BY - Byline Bancorp Inc. Reports Third Quarter 2021 Financial Results

October, 28 2021 04:15 PM Byline Bancorp Inc.

Select Third Quarter 2021 Highlights

Net income of $25.3 million, or $0.66 per diluted share
Net interest margin of 3.91%
Return on average assets of 1.53%, as adjusted ¹ 1.59%
Efficiency ratio of 54.18%
Non-interest bearing deposits 41.1% of total deposits
Originated loans and leases increased $189.5 million, total production of $410.3 million
Common Equity Tier 1 to risk weighted assets of 11.32%

Byline Bancorp, Inc. ("Byline", the “Company”, "we", "our", or "us")(NYSE: BY), the parent company of Byline Bank (the “Bank”), today reported net income of $25.3 million, or $0.66 per diluted share, for the third quarter of 2021, compared with net income of $28.5 million, or $0.73 per diluted share, for the second quarter of 2021 and net income of $13.1 million, or $0.34 per diluted share for the third quarter 2020. Adjusted net income ¹ was $26.4 million, or $0.69 per adjusted diluted share, for the third quarter of 2021, compared with $29.9 million, or $0.77 per adjusted diluted share ¹ , for the second quarter of 2021 and $13.1 million, or $0.34 per adjusted diluted share for the third quarter of 2020.

Roberto R. Herencia, Executive Chairman and Chief Executive Officer of Byline Bancorp, commented, “We reported strong third quarter results highlighted by robust balance sheet growth as our teams remained focused on taking care of our customers, while the economy continued to improve. We executed well on our commercial banking strategy during the quarter driven by solid loan and lease growth, net interest margin expansion while continuing to deploy excess capital through share repurchases and dividends. We remain optimistic about our opportunities to execute on our strategy in the future to further enhance the value of our franchise. I want to thank all of our employees for their continued hard work and dedication to serving all of our stakeholders.”

Alberto J. Paracchini, President of Byline Bancorp, added, “Our strong results were supported by continued momentum across our businesses resulting in loan and lease growth, strong inflows of commercial noninterest-bearing deposits, and higher net interest income. Excluding PPP loans, our total loans and leases grew at a 34.9% annualized rate during the third quarter and more than offset the decline in our PPP portfolio. Growth was particularly strong in the commercial, sponsor finance, leasing and government guaranteed loan portfolios. Thanks to the efforts of all of our bankers and team members, we continue to have a healthy loan pipeline, which we believe will result in continued growth of our business while benefiting the mix of earning assets.”

Board Declares Cash Dividend of $0.09 per Share

On October 26, 2021, the Company's Board of Directors declared a cash dividend of $0.09 per share, payable on November 23, 2021, to stockholders of record of the Company's common stock as of November 9, 2021.

(1)

Represents non-GAAP financial measures. See “Reconciliation of non-GAAP Financial Measures” for a reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measure.

STATEMENTS OF OPERATIONS

Net Interest Income

The following table presents net interest income for the periods indicated:












September 30, 2021


Three Months Ended

Change from


September 30,

June 30,

September 30,

June 30,

September 30,
(dollars in thousands)

2021

2021

2020

2021

2020
INTEREST AND DIVIDEND INCOME















Interest and fees on loans and leases

$
56,291


$
54,324


$
51,036



3.6
%


10.3
%
Interest on securities


5,534



6,359



7,070



(13.0
)%


(21.7
)%
Other interest and dividend income


947



628



128



50.6
%


644.4
%
Total interest and dividend income


62,772



61,311



58,234



2.4
%


7.8
%
INTEREST EXPENSE















Deposits


986



1,058



2,760



(6.8
)%


(64.3
)%
Other borrowings


349



482



465



(27.4
)%


(24.8
)%
Subordinated notes and debentures


1,592



1,597



1,485



(0.4
)%


7.2
%
Total interest expense


2,927



3,137



4,710



(6.7
)%


(37.8
)%
Net interest income

$
59,845


$
58,174


$
53,524



2.9
%


11.8
%

The following table presents the average interest-earning assets and average interest-bearing liabilities for the periods indicated. Net interest income and margin are adjusted to reflect tax-exempt interest income on a tax-equivalent basis using tax rates effective as of the end of the period:



For the Three Months Ended



September 30, 2021

June 30, 2021
(dollars in thousands)

