  |                                                                   |  |                             |        
|-------------------- |  | ----------------------------------------------------------------- |  | --------------------------- | -------
|Name                 |  | Position                                                          |  | 2009 and 2010Base
Salary(1)
|                     |  |                                                                  
|F. Morgan Gasior     |  | Chairman of the Board, Chief Executive Officer and President      |  | $                           | 405,804
|                     |  |                                                                  
|Paul A. Cloutier     |  | Executive Vice President and Chief Financial Officer              |  | $                           | 259,046
|                     |  |                                                                  
|James J. Brennan     |  | Executive Vice President, Corporate Secretary and General Counsel |  | $                           | 309,969
|                     |  |                                                                  
|Christa N. Calabrese |  | Regional President                                                |  | $                           | 226,807
|                     |  |                                                                  
|Gregg T. Adams       |  | Executive Vice President, Marketing and Sales                     |  | $                           | 225,000



|(1) | Base salary is effective as of March 16, 2009.
|--- | ----------------------------------------------

Non-Equity Short-Term Incentive Compensation.Annual cash incentive compensation reflects the relative achievement of the
strategic, financial and management objectives established by the business plan, managements responses to unforeseen circumstances or conditions that materially differ from those originally assumed, and the individual performance factors
established for the Chief Executive Officer, Chief Financial Officer and each Regional President. Annual cash incentive compensation is generally established as a range of possible awards based on a percentage of base salary. Other factors
considered include recent changes or proposed changes to base salary or other compensation elements, as well as competitive considerations. The Plan-Based Awards table is included in the Conclusions for the Year Ended December 31,
2009.



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For 2009, the Company implemented performance- and risk-based incentive compensation
matrices for the Chief Financial Officer and each Regional President, in addition to the matrix already implemented for the Chief Executive Officer. Taken together, these matrices incorporate direct relationships of the Companys principal risk
exposures and performance based on the Human Resources Committees assessments. The individual awards applicable to the Chief Financial Officer and the Northern Regional President are discussed in Conclusions for the Year Ended
December 31, 2009.

Discretionary Non-Equity Bonus. In general, the Companys business
plan assumptions include a total annual bonus payment cash pool between 10% and 20% of base salary for named executive officers other than the Chief Executive Officer, Chief Financial Officer and Regional Presidents. Provided that, if and as
applicable, the Companys overall financial performance was generally consistent with the overall projected business plan results (taking into consideration factors both within and outside of the Companys and the executive officers
control), the annual performance review process results in an award based on an assessment of the named executive officers execution of their applicable responsibilities. The Company does not use an empirical mathematical formula to determine
the amount of the actual annual cash incentive compensation for these bonuses. These individual awards are discussed in Conclusions for the Year Ended December 31, 2009.

Equity-Based Compensation. The 2006 EIP established a mechanism by which awards of restricted stock or stock options could
be utilized to further align the financial interests of employees, including the named executive officers, with stockholders and, in the future, provide an additional means to attract, retain and reward individuals who contribute to the success of
the Company. The Human Resources Committee established share ownership guidelines (as described below) for the named executive officers and other executive officers. The Human Resources Committee also considers the significant financial investment
required of a participant who retains shares granted under the 2006 EIP because such participant must pay current income tax obligations with respect to such shares without having the benefit of selling the shares to generate cash proceeds
sufficient to pay such tax liability. In addition, consistent with the purpose of aligning management financial interests with stockholder interests, the Human Resources Committee delegated to the Chief Executive Officer the authority to make grants
pursuant to and established a framework for the Chief Executive Officers implementation of the 2006 EIP for individuals other than the executive officers of the Company or the Bank. In general, the delegated authority of the Chief Executive
Officer is limited to grants to an aggregate of 120,000 restricted shares and 360,000 stock options, and to a maximum per individual of 10,000 restricted shares and 25,000 stock options.

No equity awards were granted to any named executive officer in 2009. The Human Resources Committee believes that the establishment of
equity-based compensation programs has been an important tool for the retention and attraction of qualified management talent.

Share Ownership Guidelines. In the absence of difficult personal circumstances, the Human Resources Committee encourages
the Chief Executive Officer and the other named executive officers of the Company to acquire with their own funds and hold a position in Company shares equal to 100% of the executives three-year average annual cash compensation. At
December 31, 2009, all of the Companys named executive officers met all elements of the Human Resources Committees share ownership guidelines.

401(k) Plan. The Company has a tax-qualified defined contribution retirement plan covering all of its eligible employees.
Employees are eligible to participate in the plan after attainment of age 21 and completion of six months of service. Effective April 1, 2007, the Board of Directors amended the match component of the plan to provide a fixed match in the amount
of 50% of the first 6% of compensation deferred under the plan. The Board of Directors amended the match formula after considering the significant benefit provided to all eligible employees under the Banks ESOP. The Company could also
contribute an additional amount annually at the discretion of the Board of Directors. Contributions totaling $429,164 were made to the 401(k) plan for 2009.

Employee Stock Ownership Plan and Trust. The Bank implemented the ESOP in connection with the mutual-to-stock
conversion, effective as of January 1, 2004. Employees are eligible to participate in the ESOP after the attainment of age 21 and completion of at least one year of employment. As part of the mutual-to-stock conversion, the ESOP trust borrowed
funds from the Company and used those funds to purchase 1,957,300 shares of common stock. The shares of common stock purchased by the ESOP are the collateral for the loan. The loan will be repaid principally from the Bank through discretionary
contributions to the ESOP over a period of up to 20 years. The loan documents provide that the loan may be repaid over a shorter period, without penalty for prepayments. The interest rate for the loan equals the prime rate plus 100 basis points,
adjustable every five years. Shares purchased by the ESOP are held in a suspense account for allocation among participants as the loan is repaid. The Company does not have any equity compensation program that was not approved by its stockholders,
other than its ESOP.



9



---

Contributions to the ESOP, and shares released from the suspense account in an amount
proportional to the repayment of the ESOP loan, are allocated among ESOP participants on the basis of compensation in the year of allocation. Benefits under the plan become fully vested upon completion of five years of credited service, with credit
given to participants for years of credited service with the Bank prior to the adoption of the plan. A participants interest in his or her account under the plan also fully vests in the event of termination of service due to a
participants early or normal retirement, death, disability, or upon a change of control (as defined in the plan). Vested benefits are payable in the form of shares of common stock and/or cash. Any unvested benefits will be forfeited upon
termination of employment in accordance with the terms of the ESOP. Such forfeited amounts remain in the ESOP and are reallocated to remaining participants in accordance with the terms of the ESOP. The Banks contributions to the ESOP are
discretionary, subject to the loan terms and tax law limits. The ESOP will terminate in the event of a change of control (as defined in the plan).

All Other Compensation and Perquisites.The Human Resources Committee reviews and monitors the level of other compensation
and perquisites offered to the named executive officers in the context of current business operations and general market practices.

In addition to participation in the standard life and disability insurance benefits available to all full-time employees, the Company has
historically requested the insurable named executive officers to obtain additional life, accidental death and disability insurance coverage in an amount equal to the death benefit payable under their respective employment agreements. In the event of
the death or disability of one of the participants, the obligations of the Bank or the Company, if any, under their respective employment agreements would be reduced on a dollar-for-dollar basis by the insurance proceeds received by the executive
officer or the named beneficiary under the insurance policy. In exchange, the Bank reimbursed the participant for the after-tax cost of the annual insurance premium for the additional coverage. The Banks 2007 purchase of bank-owned life
insurance insuring the lives of certain officers, including the named executive officers, enabled the Bank to immediately eliminate all but one separate life insurance policy, and the remaining policy was eliminated effective January 1, 2009.

Excluding the effects of the Banks contributions for the health, vacation, 401(k) and ESOP benefits available to all
full-time employees and the Banks reimbursement of the after-tax premium costs for additional life and disability insurance coverages, the Human Resources Committee generally believes that other compensation and perquisites should not exceed
10% of each named executive officers total annual cash compensation. The Companys perquisite policy was amended in 2007 to reflect this limitation. As of December 31, 2009, the Companys compensation practices with respect to
other compensation and perquisites met this standard.

Conclusions for Year Ended December 31, 2009

Executive Summary. The following is a brief summary of the compensation decisions the Human Resources Committee made with
respect to the named executive officers for 2009 and 2010:



| |  |  | base salaries for the named executive officers, other than the Chief Executive Officer, increased by 2.5% for 2009, and for 2010, no increase was
awarded;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | aggregate annual cash incentive payments to the named executive officers for 2009 decreased significantly from the aggregate annual cash incentives
paid for 2008; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | no equity awards were granted to any named executive officer in 2009.
| | - |  | ---------------------------------------------------------------------

Review of Chief Executive Officer. The Human Resources Committee met outside the presence of management to review
the Chief Executive Officers performance in the context of the approved business plan, and the extent to which established strategic, financial and management objectives were realized during 2009. The Human Resources Committee also evaluated
the overall state of the Companys franchise and strategic position, capabilities and direction consistent with the Chief Executive Officers execution of his leadership and planning responsibilities.

The Human Resources Committee reported that, at a meeting attended solely by committee members, it reviewed and evaluated the
self-assessment and other information provided by the Chief Executive Officer and other factors for the purpose of reviewing the Chief Executive Officers performance during 2009. The review encompassed five specific performance areas 
core earnings per share, internal controls, asset quality, marketing and business development, and leadership and planning. The Chief Executive Officers performance was rated in each category based on as assessment by the Board of Directors of
the Companys performance using both internal and external information including trends and absolute and relative performance data where applicable and pertinent. Each category was assigned a weighting that represented a percentage of the
overall composite rating. The Human Resources Committee determined that the Chief Executive Officers performance was satisfactory with respect to internal controls, marketing and business development, and leadership and planning, and noted
that the Company is well positioned to pursue any



10



---

suitable unassisted or FDIC-assisted acquisition opportunities that might arise. The Human Resources Committee further determined that, although asset quality declined on an absolute basis
(though less so on a relative basis), management responded appropriately to the asset quality challenges that were presented by economic conditions. Core earnings per share, however, were significantly below the business plan.

The matrix prepared by the Human Resources Committee with respect to the Chief Executive Officer is as follows:



|                                        |  |                                                   |         |   |                 |   |                     |                |  |   |           
|--------------------------------------- |  | ------------------------------------------------- | ------- | - | --------------- | - | ------------------- | -------------- |  | - | ----------
|COMPONENT                               |  | Weight                                            |         |   | 2009Performance |   |                     | 2009Percentage
|                                        |  |                                                   |        
|Core Earnings Per
Share(1)              |  |                                                   | 25      | % |                 |   | Significantly Below |                |  |   |   %      
|Internal Controls                       |  |                                                   | 25      |   |                 |   | Met                 |                |  |   | 10        
|Asset Quality                           |  |                                                   | 25      |   |                 |   | Below               |                |  |   | 5         
|Marketing & Business
Development(2)     |  |                                                   | 15      |   |                 |   | Met                 |                |  |   | 10        
|Leadership & Planning                   |  |                                                   | 10      |   |                 |   | Met                 |                |  |   | 10        
|                                        |  |                                                   |         |   |                 |   |                     |                |  |   |           
|Composite                               |  |                                                   | 100     | % |                 |   | Below               |                |  |   | 6.25% 
(3)
|                                        |  |                                                   |        
|CATEGORY                                |  | 2008Performance                                   |         |   | 2009Performance |   |                     | 2009 Plan     
|                                        |  | (dollars in thousands, except for
per share data)
|                                        |  |                                                   |        
|Earnings Per Share                      |  |                                                   |         |   |                 |   |                     |                |  |   |           
|Earnings (Loss) Per Share               |  | $                                                 | (0.98   | ) |                 | $ | (0.04               | )              |  | $ | 0.26      
|Core Earnings Per
Share(1)              |  |                                                   | 0.23    |   |                 |   | 0.13                |                |  |   | 0.38      
|                                        |  |                                                   |        
|Internal Controls                       |  |                                                   |         |   |                 |   |                     |                |  |   |           
|No Significant or Material Deficiencies |  |                                                   |         |   |                 |   |                     |                |  |   |           
|                                        |  |                                                   |        
|Asset Quality                           |  |                                                   |         |   |                 |   |                     |                |  |   |           
|Non-Performing Assets (NPA)             |  | $                                                 | 14,613  |   |                 | $ | 53,573              |                |  |   |           
|NPA to Total Assets                     |  |                                                   | 0.94    | % |                 |   | 3.42                | %              |  |   |           
|                                        |  |                                                   |        
|Marketing &
BusinessDevelopment(3)      |  |                                                   |         |   |                 |   |                     |                |  |   |           
|Deposit Bal. > $100,000                 |  | $                                                 | 376,020 |   |                 | $ | 488,645             |                |  |   |           
|Deposit Bal. < $100,000                 |  |                                                   | 643,343 |   |                 |   | 688,043             |                |  |   |           



|(1) | Core earnings per share represents earnings per share adjusted for the after-tax effect of equity-based compensation, the amortization of intangible expenses, gain on
VISA stock, loss on sale of securities, gain on sale of merchant processing operations, FDIC special assessment and loss on impairment of securities
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Excludes wholesale and internal deposit accounts
|--- | ------------------------------------------------

|(3) | Represents the percentage of base salary awarded as cash incentive compensation.
|--- | --------------------------------------------------------------------------------

The Human Resources Committee concluded that, based on the matrix reflected in the above table, the Chief Executive Officer was eligible
to receive cash incentive compensation. However, at the Chief Executive Officers request and by mutual consent, the Board of Directors and the Chief Executive Officer agreed that no form of incentive compensation payment would be awarded to
the Chief Executive Officer for 2009. The Human Resources Committee also noted that it would forego the standard increase to base compensation based on a cost-of-living index for all named executive officers, including the Chief Executive Officer.
The Board of Directors, with Mr. Gasior not participating, ratified the actions of the Human Resource Committee with respect to the Chief Executive Officer.



11



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Review of the Chief Financial Officer and Regional Presidents. The Human
Resources Committee met outside the presence of management to review the performance of the Chief Financial Officer and each Regional President. The Human Resources Committee noted that the Chief Executive Officer had submitted assessments of the
performance of these officers to the Human Resources Committee based on proposed non-equity short-term incentive compensation performance matrices which were established for review in 2010 but not pre-determined in 2009. The Human Resources
Committee reviewed and evaluated the information provided by the Chief Executive Officer. Because the members of the Board of Directors have had considerable interaction with the Companys Chief Financial Officer and the Regional Presidents
throughout the year, the Human Resources Committee determined that it had a strong basis to make an evaluation of the executive officers independent of the Chief Executive Officers conclusions and recommendations. The Human Resources Committee
determined to adjust certain performance conclusions based on its own assessment of responsibilities and approved non-equity short-term incentive compensation awards to the Chief Financial Officer and each Regional President. The Board of Directors,
with Mr. Gasior not participating, ratified the actions of the Human Resources Committee with respect to the other named executive officers.

The matrices prepared by the Human Resources Committee with respect to the Chief Financial Officer and the Northern Regional President
are as follows:

Chief Financial Officer



|                              |  |        |   |  |                     |  |                |  
|----------------------------- |  | ------ | - |  | ------------------- |  | -------------- | -
|COMPONENT                     |  | Weight |   |  | 2009Performance     |  | 2009Percentage |  
|                              |  |        |  
|Core Earnings Per Share(1)    |  | 5      | % |  | Significantly Below |  |               | %
|Internal Controls             |  | 25     |   |  | Met                 |  | 10             |  
|Asset Quality (Securities)(2) |  | 30     |   |  | Below               |  | 5              |  
|Liquidity & Interest Rate     |  | 30     |   |  | Met                 |  | 10             |  
|Leadership & Planning         |  | 10     |   |  | Met                 |  | 10             |  
|                              |  |        |   |  |                     |  |                |  
|Composite                     |  | 100    | % |  | Below               |  | 8.00           | %
|                             
|Northern Regional President   | 
|COMPONENT                     |  | Weight |   |  | 2009Performance     |  | 2009Percentage |  
|                              |  |        |  
|Customer Service              |  | 25     | % |  | Met                 |  | 10             | %
|Asset Quality(1)              |  | 25     |   |  | Below               |  | 5              |  
|Loan Growth(2)                |  | 15     |   |  | Below               |  | 5              |  
|Deposit Growth(2)             |  | 15     |   |  | Met                 |  | 10             |  
|Internal Growth               |  | 10     |   |  | Met                 |  | 10             |  
|Leadership & Planning         |  | 10     |   |  | Met                 |  | 10             |  
|                              |  |        |   |  |                     |  |                |  
|Composite                     |  | 100    | % |  | Below               |  | 8.00           | %



|(1) | Information provided in the Chief Executive Officer matrix.
|--- | -----------------------------------------------------------

|(2) | The Human Resource Committees review was based on information provided in our audited financial statements. Such results were reviewed generally but were not
compared to predetermined numerical criteria.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Review of Other Named Executive Officers. The Human
Resources Committee met outside the presence of management to review the performance of the other named executive officers of the Company. The Human Resources Committee noted that the Chief Executive Officer had submitted assessments of the
performance of the other named executive officers of the Company to the Human Resources Committee. The Human Resources Committee reviewed and evaluated the information provided by the Chief Executive Officer. Because the members of the Board of
Directors have had considerable interaction with the Companys other named executive officers throughout the year, the Human Resources Committee determined that it had a strong basis to make an evaluation of the executive officers independent
of the Chief Executive Officers conclusions and recommendations. The Human Resources Committee concurred with the Chief Executive Officers conclusions and recommendations. The Board of Directors, with Mr. Gasior not participating,
ratified the actions of the Human Resources Committee with respect to the other named executive officers.