Average Balance ⁽⁵⁾

Interest Inc / Exp

Average Yield / Rate

Average Balance ⁽⁵⁾

Interest Inc / Exp

Average Yield / Rate
ASSETS


















Cash and cash equivalents

$
40,088


$
19



0.19
%

$
75,382


$
28



0.15
%
Loans and leases ⁽¹⁾


4,539,111



56,291



4.92
%


4,491,197



54,324



4.85
%
Taxable securities


1,309,802



5,472



1.66
%


1,477,070



5,947



1.62
%
Tax-exempt securities ⁽²⁾


187,064



1,254



2.66
%


187,967



1,281



2.73
%
Total interest-earning assets

$
6,076,065


$
63,036



4.12
%

$
6,231,616


$
61,580



3.96
%
Allowance for loan and lease losses


(61,528
)








(65,848
)






All other assets


546,331









554,724







TOTAL ASSETS

$
6,560,868








$
6,720,492







LIABILITIES AND STOCKHOLDERS’ EQUITY


















Deposits


















Interest checking

$
653,543


$
228



0.14
%

$
626,886


$
220



0.14
%
Money market accounts


1,031,009



280



0.11
%


1,052,223



279



0.11
%
Savings


625,037



75



0.05
%


607,035



72



0.05
%
Time deposits


709,805



403



0.23
%


717,795



487



0.27
%
Total interest-bearing deposits


3,019,394



986



0.13
%


3,003,939



1,058



0.14
%
Other borrowings


426,284



349



0.33
%


642,586



482



0.30
%
Subordinated notes and debentures


110,195



1,592



5.73
%


110,030



1,597



5.82
%
Total borrowings


536,479



1,941



1.44
%


752,616



2,079



1.11
%
Total interest-bearing liabilities

$
3,555,873


$
2,927



0.33
%

$
3,756,555


$
3,137



0.33
%
Non-interest-bearing demand deposits


2,106,189









2,085,358







Other liabilities


75,052









68,089







Total stockholders’ equity


823,754









810,490







TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$
6,560,868








$
6,720,492







Net interest spread ⁽³⁾








3.79
%








3.63
%
Net interest income, fully taxable equivalent




$
60,109








$
58,443




Net interest margin, fully taxable equivalent ⁽²⁾⁽⁴⁾








3.92
%








3.76
%
Tax-equivalent adjustment





(264
)


0.01
%





(269
)


0.02
%
Net interest income




$
59,845








$
58,174




Net interest margin ⁽⁴⁾








3.91
%








3.74
%



















Net loan accretion impact on margin




$
1,638



0.11
%




$
1,395



0.09
%

(1)
Loan and lease balances are net of deferred origination fees and costs and initial indirect costs. Non-accrual loans and leases are included in total loan and lease balances.
(2)
Interest income and rates include the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis, assuming a federal income tax rate of 21%.
(3)
Represents the average rate earned on interest-earning assets minus the average rate paid on interest-bearing liabilities.
(4)
Represents net interest income (annualized) divided by total average earning assets.
(5)
Average balances are average daily balances.

Net interest income for the third quarter of 2021 was $59.8 million, an increase of $1.7 million, or 2.9%, from the second quarter of 2021.

The increase in net interest income was primarily due to:

An increase of $2.0 million in interest income on loans and leases, due to higher balances and yields on loans and leases and increased Paycheck Protection Program ("PPP") servicing fees resulting from a higher volume of loan forgiveness.

Partially offset by:

A decrease of $825,000 in interest income on securities, due to lower average balances of securities.

Tax-equivalent net interest margin for the third quarter of 2021 was 3.92%, an increase of 16 basis points compared to the second quarter of 2021. Total net accretion income on acquired loans contributed 11 basis points to the net interest margin for the third quarter of 2021 compared to nine basis points for the second quarter of 2021, an increase of two basis points. PPP loan interest income and net fee income combined contributed $5.4 million to net interest income for the third quarter of 2021 compared to $4.5 million for the second quarter of 2021 due to the timing of forgiveness of loans.

The average cost of total deposits was 0.08% for the third quarter of 2021, flat compared to the second quarter of 2021. Average non-interest-bearing demand deposits increased $20.8 million, while average money market account deposits decreased by $21.2 million. Average non-interest-bearing demand deposits were 41.1% of average total deposits for the third quarter of 2021 compared to 41.0% during the second quarter of 2021.

Provision for Loan and Lease Losses

The provision for loan and lease losses was $352,000 for the third quarter of 2021, an increase of $2.3 million compared to a recapture of provision of $2.0 million for the second quarter of 2021. The provision during the third quarter of 2021 was mainly driven by new loan and lease originations during the quarter, offset by a recapture of $1.7 million as a result of improved qualitative factors resulting from continued economic improvement.