12



---

Reasonableness of Compensation

After considering all components of the compensation program for the named executive officers, the Human Resources Committee has
determined that such compensation is reasonable and appropriate.

In making this determination, the Human Resources Committee
considered many factors, including the following:



| |  |  | management has positioned the Company for future success through the planning and execution of the strategic, financial and management objectives of
the Companys business plan;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the Company is increasingly well positioned in the communities it serves as a result of managements focus and execution of the Companys
community bank mission; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | no element of the Banks compensation practices is reasonably likely to have a material adverse effect on the Companys financial condition.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------

Tax and Accounting Treatment

Section 162(m) of the Internal Revenue Code.Section 162(m) of the Internal Revenue Code limits the tax deduction
to $1 million for compensation paid to certain executive officers of public companies. The limitations on the deductibility of executive compensation imposed under Section 162(m) did not affect the Company during 2009 because the compensation
paid to the Companys executive officers in 2009 did not exceed these limitations. The 2006 EIP provides the Human Resources Committee with flexibility to address issues that may arise under Section 162(m), and contains provisions that
could be utilized to reduce its potential adverse effects.

Code Section 409A.The Human Resources
Committee has monitored regulatory developments under Section 409A of the Internal Revenue Code, which was enacted as part of the American Jobs Creation Act of 2004 and deals with specific tax rules for non-qualified deferred compensation
plans. The Company previously revised certain provisions in its employment agreements with the Chief Executive Officer, the other named executive officers and certain other officers to address Section 409A and the final Treasury Regulations
under Section 409A. The 2006 EIP provides the Human Resources Committee with flexibility to address issues that may arise under Section 409A, and contains provisions that could be utilized to reduce its potential adverse effects.

Other Taxation Issues.The Human Resources Committee believes that, as the Companys compensation
structures become more complex, the effects of the alternative minimum tax and other taxation issues could affect the net intended effect of the Companys compensation plans. Although no specific action is warranted at this time, the Human
Resources Committee intends to monitor the effects of the alternative minimum tax and other taxation issues on the Company and its directors, officers and associates when evaluating various compensation principles, practices and plans.

Accounting for Stock-Based Compensation. Accounting Standards Codification Topic No. 718, Compensation-Stock
Compensation (ASC Topic 718), requires companies to record the compensation cost for stock options, restricted stock and other equity-based compensation arrangements that are provided to employees in return for employment service. The
cost is based on the grant date fair value, and this cost is expensed over the requisite service period, which is normally the vesting period of the award. ASC Topic 718 applies to awards granted or modified in years beginning in 2006 and thus
applies to awards granted pursuant to the 2006 EIP. The Human Resources Committee evaluates the potential adverse impact of ASC Topic 718 on future compensation expense when determining the size and types of awards to be granted under the 2006 EIP.

HUMAN RESOURCES COMMITTEE REPORT

We have reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on our review and discussion
with management, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Annual Report on Form 10K/A and in BankFinancial Corporations Annual Report on Form 10-K for the year ended
December 31, 2009.

This report has been provided and is respectfully submitted by the Human Resources Committee:

Joseph A. Schudt, Chairman

Cassandra J. Francis

Sherwin R. Koopmans

Terry R. Wells



13



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EXECUTIVE COMPENSATION

The following table sets forth information concerning the compensation of the Companys Chief Executive Officer, Chief Financial
Officer and the Companys other three most highly compensated executive officers who served in such capacities during 2009:

Summary
Compensation Table



|                                                                                  |  |               |  |        |                        |                               |   |                                               |  |                 |                     |                          |   |                   |  |   |                     |  |   |                       
|--------------------------------------------------------------------------------- |  | ------------- |  | ------ | ---------------------- | ----------------------------- | - | --------------------------------------------- |  | --------------- | ------------------- | ------------------------ | - | ----------------- |  | - | ------------------- |  | - | ----------------------
|Name and Principal Position                                                       |  | Year          |  | Salary |                        | Discre-tionaryNon-EquityBonus |   | Non-EquityIncentiveShort-Term
Compensation(1) |  | OptionAwards(2) |                     | All
OtherCompensation(3) |   | TotalCompensation
|                                                                                  |  |               |  |        |                        |                               |  
|F. Morgan GasiorChairman of the Board, Chief Executive Officer and President      |  | 20092008
2007 |  | $      | 403,520395,906
395,906 |                               | $ | 
                                          |  | $               | 49,488
60,000      |                          | $ |                |  | $ | 42,61042,615
57,986 |  | $ | 446,130488,009
513,892
|                                                                                  |  |               |  |        |                        |                               |  
|Paul A. CloutierExecutive Vice President and Chief Financial Officer              |  | 20092008
2007 |  | $      | 257,588251,417
247,046 |                               | $ | 
                                          |  | $               | 20,72436,000
36,000 |                          | $ | 3,840
          |  | $ | 43,23542,588
51,413 |  | $ | 321,547333,845
334,459
|                                                                                  |  |               |  |        |                        |                               |  
|James J. BrennanExecutive Vice President, Corporate Secretary and General Counsel |  | 20092008
2007 |  | $      | 308,224300,840
295,610 |                               | $ | 50,00060,000
56,000                           |  | $               |                  |                          | $ | 42,189
         |  | $ | 37,66143,821
54,563 |  | $ | 395,885446,850
406,173
|                                                                                  |  |               |  |        |                        |                               |  
|Christa N. CalabreseRegional President                                            |  | 20092008
2007 |  | $      | 225,530220,127
216,300 |                               | $ | 
                                          |  | $               | 18,14520,000
28,000 |                          | $ | 2,987
          |  | $ | 32,00233,636
43,191 |  | $ | 275,677276,750
287,491
|                                                                                  |  |               |  |        |                        |                               |  
|Gregg T. AdamsExecutive Vice President, Marketing and Sales                       |  | 2009          |  | $      | 221,678                |                               | $ | 22,500                                        |  | $               |                    |                          | $ |                  |  | $ | 30,959              |  | $ | 275,137               



|(1) | In 2008, Messrs. Gasior and Cloutier, and Ms. Calabrese elected to receive stock options in lieu of cash under the 2007 management incentive plan. The number of
stock options received had a grant date fair value (calculated according to the Companys ASC Topic 718 expense for the stock options) equal to the amount of the cash incentive compensation foregone. In addition, stock options equal to 10% of
the stock options received in lieu of the cash incentive award were granted to compensate for the additional market risk associated with the stock option awards (with the exception of the Chief Executive Officer). On February 26, 2008, stock
options were granted to the named executive officers, except for Mr. Brennan, in lieu of cash.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The amounts set forth in the Stock Awards column and the Option Awards column reflect the aggregate grant date fair value of stock and option
awards for the years ended December 31, 2009, 2008, and 2007 in accordance with ASC Topic 718. As required under SEC rules, the amounts recognized for the February 26, 2008 stock options granted at the election of the named executive
officers in lieu of the 2007 cash bonus are excluded under this column and reported as Bonus in the Bonus column.However, the additional stock options equal to 10% of the stock options in lieu of cash are reflected under these
columns. The assumptions used in calculating these amounts are set forth in Note 13 of the Notes to Consolidated Financial Statements contained in our Annual Report on Form 10-K filed with the SEC on March 8, 2010.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | All other compensation for the named executive officers during fiscal 2009 is summarized below.
|--- | -----------------------------------------------------------------------------------------------



|                     |  |                |        |               |   |                         |  |             |       |                      |   |                               |  |   |        |  |   |       
|-------------------- |  | -------------- | ------ | ------------- | - | ----------------------- |  | ----------- | ----- | -------------------- | - | ----------------------------- |  | - | ------ |  | - | ------
|Name                 |  | Perquisites(i) |        | Insurance(ii) |   | Tax 
Reimbursement(iii) |  | 401(k)Match |       | ESOPContribution(iv) |   | Total All OtherCompensation
|F. Morgan Gasior     |  | $              | 19,200 |               | $ | 1,676                   |  | $           | 1,003 |                      | $ | 6,125                         |  | $ | 14,606 |  | $ | 42,610
|Paul A. Cloutier     |  | $              | 18,600 |               | $ | 1,676                   |  | $           | 1,003 |                      | $ | 7,350                         |  | $ | 14,606 |  | $ | 43,235
|James J. Brennan     |  | $              | 13,026 |               | $ | 1,676                   |  | $           | 1,003 |                      | $ | 7,350                         |  | $ | 14,606 |  | $ | 37,661
|Christa N. Calabrese |  | $              | 7,568  |               | $ | 1,550                   |  | $           | 928   |                      | $ | 7,350                         |  | $ | 14,606 |  | $ | 32,002
|Gregg T. Adams       |  | $              | 6,600  |               | $ | 1,503                   |  | $           | 900   |                      | $ | 7,350                         |  | $ | 14,606 |  | $ | 30,959



Footnotes on following page.