Non-interest Income

The following table presents the components of non-interest income for the periods indicated:



Three Months Ended

September 30, 2021 Change from


September 30,

June 30,

September 30,

June 30,

September 30,
(dollars in thousands)

2021

2021

2020

2021

2020
NON-INTEREST INCOME















Fees and service charges on deposits

$
1,867


$
1,768


$
1,603



5.6
%


16.4
%
Loan servicing revenue


3,344



3,188



2,936



4.9
%


13.9
%
Loan servicing asset revaluation


(2,650
)


7



1,122


NM


NM

ATM and interchange fees


1,201



1,044



1,028



15.0
%


16.7
%
Net realized gains (losses) on securities available-for-sale


130



(136
)


1,037


NM



(87.4
)%
Change in fair value of equity securities, net


(275
)


517



154


NM


NM

Net gains on sales of loans


12,761



12,270



12,671



4.0
%


0.7
%
Wealth management and trust income


815



722



693



12.8
%


17.7
%
Other non-interest income


1,302



1,622



990



(19.7
)%


31.7
%
Total non-interest income

$
18,495


$
21,002


$
22,234



(11.9
)%


(16.8
)%

Non-interest income for the third quarter of 2021 was $18.5 million, a decrease of $2.5 million, or 11.9%, compared to $21.0 million for the second quarter of 2021.

The decrease in total non-interest income was primarily due to:

A $2.7 million loan servicing asset revaluation charge, which was a $2.7 million downward valuation adjustment for the current quarter compared to a $7,000 upward valuation adjustment in the prior quarter, due to changes in the fair value of the servicing asset; and
A $793,000 decrease in the fair value of equity securities.

Partially offset by:

An increase of $491,000 in net gains on sales of loans due to higher volume of loan sales.

During the third quarter of 2021, we sold $104.2 million of U.S. government guaranteed loans compared to $100.6 million during the second quarter of 2021.

Non-interest Expense

The following table presents the components of non-interest expense for the periods indicated:



Three Months Ended

September 30, 2021 Change from


September 30,

June 30,

September 30,

June 30,

September 30,
(dollars in thousands)

2021

2021

2020

2021

2020
NON-INTEREST EXPENSE















Salaries and employee benefits

$
25,978


$
24,588


$
23,126



5.7
%


12.3
%
Occupancy and equipment expense, net


4,982



4,856



5,220



2.6
%


(4.6
)%
Loan and lease related expenses


1,175



1,503



2,053



(21.7
)%


(42.7
)%
Legal, audit and other professional fees


2,710



2,898



2,390



(6.5
)%


13.4
%
Data processing


3,108



2,847



2,661



9.1
%


16.8
%
Net loss recognized on other real estate owned and other related expenses


42



389



349



(89.1
)%


(87.8
)%
Other intangible assets amortization expense


1,738



1,848



1,947



(6.0
)%


(10.7
)%
Other non-interest expense


4,447



4,052



3,941



9.7
%


12.8
%
Total non-interest expense

$
44,180


$
42,981


$
41,687



2.8
%


6.0
%

Non-interest expense for the third quarter of 2021 was $44.2 million, an increase of $1.2 million, or 2.8%, from $43.0 million for the second quarter of 2021.

The increase in total non-interest expense was primarily due to:

An increase of $1.4 million in salaries and employee benefits, primarily due to new hires during the quarter and increased commission expense; and
An increase of $395,000 in other non-interest expense, mainly due to advertising campaigns launched during the quarter.

Partially offset by:

A decrease of $328,000 in loan and leases related expenses, mainly due to decreases in government guaranteed loan expenses; and
A decrease of $347,000 in net loss recognized on other real estate owned and other related expenses, due to decreases in write-downs.

Our efficiency ratio was 54.18% for the third quarter of 2021 compared to 51.95% for the second quarter of 2021. Excluding impairment charges on assets held for sale, our adjusted efficiency ratio ¹ was 52.35% for the third quarter of 2021, compared with 49.50% for the second quarter of 2021.

INCOME TAXES

We recorded income tax expense of $8.5 million during the third quarter of 2021, compared to $9.7 million during the second quarter of 2021. The effective tax rate was 25.1%, and 25.3%, for the third quarter and second quarter of 2021, respectively.

STATEMENTS OF FINANCIAL CONDITION

Total assets were $6.7 billion at September 30, 2021, an increase of $163.8 million compared to $6.5 billion at June 30, 2021.

The current quarter increase was primarily due to:

An increase in loans and leases of $139.8 million, as a result of new originations, primarily driven by commercial real estate and commercial and industrial loans.

Partially offset by:

A decreases of $68.2 million in securities available-for-sale, at fair value, due to principal paydowns used to fund loan and lease growth.

The following table shows our allocation of the originated, acquired impaired, and acquired non-impaired loans and leases at the dates indicated:



September 30, 2021

June 30, 2021

September 30, 2020
(dollars in thousands)

Amount

% of Total

Amount

% of Total

Amount

% of Total
Originated loans and leases


















Commercial real estate

$
1,298,454



28.2
%

$
1,156,824



25.9
%

$
919,862



21.0
%
Residential real estate


387,578



8.4
%


389,758



8.7
%


458,364



10.5
%
Construction, land development, and other land


336,460



7.3
%


271,710



6.1
%


234,017



5.3
%
Commercial and industrial


1,480,076



32.1
%


1,350,471



30.2
%


1,214,099



27.8
%
Paycheck Protection Program


268,081



5.8
%


476,282



10.7
%


622,191



14.2
%
Installment and other


998



0.0
%


982



0.0
%


2,346



0.1
%
Leasing financing receivables


331,149



7.2
%


267,300



6.0
%


185,700



4.2
%
Total originated loans and leases

$
4,102,796



89.0
%

$
3,913,327



87.6
%

$
3,636,579



83.1
%
Acquired impaired loans


















Commercial real estate

$
84,821



1.8
%

$
91,313



2.0
%

$
117,114



2.7
%
Residential real estate


61,893



1.3
%


67,401



1.5
%


84,197



1.9
%
Construction, land development, and other land


1,746



0.1
%


2,008



0.0
%


4,804



0.1
%
Commercial and industrial


6,651



0.1
%


7,444



0.2
%


10,489



0.3
%
Installment and other


169



0.0
%


180



0.0
%


214



0.0
%
Total acquired impaired loans

$
155,280



3.3
%

$
168,346



3.7
%

$
216,818



5.0
%
Acquired non-impaired loans and leases


















Commercial real estate

$
235,103



5.1
%

$
254,739



5.6
%

$
310,879



7.1
%
Residential real estate


58,283



1.3
%


65,119



1.5
%


90,835



2.1
%
Construction, land development, and other land


206



0.0
%


208



0.0
%


213



0.0
%
Commercial and industrial


49,678



1.1
%


58,320



1.3
%


104,221



2.4
%
Installment and other


275



0.0
%


311



0.0
%


583



0.0
%
Leasing financing receivables


7,607



0.2
%


9,087



0.3
%


14,389



0.3
%
Total acquired non-impaired loans and leases

$
351,152



7.7
%

$
387,784



8.7
%

$
521,120



11.9
%
Total loans and leases

$
4,609,228



100.0
%

$
4,469,457



100.0
%

$
4,374,517



100.0
%
Allowance for loan and lease losses


(60,598
)





(61,719
)





(61,258
)



Total loans and leases, net of allowance for loan and lease losses

$
4,548,630





$
4,407,738





$
4,313,259

Paycheck Protection Program

The following table presents the net PPP loans outstanding as of September 30, 2021:



PPP Loans Outstanding
(dollars in thousands)

First Round

Second Round

Total
Principal outstanding

$
12,561


$
263,058


$
275,619

Unearned processing fee


(176
)


(9,503
)


(9,679
)
Deferred cost


47



2,094



2,141

PPP loans, net

$
12,432


$
255,649


$
268,081

Number of loans outstanding


128



1,624



1,752











Forgiven


95.9
%


22.3
%


70.7
%
In review or submission process


0.9
%


10.9
%


4.3
%
Not applied for forgiveness


3.2
%


66.8
%


25.0
%

PPP loans decreased by $208.2 million in the third quarter of 2021 primarily as a result of forgiveness of PPP loans. Forgiveness for the third quarter 2021 was $202.4 million compared to $180.7 million for the second quarter of 2021.

ASSET QUALITY

Non-Performing Assets

The following table sets forth the amounts of non-performing loans and leases (excluding acquired impaired), other real estate owned, and accruing troubled debt restructured loans at the dates indicated:












% Change from
(dollars in thousands)

September 30, 2021

June 30, 2021

September 30, 2020

June 30, 2021

September 30, 2020
Non-performing assets:















Non-accrual loans and leases

$
34,465


$
35,514


$
43,196



(3.0
)%


(20.2
)%
Past due loans and leases 90 days or more and still accruing interest


—



—



—


—%


—%

Total non-performing loans and leases

$
34,465


$
35,514


$
43,196



(3.0
)%


(20.2
)%
Other real estate owned


3,033



4,417



8,150



(31.3
)%


(62.8
)%
Total non-performing assets

$
37,498


$
39,931


$
51,346



(6.1
)%


(27.0
)%
Accruing troubled debt restructured loans ⁽¹⁾

$
2,366


$
2,395


$
2,293



(1.3
)%


3.2
%
Total non-performing loans and leases as a percentage of total loans and leases