14



---

|(i) | Includes use of an automobile or an automobile allowance, and in the case of Messrs. Gasior, Cloutier and Brennan, club dues.
|--- | -----------------------------------------------------------------------------------------------------------------------------

|(ii) | Consists of premiums paid by the Company during the fiscal year with respect to additional short- and long-term disability insurance for each named executive officer.
Certain amounts were paid by the executive and reimbursed by the Company under employment agreement provisions that reduce, on a dollar-for-dollar basis, the Banks obligations under such executives employment agreement in the event of
the executives death or disability by the amount of insurance proceeds received by the executives named beneficiary.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) | Reflects reimbursement for income and employment taxes incurred by the executive as a result of the insurance premiums paid by the executive and reimbursed by the
Company. See note (ii) above and discussion below for additional information.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iv) | Includes the Banks contribution to the executives ESOP account plus any amounts reallocated as a result of forfeitures by terminated ESOP participants.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

Plan-Based Awards. The following table sets forth for the year ended December 31,
2009 certain information as to grants of plan-based awards for the named executive officers under the terms of the Executive Incentive Compensation Plan. For the year ended December 31, 2009, payments were paid in March 2010 in the amounts
listed in the Summary Compensation Table.



|                     |  |            |  |                                                                  |   |        |   |         |  |   |       
|-------------------- |  | ---------- |  | ---------------------------------------------------------------- | - | ------ | - | ------- |  | - | ------
|                     |  |            |  | Estimated Future Payouts Under Non-Equity Incentive Plan 
Awards
|                     |  | Grant Date |  | Threshold                                                        |   | Target |   | Maximum
|F. Morgan Gasior     |  | (1)        |  | $                                                                |  |        | $ | 40,580  |  | $ | 81,161
|Paul A .Cloutier     |  | (1)        |  | $                                                                |  |        | $ | 25,905  |  | $ | 51,809
|James J. Brennan     |  |            |  | $                                                                |  |        | $ | 30,997  |  | $ | 61,994
|Christa N. Calabrese |  | (1)        |  | $                                                                |  |        | $ | 22,681  |  | $ | 45,361
|Gregg T. Adams       |  |            |  | $                                                                |  |        | $ | 22,500  |  | $ | 45,000



|(1) | On an annual basis, Messrs. Gasior and Cloutier, and Ms. Calabrese are eligible to receive incentive cash bonuses under the Executive Incentive Compensation Plan.
Messrs. Brennan and Adams do not participate in the plan.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information concerning the exercisable and unexercisable stock options and unvested shares of restricted
stock at December 31, 2009 held by the individuals named in the summary compensation table.



|                     |  |                                                        |  |                                                              |  |                         |                  |                       |                           |                                                   |        |                                                                   |   |        
|-------------------- |  | ------------------------------------------------------ |  | ------------------------------------------------------------ |  | ----------------------- | ---------------- | --------------------- | ------------------------- | ------------------------------------------------- | ------ | ----------------------------------------------------------------- | - | -------
|                     |  | Option Awards                                          |  | Stock Awards                                                
|Name                 |  | # of SecuritiesUnderlyingUnexercisedOptionsExercisable |  | # of
SecuritiesUnderlyingUnexercised OptionsUnexercisable(1) |  | OptionExercisePrice ($) |                  | OptionExpiration Date |                           | # of Sharesor Units ofStock ThatHave
NotVested(2) |        | Market Value ofShares or Units ofStock That HaveNot Vested
($)(3)
|F. Morgan Gasior     |  | 100,000                                                |  | 25,000                                                       |  | $                       | 17.62            |                       | 9/5/2011                  |                                                   | 25,000 |                                                                   | $ | 247,500
|                     |  | 75,000                                                 |  |                                                              |  |                         | 17.62            |                       | 9/5/2011                  |                                                   |        |                                                                   |   |        
|                     |  | 100,000                                                |  |                                                              |  |                         | 14.82            |                       | 9/5/2011                  |                                                   |        |                                                                   |   |        
|Paul A. Cloutier     |  | 68,00060,000
6,000                                     |  | 17,000                                                       |  | $                       | 17.6214.82
14.82 |                       | 9/5/20119/5/2011
9/5/2011 |                                                   | 5,000  |                                                                   | $ | 49,500 
|James J. Brennan     |  | 68,00080,667                                           |  | 17,000                                                       |  | $                       | 17.6214.82       |                       | 9/5/20119/5/2011          |                                                   | 5,000  |                                                                   | $ | 49,500 
|Christa N. Calabrese |  | 68,00046,667
4,667                                     |  | 17,000                                                       |  | $                       | 17.6214.82
14.82 |                       | 9/5/20119/5/2011
9/5/2011 |                                                   | 5,000  |                                                                   | $ | 49,500 
|Gregg T. Adams       |  | 68,000                                                 |  | 17,000                                                       |  | $                       | 17.62            |                       | 9/5/2011                  |                                                   | 4,400  |                                                                   | $ | 43,560 



|(1) | The remaining options are scheduled to vest on December 15, 2010.
|--- | -----------------------------------------------------------------

|(2) | The remaining restricted shares are scheduled to vest on December 15, 2010.
|--- | ---------------------------------------------------------------------------

|(3) | The market value of shares is based on a closing stock price of $9.90 on December 31, 2009.
|--- | -------------------------------------------------------------------------------------------



15



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Option Exercises and Stock Vested During 2009

The following table reflects shares of restricted stock held by the named executive officers that vested during 2009. No options were
exercised by the named executive officers during 2009.



|                     |  |                                |  |                                   |        
|-------------------- |  | ------------------------------ |  | --------------------------------- | -------
|                     |  | Stock Awards                  
|Name                 |  | # of SharesAcquired 
onVesting |  | Value Realized on Vesting 
($)(1)
|F. Morgan Gasior     |  | 25,000                         |  | $                                 | 254,250
|Paul A. Cloutier     |  | 5,000                          |  | $                                 | 50,850 
|James J. Brennan     |  | 5,000                          |  | $                                 | 50,850 
|Christa N. Calabrese |  | 5,000                          |  | $                                 | 50,850 
|Gregg T. Adams       |  | 4,400                          |  | $                                 | 44,748 



|(1) | Reflects amounts realized on December 15, 2009 at a closing stock price of $10.17.
|--- | ----------------------------------------------------------------------------------

Potential Payments Upon Termination or Change of Control

The following table sets forth information concerning potential payments and benefits under the Companys compensation programs and
benefit plans to which the named executive officers would be entitled upon a termination of employment as of December 31, 2009. As is more fully described below, the named executive officers entered into employment agreements with the Company
and/or the Bank, as applicable (each, an Employment Agreement), which provide for payments and benefits to a terminating executive officer following a termination other than for cause or by resignation. In addition, award
agreements under the 2006 EIP (the Award Agreements) provide for the accelerated vesting of unvested awards in similar circumstances, and in addition, upon the occurrence of a change of control of the Company. Except for the payments and
benefits provided by the Employment Agreements and the Award Agreements, all other payments and benefits provided to any named executive officer upon termination of his or her employment are the same as the payments and benefits provided to other
eligible executives of the Bank. For purposes of estimating the value of certain equity awards, the Company has assumed a price per share of the Companys common stock of $9.90, which was the closing price of the Companys common stock on
December 31, 2009, the last trading day of the year.



|                     |  |                                                         |  |                         |   |                            |   |               |  |                   |           |              |   |                      |  |   |           |  |   |         |  |   |          
|-------------------- |  | ------------------------------------------------------- |  | ----------------------- | - | -------------------------- | - | ------------- |  | ----------------- | --------- | ------------ | - | -------------------- |  | - | --------- |  | - | ------- |  | - | ---------
|Executive            |  | Potential PaymentsUpon Termination or
Change of Control |  | Termination by the Bank |   | Other Types of Termination |   |              
|                     |  | ForCause                                                |  | ForDisability(1)        |   | WithoutCause(2)            |   | ByResignation |  | For GoodReason(2) |           | UponDeath(1) |   | Change ofControl
(3)
|F. Morgan Gasior     |  | Cash payments                                           |  | $                       |  |                            | $ | 968,789       |  | $                 | 1,365,689 |              | $ |                     |  | $ | 1,365,689 |  | $ | 968,789 |  | $ | 1,365,689
|                     |  | Accelerated Equity Awards                               |  |                         |  |                            |   | 247,500       |  |                   | 247,500   |              |   |                     |  |   | 247,500   |  |   | 247,500 |  |   | 247,500  
|                     |  | Continued Benefits                                      |  |                         |  |                            |   | 13,690        |  |                   | 18,253    |              |   |                     |  |   | 18,253    |  |   | 13,690  |  |   | 18,253   
|Paul A. Cloutier     |  | Cash payments                                           |  | $                       |  |                            | $ | 622,923       |  | $                 | 892,125   |              | $ |                     |  | $ | 892,125   |  | $ | 622,923 |  | $ | 892,125  
|                     |  | Accelerated Equity Awards                               |  |                         |  |                            |   | 49,500        |  |                   | 49,500    |              |   |                     |  |   | 49,500    |  |   | 49,500  |  |   | 49,500   
|                     |  | Continued Benefits                                      |  |                         |  |                            |   | 21,557        |  |                   | 28,742    |              |   |                     |  |   | 28,742    |  |   | 21,557  |  |   | 28,742   
|James J. Brennan     |  | Cash payments                                           |  | $                       |  |                            | $ | 758,855       |  | $                 | 1,178,213 |              | $ |                     |  | $ | 1,178,213 |  | $ | 758,855 |  | $ | 1,178,213
|                     |  | Accelerated Equity Awards                               |  |                         |  |                            |   | 49,500        |  |                   | 49,500    |              |   |                     |  |   | 49,500    |  |   | 49,500  |  |   | 49,500   
|                     |  | Continued Benefits                                      |  |                         |  |                            |   | 18,834        |  |                   | 25,111    |              |   |                     |  |   | 25,111    |  |   | 18,834  |  |   | 25,111   
|Christa N. Calabrese |  | Cash payments                                           |  | $                       |  |                            | $ | 538,793       |  | $                 | 759,452   |              | $ |                     |  | $ | 759,452   |  | $ | 538,793 |  | $ | 759,452  
|                     |  | Accelerated Equity Awards                               |  |                         |  |                            |   | 49,500        |  |                   | 49,500    |              |   |                     |  |   | 49,500    |  |   | 49,500  |  |   | 49,500   
|                     |  | Continued Benefits                                      |  |                         |  |                            |   | 10,236        |  |                   | 13,648    |              |   |                     |  |   | 13,648    |  |   | 10,236  |  |   | 13,648   
|Gregg T. Adams       |  | Cash payments                                           |  | $                       |  |                            | $ | 306,948       |  | $                 | 306,948   |              | $ |                     |  | $ | 306,948   |  | $ | 306,948 |  | $ | 306,948  
|                     |  | Accelerated Equity Awards                               |  |                         |  |                            |   | 43,560        |  |                   | 43,560    |              |   |                     |  |   | 43,560    |  |   | 43,560  |  |   | 43,560   
|                     |  | Continued Benefits                                      |  |                         |  |                            |   | 7,605         |  |                   | 7,605     |              |   |                     |  |   | 7,605     |  |   | 7,605   |  |   | 7,605    



Footnotes on following page.



16



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|(1) | For each named executive officer, except Mr. Adams, cash payments include an amount equal to the average cash incentive compensation paid during the preceding two
years prorated for the year of termination, prorated employer matching 401(k) contribution for the year of termination, and the base salary the executive would have received from the date of termination through the end of his/her employment period.
The cash payments for Mr. Adams includes a prorated annual cash incentive compensation for the year of termination, prorated employer matching 401(k) contribution for the year of termination, and the base salary he would have received from the
date of termination through the end of his employment period. Accelerated equity awards reflect the intrinsic value of unvested outstanding equity awards based on the closing stock price on December 31, 2009 of $9.90. Continued benefits reflect
the incremental cost of core benefits to the Company during the executives remaining employment period based on actual cost for 2009. Excludes any reduction in benefit as a result of disability insurance or federal social security disability
payments.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | For each named executive officer, except Mr. Adams, cash payments include an amount equal to the average cash incentive compensation paid during the preceding two
years prorated for the year of termination, prorated employer matching 401(k) contribution, and three times the executives three-year average cash compensation. The cash payments for Mr. Adams includes a prorated annual cash incentive
compensation for the year of termination, prorated employer matching 401(k) contribution for the year of termination, and the base salary he would have received from the date of termination through the end of his employment period. Accelerated
equity awards reflect the intrinsic value of unvested outstanding equity awards based on the closing stock price on December 31, 2009 of $9.90. Continued benefits reflect the incremental cost of core benefits to the Company for 36 months based
on the actual cost for 2009, except for Mr. Adams, whose continued benefits reflect the incremental cost of core benefits to the Company during his remaining employment period.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | The payments reflected in this column assume the executive terminated for good reason in connection with a change of control. For each named executive officer, except
Mr. Adams, cash payments include an amount equal to the average cash incentive compensation paid during the preceding two years prorated for the year of termination, prorated employer matching 401(k) contribution, and three times the
executives three-year average cash compensation. The cash payments for Mr. Adams includes a prorated annual cash incentive compensation for the year of termination, prorated employer matching 401(k) contribution for the year of
termination, and the base salary he would have received from the date of termination through the end of his employment period. Accelerated equity awards reflect the intrinsic value of unvested outstanding equity awards based on the closing stock
price on December 31, 2009 of $9.90. Continued benefits reflect the incremental cost of core benefits to the Company for 36 months based on the actual cost for 2009, except for Mr. Adams, whose continued benefits reflect the incremental
cost of core benefits to the Company during his remaining employment period. If applicable, executive severance benefits are reduced to avoid constituting an excess parachute payment under Section 280G of the Internal Revenue Code.
No reduction in benefits was required as of the assumed December 31, 2009 termination date.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Accrued
Pay and Regular Retirement Benefits. The amounts shown in the table on the previous page do not include payments and benefits to the extent they are provided on a non-discriminatory basis to salaried employees generally upon termination of
employment. These include:



| |  |  | Accrued but unpaid salary and vacation pay.
| | - |  | -------------------------------------------



| |  |  | Distributions of plan balances under the Banks 401(k) plan and its ESOP. See 401(k) Plan and Employee Stock Ownership Plan and
Trust for an overview of the 401(k) and the ESOP.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The value of option continuation upon retirement, death or disability. Except as may be provided in connection with a change of control, when an
employee terminates employment other than for cause and prior to retirement, death or disability, his or her vested stock options will remain exercisable for a period of three months following termination. When an employee is terminated for cause,
his or her stock options, whether vested or unvested, are terminated immediately. When a retirement-eligible employee terminates employment, or when an employee dies or becomes disabled, his or her vested stock options remain exercisable for 12
months following the date of his or her termination.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Acceleration of Vesting Upon a Change of
Control. Upon the occurrence of a change of control of the Company, unless otherwise stated in an award agreement, all outstanding options and Stock Appreciation Rights (SARs) then held by a participant, including each of the
named executive officers, who is employed by, or providing services to, the Company or its subsidiaries at the time of such change of control will become fully exercisable and all stock awards or cash incentive awards shall be fully earned and
vested. Any such options or SARs, the vesting of which is accelerated upon the occurrence of a change of control, shall remain exercisable in accordance with their terms. The Company has not awarded any SARs under the 2006 EIP.

Employment Agreements. The employment agreements with Messrs. Gasior, Cloutier, Brennan, and Adams and
Ms. Calabrese were amended and restated in May 2008, principally to ensure compliance with Section 409A of the Internal Revenue Code. Each employment agreement had an initial term of 36 months, except Mr. Adams had an initial term of
24 months, that can be extended each year for an additional year, at the discretion of the Board of Directors.

The Board of Directors of the Bank most recently reviewed the Banks employment agreements with
Messrs. Gasior, Cloutier, Brennan and Adams, and Ms. Calabrese in March 2010. The Board of Directors approved the extension of the terms of the Banks employment agreements with Messrs. Gasior, Cloutier, and Brennan, and Ms. Calabrese
through March 31, 2013, and the extension of the Banks employment agreement with Mr. Adams through March 31, 2012.



17



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Under the employment agreements, the Bank will pay the executive officers the base salary
reflected in the payroll records, subject to discretionary increases by the Board of Directors. The 2009 base salaries for Messrs. Gasior, Cloutier, Brennan and Adams were $405,804, $259,046, $309,969 and $225,000, respectively, and the 2009 base
salary for Ms. Calabrese was $226,807. The employment agreements provide that the base salary may be increased but not decreased. The employment agreements also provide that the executive officer will receive the use of an automobile or an
automobile allowance and the payment of designated club dues, provided that, in a given year, these payments may not, in the aggregate, exceed ten percent of the executive officers cash compensation. The employment agreements further provide
that the executive officer is entitled to participate with other executive officers in non-equity short-term incentive compensation and discretionary non-equity bonuses declared by the Board. In addition to base salary and bonus, the employment
agreements provide for, among other things, participation in a Section 125 cafeteria plan, group medical, dental, vision, disability and life insurance plans, referred to as the core plans, 401(k) plan, the ESOP and other employee and fringe
benefits applicable to executive personnel.

During the employment period, each executive officer is provided with a
supplemental disability insurance policy that pays 60% of base salary for the remaining term of the agreement in the event the executive officer is terminated due to disability. If an executive officer becomes disabled, his or her base salary will
be reduced proportionately by the disability payments made under the disability policy and under the federal social security system. Each executive officer is responsible for paying the premiums but receives an annual allowance in an amount
sufficient, on an after-tax basis, to equal the premium payments. In the event of termination of employment due to disability, the executive officer will be entitled to his or her earned salary, an amount equal to the annual average of any cash
incentive compensation and bonus that the executive officer received during the preceding two fiscal years, except for Mr. Adams who would receive an amount equal to the cash incentive compensation he would receive during the current
year. The executive officer will receive the prorated employer matching 401(k) plan contribution that the executive officer would be entitled to receive for the current year. In addition, the executive officer will be entitled to the base salary the
executive officer would have been paid through the date the employment period would have expired if the executive officers employment had not been sooner terminated due to disability, which will be reduced on a dollar-for-dollar basis by the
disability insurance and federal social security disability payments referenced above, and continued coverage under the core plans through the date the employment period would have expired, subject to the executive officers continued payment
of the costs and contributions for which he or she is responsible. After their continued coverage under the core plans expires, Messrs. Gasior, Cloutier, Brennan, and Adams and Ms. Calabrese may elect to continue their health care coverage at
their sole expense and without any cost to the Bank until they become eligible for Medicare coverage or for coverage under another employers group health plan.

In addition to the life insurance benefits provided to regular full-time employees, a supplemental life insurance policy was historically
provided to each insurable executive officer in an amount not less than three times the executive officers base salary. In May 2007, the Bank purchased bank-owned life insurance insuring the lives of certain officers, including the executive
officers. The purchase of bank-owned life insurance enabled the Bank to eliminate the separate life insurance policies on all executive officers except Mr. Gasior in 2007, and on Mr. Gasior on January 1, 2009.

In the event the executive officers employment is terminated due to death, his or her surviving spouse and minor children, if any,
will be entitled to the same coverage under the core plans that the executive officer would have been provided if his or her employment had terminated due to disability. In addition, the executive officers estate or trust, as applicable, will
be entitled to the base salary the executive officer would have been paid through the date the employment period would have expired if the executive officers employment had not been sooner terminated due to death. If a supplemental life
insurance policy has been obtained on the life of the executive officer the Banks obligation to make such payments will be reduced on a dollar-for-dollar basis by the death benefit payments under any supplemental life insurance policy
purchased for an executive officer. Except with respect to continued coverage under the core plans and the ability to elect to continue health care coverage under the core plans for an additional period at no cost to the Bank, the Bank will
generally have no obligation to pay or provide an executive officers estate, surviving spouse, or minor children with any other compensation or benefits on account of the executive officers death.

In the event the executive officers employment is terminated without cause by the Bank, the executive officer will receive his or
her earned salary, prorated incentive compensation, accrued plan contribution, continued coverage under the core plans for 36 months, except for Mr. Adams, whose continued coverage would be during the remaining employment period, subject to the
executive officers payment of costs and contributions for which he or she is responsible, the ability to continue health care coverage thereafter at his or her sole expense, and an amount equal to three times his or her average annual
compensation, with the exception of Mr. Adams who would be paid his base salary from the effective date of termination through the date the employment period would have expired. Payment of benefits will be made in a single lump sum, except for
Mr. Adams will be made in equal installments.

Under the employment agreements, the executive officer may terminate
his or her employment for Good Reason by giving notice within 60 days after the event giving rise to the right to terminate employment. Good Reason generally includes (i) the Banks



18



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decision not to re-elect or failure to re-elect the executive officer to his or her present position; (ii) with the exception of Mr. Adams, the Banks failure to extend the
executive officers employment period on the anniversary date for an additional year; (iii) the relocation of the executive officers principal place of employment by more than a specified distance; (iv) the reduction in the
executive officers base salary or a material reduction in benefits to which the executive officer is entitled; (v) the liquidation or dissolution of the Bank or the Company; (vi) the Banks material uncured breach of the
employment agreement; and (vii) with the exception of Mr. Adams, the occurrence of a Change of Control as such term is defined in the 2006 EIP. With respect to Mr. Gasiors employment agreement, Good
Reason also includes the failure to elect or re-elect him as Chairman of the Board of Directors of the Bank, a change in the composition of the Board of Directors of the Bank such that the current directors no longer constitute a majority of
the board other than in certain circumstances where the new board is nominated or appointed by the existing board, or a significant reduction in the scope of his duties, powers, privileges, authority or responsibilities. In the event an executive
officers employment is terminated for Good Reason, he or she will receive the same amounts, the same coverage under the core plans and the same health insurance coverage continuation rights that he or she would have received if his or her
employment had been terminated without cause. An executive officer who terminates his or her employment by resignation other than due to Good Reason will only be entitled to his or her earned salary and vacation through the date of termination.

The executive officer is required under the employment agreement to execute a general release in consideration for any
severance amounts. The executive officer also agrees not to compete with the Bank or its affiliates for six months after termination or during the period that severance amounts are paid, if longer. In addition, the executive officer agrees not to
solicit the Banks customers, their business or the Banks employees for eighteen months, which may be reduced in certain circumstances. Payment of amounts due the executive officers under the employment agreements will generally be made
in a single lump sum, or in the case of Mr. Adams in equal installments with the exception upon death and will be reduced as may be necessary to avoid constituting an excess parachute payment under Section 280G of the Internal
Revenue Code.

In October 2008, the Company entered into employment agreements with Messrs. Gasior, Cloutier and Brennan. The
employment agreements have three-year terms and, except as discussed below, are otherwise substantially similar to the respective employment agreements that these individuals have with the Bank. The Board of Directors of the Company most recently
reviewed the Companys employment agreements with Messrs. Gasior, Cloutier and Brennan and approved the extension of their terms through March 31, 2013.

The Company does not separately compensate Messrs. Gasior, Cloutier or Brennan for their services to the Company, except for awards made
by the Company under the 2006 EIP. Instead, the Bank pays and provides their cash compensation and benefits (other than benefits under the 2006 EIP), and allocates a portion of this expense to the Company pursuant to an intercompany expense sharing
arrangement in proportion to the time and services that they provide to the Company. The employment agreements between the Company and Messrs. Gasior, Cloutier and Brennan thus provide that any cash compensation and benefits that become
simultaneously due under both their employment agreements with the Company and their employment agreements with the Bank will be subtracted from those due Messrs. Gasior, Cloutier and Brennan under their respective employment agreements with the
Company. The payments and benefits (other than benefits under the 2006 EIP) that each of Messrs. Gasior, Cloutier and Brennan will receive under his employment agreement with the Company if his employment is terminated without cause, for Good Reason
or due to death or disability are the same as those provided for in their respective employment agreements with the Bank.

The
primary material differences between the Companys employment agreements with Messrs. Gasior, Cloutier and Brennan and their respective employment agreements with the Bank are that their employment agreements with the Company provide for
indemnification under Maryland law (the Companys state of incorporation) rather than applicable federal law, and further provide that, upon the termination of employment based on the occurrence of a Change of Control as that term is defined in
the 2006 EIP, (i) all payments that would otherwise be payable in a series of installments instead will generally be paid in a single lump sum within five business days of the date of termination; (ii) the restricted periods applicable to
the non-competition and non-solicitation covenants set forth in their respective employment agreements with the Company and their employment agreements with the Bank will be reduced to six months and the scope of the competitive restrictions will be
limited to those that existed immediately prior to the Change of Control; and (iii) all obligations that may become due simultaneously under both the Companys employment agreements with Messrs. Gasior, Cloutier and Brennan and their
respective employment agreements with the Bank will first be provided under their employment agreements with the Company. The Company employment agreements do not impose a limit on the compensation that would be payable to Messrs. Gasior, Cloutier
or Brennan upon the occurrence of a Change of Control to avoid an excess parachute payment under Section 280G of the Internal Revenue Code. However, the payments and benefits that would become due to Messrs. Gasior, Cloutier and
Brennan upon the occurrence of a Change of Control currently would not result in any excess parachute payments based on their current and historic compensation levels and the relevant terms of their Company employment agreements.



19



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Compensation of Directors

Directors Fees. All directors of the Company are also directors of the Bank. Except for Mr. Gasior, who receives
no fees for serving as a director, committee chairperson or committee member, the directors of the Bank received an annual Board fee of $2,000 per month for preparing for and attending meetings of the Board of Directors of the Bank during 2009.
Except for the Audit Committee, the Bank did not pay its directors a separate fee during 2009 for serving on board committees. The members of the Audit Committee were paid an Audit Committee fee during 2009 because the Audit Committee is a required
entity with separate responsibilities established by applicable laws and regulations. During 2009, the Bank paid an Audit Committee fee of $1,000 per quarter to Mr. Hausmann (the Chairman of the Audit Committee), and $800 per quarter to
Mr. Wells (a member of the Audit Committee).

The Company did not separately compensate the members of its Board of
Directors during 2009 for preparing for and attending meetings of the Board of Directors of the Company. A portion of the Board fees that the Bank paid to its directors, however, was allocated to the Company in the intercompany expense allocations
that were made between the Company and the Bank during 2009. The Company paid an Audit Committee fee of $800 per quarter to Mr. Koopmans during 2009 for serving on the Companys Audit Committee, but did not compensate the other members of
the Audit Committee due to the Audit Committee fee that they received from the Bank. The Company also partially reimbursed Mr. Koopmans for his travel expenses for attending meetings of the Companys Board of Directors.

Due to the limited number of stock options remaining under the 2006 EIP, the Board of Directors, acting on the recommendation of the
Human Resources Committee, reinstated the $24,000 annual cash Board of Directors fee in connection with its adoption of the 2009 Board compensation program. The Audit Committee fees for 2009 were unchanged from 2008. The Board fees for 2009 and
Audit Committee fees for 2009 have been taken into account in the intercompany expense allocations between the Company and the Bank.

Equity-Based Compensation. The 2006 EIP established a mechanism by which awards of restricted stock or stock options could
further align the financial interests of the directors of the Company and the Bank with stockholders and, in the future, provide an additional means to attract, retain and reward individuals who can and do contribute to the success of the Company.
The Board of Directors granted long-term equity-based compensation awards (consisting of both restricted stock and stock options) to its members in 2006 and in 2007 for Ms. Francis as described in the table on the following page. All awards
under the 2006 EIP were based in part on a members experience and on each members responsibilities as assigned by the Board of Directors.

The Board of Directors also established share ownership guidelines for directors applicable both to personally-acquired shares and shares
acquired through the 2006 EIP. In general, absent difficult personal financial circumstances, the Board of Directors encourages each director in office at least one year to hold a position in Company shares equal to at least 50% of a directors
annual directors fees. At December 31, 2009, all eligible directors and all directors as a group significantly exceeded this ownership position. In addition, the Human Resources Committee encourages directors to retain all shares granted
under the 2006 EIP. At December 31, 2009, the Companys directors retained 100% of their vested 2006 EIP restricted shares.

The
table below provides information on 2009 compensation for directors who served in 2009.



|                         |  |                                |        |                    |   |                     |  |                           |   |           |   |   |  |   |       
|------------------------ |  | ------------------------------ | ------ | ------------------ | - | ------------------- |  | ------------------------- | - | --------- | - | - |  | - | ------
|Name                     |  | Fees Earned orPaid in Cash ($) |        | Stock Awards($)(1) |   | Option Awards($)(1) |  | All OtherCompensation ($) |   | Total ($)
|Cassandra J. Francis     |  | $                              | 24,000 |                    | $ |                    |  | $                         |  |           | $ |  |  | $ | 24,000
|John M. Hausmann, C.P.A. |  | $                              | 28,000 |                    | $ |                    |  | $                         |  |           | $ |  |  | $ | 28,000
|Sherwin R. Koopmans      |  | $                              | 27,200 |                    | $ |                    |  | $                         |  |           | $ |  |  | $ | 27,200
|Joseph A. Schudt         |  | $                              | 24,000 |                    | $ |                    |  | $                         |  |           | $ |  |  | $ | 24,000
|Terry R. Wells           |  | $                              | 27,200 |                    | $ |                    |  | $                         |  |           | $ |  |  | $ | 27,200
|Glen R. Wherfel, C.P.A.  |  | $                              | 24,000 |                    | $ |                    |  | $                         |  |           | $ |  |  | $ | 24,000

The table below shows each current
non-employee directors outstanding equity awards as of December 31, 2009.



|                        |  |              |  |               |  |              
|----------------------- |  | ------------ |  | ------------- |  | -------------
|                        |  |              |  | Option Awards
|Name                    |  | Stock Awards |  | Exercisable   |  | Unexercisable
|Cassandra J. Francis    |  | 2,200        |  | 47,464        |  | 2,200        
|John M. Hausmann, C.P.A |  | 8,000        |  | 70,664        |  | 8,000        
|Sherwin R. Koopmans     |  | 5,600        |  | 61,064        |  | 5,600        
|Joseph A. Schudt        |  | 8,000        |  | 70,664        |  | 8,000        
|Terry R. Wells          |  | 6,400        |  | 64,264        |  | 6,400        
|Glen R. Wherfel, C.P.A  |  | 5,000        |  | 58,664        |  | 5,000        



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Compensation Committee Interlocks and Insider Participation

Mr. Gasior is the only director of the Company and the Bank who is also an executive officer of the Company and/or the Bank.
Mr. Gasior does not participate in the decisions of the Boards of Directors of the Company or the Bank or their respective Human Resources Committees concerning his compensation. No executive officer of the Company or the Bank has served on the
Board of Directors or on the compensation committee of any other entity that had an executive officer serving on the Companys Board of Directors or Human Resources Committee.



|ITEM 12. | BENEFICIAL OWNERSHIP OF COMMON STOCK BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|-------- | --------------------------------------------------------------------------------

The following table sets forth, as of March 31, 2010, certain information as to the beneficial ownership of shares of the
Companys common stock by: (i) those persons or entities known by the Company to beneficially own more than 5% of the Companys outstanding shares of common stock; (ii) each director and nominee for election as director;
(iii) each named executive officer of the Company; and (iv) all directors and executive officers of the Company and the Bank as a group. The address for each individual listed below is: care of BankFinancial Corporation, 15W060 North
Frontage Road, Burr Ridge, Illinois 60527. An asterisk denotes beneficial ownership of less than one percent.



|                                                                                                  |  |                                                             |      |  |                                             |  
|------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------- | ---- |  | ------------------------------------------- | -
|Name and Address of Beneficial Owners                                                             |  | Amount of SharesOwned and Nature ofBeneficial 
Ownership(1) |      |  | Percent of Shares ofCommon StockOutstanding |  
|                                                                                                  |  |                                                            
|Wellington Management Company, LLP
75 State Street
Boston, Massachusetts 02109                    |  | 2,154,109                                                   | (2)  |  | 10.06                                       | %
|                                                                                                  |  |                                                            
|BankFinancial, F.S.B.
Employee Stock Ownership Plan Trust
2321 Kochs Lane
Quincy, Illinois 62305  |  | 1,936,713                                                   | (2)  |  | 9.04                                        |  
|                                                                                                  |  |                                                            
|Keeley Asset Management Corp.
401 South LaSalle Street
Chicago, Illinois 60605                    |  | 1,653,007                                                   | (2)  |  | 7.72                                        |  
|                                                                                                  |  |                                                            
|Dimensional Fund Advisors LP
6300 Bee Cave Road
Austin, Texas 78746                               |  | 1,666,534                                                   | (2)  |  | 7.78                                        |  
|                                                                                                  |  |                                                            
|Directors and Nominees                                                                            |  |                                                             |      |  |                                             |  
|                                                                                                  |  |                                                            
|Cassandra J. Francis                                                                              |  | 59,964                                                      | (3)  |  | *                                           |  
|F. Morgan Gasior                                                                                  |  | 539,477                                                     | (4)  |  | 2.52                                        |  
|John M. Hausmann                                                                                  |  | 126,963                                                     | (5)  |  | *                                           |  
|Sherwin R. Koopmans                                                                               |  | 109,064                                                     | (6)  |  | *                                           |  
|Joseph A. Schudt                                                                                  |  | 164,268                                                     | (7)  |  | *                                           |  
|Terry R. Wells                                                                                    |  | 111,264                                                     | (8)  |  | *                                           |  
|Glen R. Wherfel                                                                                   |  | 118,329                                                     | (9)  |  | *                                           |  
|                                                                                                  |  |                                                            
|Named Executive Officers (other than Mr. Gasior):                                                 |  |                                                             |      |  |                                             |  
|                                                                                                  |  |                                                            
|Paul A. Cloutier                                                                                  |  | 259,793                                                     | (10) |  | 1.21                                        |  
|James J. Brennan                                                                                  |  | 312,196                                                     | (11) |  | 1.46                                        |  
|Christa N. Calabrese                                                                              |  | 160,257                                                     | (12) |  | *                                           |  
|Gregg T. Adams                                                                                    |  | 119,344                                                     | (13) |  | *                                           |  
|                                                                                                  |  |                                                            
|All Directors and Executive Officers (including
Named Executive Officers) as a Group (12 persons) |  | 2,280,575                                                   |      |  | 10.08                                       | %



Footnotes on following page.



21



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|(1) | The information reflected in this column is based upon information furnished to us by the persons named above and the information contained in the records of our stock
transfer agent. The nature of beneficial ownership for shares shown in this column, unless otherwise noted, represents sole voting and investment power and includes shares of common stock issuable upon the exercise of options that are exercisable
currently or within 60 days of March 31, 2010.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Amount of shares owned and reported on the most recent Schedule 13G filings with the SEC, reporting ownership as of December 31, 2009.
|--- | --------------------------------------------------------------------------------------------------------------------------------------

|(3) | Includes 2,200 shares of unvested restricted stock held in Ms. Francis name and 47,464 shares issuable pursuant to options held in Ms. Francis
name.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Includes 16,184 shares held by the BankFinancial and Subsidiaries Associate Investment Plan, 5,793 shares held by the BankFinancial, F.S.B. Employee Stock Ownership
Plan, 25,000 shares of unvested restricted stock held in Mr. Gasiors name and 275,000 shares issuable pursuant to options held in Mr. Gasiors name. Also includes 122,500 shares held in trust for Mr. Gasiors spouse
and 2,500 shares held by Mr. Gasiors spouses individual retirement account. Mr. Gasior disclaims beneficial ownership of these 125,000 shares.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Includes 8,000 shares of unvested restricted stock held in Mr. Hausmanns name and 70,664 shares issuable pursuant to options held in Mr. Hausmanns
name.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Includes 5,600 shares of unvested restricted stock held in Mr. Koopmans name and 61,064 shares issuable pursuant to options held in Mr. Koopmans
name.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Includes 8,000 shares of unvested restricted stock held in Mr. Schudts name and 70,664 shares issuable pursuant to options held in Mr. Schudts
name. Also, includes 54,636 shares held in trust and 24,991 shares held by an individual retirement account. In addition, includes 5,977 shares held by Mr. Schudts spouses individual retirement account. Mr. Schudt disclaims
beneficial ownership of these 5,977 shares.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | Includes 6,400 shares of unvested restricted stock held in Mr. Wells name and 64,264 shares issuable pursuant to options held in Mr. Wells name.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | Includes 5,000 shares of unvested restricted stock held in Mr. Wherfels name and 58,664 shares issuable pursuant to options held in Mr. Wherfels
name. Also, includes 26,827 shares held in trust and 7,500 shares held by an individual retirement account.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | Includes 5,793 shares held by the BankFinancial, F.S.B. Employee Stock Ownership Plan. Also, includes 5,000 shares of unvested restricted stock held in
Mr. Cloutiers name and 134,000 shares issuable pursuant to options held in Mr. Cloutiers name. Mr. Cloutiers holdings include 115,000 shares of common stock subject to pledge.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | Includes 72,436 shares held by the BankFinancial and Subsidiaries Associate Investment Plan, 5,793 shares held by the BankFinancial, F.S.B. Employee Stock Ownership
Plan, 5,000 shares of unvested restricted stock held in Mr. Brennans name and 148,667 shares issuable pursuant to options held in Mr. Brennans name. Also includes 300 shares held by Mr. Brennans spouse.
Mr. Brennan disclaims beneficial ownership of these 300 shares.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(12) | Includes 10,129 shares held by the BankFinancial and Subsidiaries Associate Investment Plan, 5,793 shares held by the BankFinancial, F.S.B. Employee Stock Ownership
Plan, 5,000 shares of unvested restricted stock held in Ms. Calabreses name and 119,334 shares issuable pursuant to options held in Ms. Calabreses name.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(13) | Includes 23,551 shares held by the BankFinancial and Subsidiaries Associate Investment Plan, 5,793 shares held by the BankFinancial, F.S.B. Employee Stock Ownership
Plan, 4,400 shares of unvested restricted stock held in Mr. Adams name and 68,000 shares issuable pursuant to options held in Mr. Adams name.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|-------- | -------------------------------------------------------------------------

Transactions with Certain Related Persons

Neither the Bank nor the Company had any outstanding extensions of credit as of December 31, 2009 to any executive officer or
directors or to a related interest of a director or executive officer other than Ms. Francis. The Bank made certain secured real estate loans to Ms. Francis and her spouse prior to Ms. Francis appointment as a director in 2006,
and these loans were considered to be grandfathered from the Banks practice of not making loans to directors or executive officers. This extension of credit was made in the ordinary course of business on substantially the same terms, including
interest rate and collateral, as those prevailing at the time for comparable transactions with others, does not involve more than normal risk of collectability or present other unfavorable features, and is not past due or classified as non-accrual,
restructured or a potential problem loan. The Banks Professional Responsibility Policy provides that no director or executive officer (as defined by the Banks Board of Directors) may provide goods or services to the Bank or an affiliate
(which includes the Company) unless approved by the disinterested majority of the Board of Directors after full disclosure and it is determined that the arrangement is fair and appropriate. In addition, all transactions between the Bank or its
affiliates and a director or executive officer must be conducted on an arms length basis, comply with all applicable laws and regulations and be on terms that are no more favorable to the director or executive officer than those afforded to
similarly situated customers and vendors.

Director Independence

The Board of Directors has determined that, except for Mr. Gasior, who serves as the Chairman, Chief Executive Officer and President of
the Company, each of the Companys directors is independent as defined in Rule 5605(a)(2) of the listing standards of the NASDAQ Stock Market.



|ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|-------- | --------------------------------------

Set forth below is certain information concerning aggregate fees billed for professional services rendered by Crowe Horwath LLP during the
years ended December 31, 2009 and 2008:

Audit Fees.The aggregate fees billed to the Company by Crowe
Horwath for professional services rendered by Crowe Horwath for the audit of the Companys annual financial statements and internal controls, review of the financial statements included in the Companys Quarterly Reports on Form 10-Q and
services that are normally provided by Crowe Horwath in connection with statutory and regulatory filings and engagements were $368,500 and $362,500 during the years ended December 31, 2009 and 2008, respectively.



22



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Audit-Related Fees.The aggregate fees billed to the Company by Crowe Horwath
for assurance and related services rendered by Crowe Horwath that are reasonably related to the performance of the audit of and review of the financial statements and that are not already reported in Audit Fees above, were $40,200 and
$23,907 during the years ended December 31, 2009 and 2008, respectively. The 2009 and 2008 fees were billed to the Company for services related to the Banks ESOP and 401(k) Plans.

Tax Fees.The aggregate fees billed to the Company by Crowe Horwath for professional services rendered by Crowe Horwath for
tax consultations and tax compliance were $29,050 and $27,400 during the years ended December 31, 2009 and 2008, respectively.

All Other Fees.Crowe Horwath did not perform any professional services for us that would be considered in the all other
fee category during the fiscal years ended December 31, 2009 and 2008.

Audit Committee Pre-Approval Policy

The Audit Committee pre-approves all auditing services and permitted non-audit services (including the fees and terms thereof) to be
performed for the Company by Crowe Horwath, subject to the de minimus exceptions for non-audit services described in Section 10A(i)(1)(B) of the Securities Exchange Act of 1934, as amended, which are approved by the Audit Committee prior to the
completion of the audit. The Audit Committee pre-approved the audit related fees and tax fees described above during the years ended December 31, 2009 and 2008.



23



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|ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|-------- | ------------------------------------------



|(a)(3) | Exhibits
|------ | --------

The documents set forth below
are filed herewith or incorporated herein by reference to the location indicated.



|      |  |                                                                                                    |  |                |  | 
|----- |  | -------------------------------------------------------------------------------------------------- |  | -------------- |  | 
|      |  | Exhibit                                                                                            |  | Location       |  | 
|      |  |                                                                                                    | 
|10.30 |  | BankFinancial FSB Employment Agreement with Gregg T. Adams                                         |  | Filed herewith |  | 
|      |  |                                                                                                    | 
|10.31 |  | BankFinancial FSB Employment Agreement with John G. Manos                                          |  | Filed herewith |  | 
|      |  |                                                                                                    | 
|31.1  |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |  | Filed herewith |  | 
|      |  |                                                                                                    | 
|31.2  |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |  | Filed herewith |  | 



24



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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: April 30, 2010 |  | By:                       |  | /s/ F. Morgan Gasior                                        
|                     |  |                           |  | F. Morgan Gasior                                            
|                     |  |                           |  | Chairman of the Board, Chief Executive Officer and President
|                     |  |                           |  | (Duly Authorized Representative)                            



25