0.75
%


0.79
%


0.99
%






Total non-performing assets as a percentage of total assets


0.56
%


0.61
%


0.79
%






Allowance for loan and lease losses as a percentage of non-performing loans and leases


175.82
%


173.79
%


141.81
%






















Non-performing assets guaranteed by U.S. government:















Non-accrual loans guaranteed

$
6,326


$
5,847


$
3,749



8.2
%


68.8
%
Past due loans 90 days or more and still accruing interest guaranteed


—



—



—


—%


—%

Total non-performing loans guaranteed

$
6,326


$
5,847


$
3,749



8.2
%


68.8
%
Accruing troubled debt restructured loans guaranteed ⁽¹⁾

$
—


$
—


$
—


—%


—%

Total non-performing loans and leases not guaranteed as a percentage of total loans and leases


0.61
%


0.66
%


0.90
%






Total non-performing assets not guaranteed as a percentage of total assets


0.46
%


0.52
%


0.73
%

Variances in non-performing assets were:

Non-performing loans and leases were $34.5 million at September 30, 2021, a decrease of $1.0 million from $35.5 million at June 30, 2021; and
Other real estate owned was $3.0 million at September 30, 2021, a decrease of $1.4 million from $4.4 million at June 30, 2021 due to sales.

Allowance for Loan and Lease Losses

The following table presents the balance and activity within the allowance for loan and lease losses for the periods indicated:



Three Months Ended


September 30,

June 30,

September 30,
(dollars in thousands)

2021

2021

2020
Allowance for loan and lease losses, beginning of period

$
61,719


$
65,590


$
51,300

Provision/(recapture) for loan and lease losses


352



(1,969
)


15,740

Net charge-offs of loans and leases


(1,473
)


(1,902
)


(5,782
)
Allowance for loan and lease losses, end of period

$
60,598


$
61,719


$
61,258











Allowance for loan and lease losses to period end total loans and leases held for investment


1.31
%


1.38
%


1.40
%
Net charge-offs (annualized) to average loans and leases outstanding during the period


0.13
%


0.17
%


0.53
%
Provision/(recapture) for loan and lease losses to net charge-offs during the period


0.24
x

(1.04)x



2.72
x

The allowance for loan and lease losses as a percentage of total loans and leases held for investment decreased to 1.31% at September 30, 2021 compared to 1.38% at June 30, 2021. The allowance for loan and lease losses as a percentage of total loans and leases held for investment excluding PPP loans decreased to 1.40% at September 30, 2021 from 1.55% at June 30, 2021.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance on the recognition of credit losses, which replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses. In November 2019, the FASB delayed the effective date of the standard for smaller reporting companies, which includes emerging growth companies. Assuming we remain an emerging growth company, the Company anticipates adopting the standard on December 31, 2022. We are in the process of implementation and determining the impact that this new authoritative guidance will have on our consolidated financial statements.

Net Charge-Offs

Net charge-offs during the third quarter of 2021 were $1.5 million, or 0.13% of average loans and leases, on an annualized basis, a decrease of $429,000 compared to $1.9 million or 0.17% of average loans and leases, during the second quarter of 2021, and a decrease of $4.3 million from $5.8 million or 0.53% of average loans and leases from the comparable period a year ago.

Net charge-offs for the third quarter of 2021 included $1.3 million in the unguaranteed portion of U.S. government guaranteed loans, while net charge-offs for the second quarter of 2021 and third quarter of 2020 included $1.6 million and $4.1 million, respectively, in the unguaranteed portion of U.S. government guaranteed loans.

Deposits and Other Liabilities

The following table presents the composition of deposits at the dates indicated:












Change from
(dollars in thousands)

September 30, 2021

June 30, 2021

September 30, 2020

June 30, 2021

September 30, 2020
Non-interest-bearing demand deposits

$
2,117,749


$
2,089,455


$
1,718,682



1.4
%


23.2
%
Interest-bearing checking accounts


652,824



653,558



584,682



(0.1
)%


11.7
%
Money market demand accounts


1,057,419



1,023,675



1,153,433



3.3
%


(8.3
)%
Other savings


627,294



613,136



542,741



2.3
%


15.6
%
Time deposits (below $250,000)


553,364



567,469



622,328



(2.5
)%


(11.1
)%
Time deposits ($250,000 and above)


149,628



144,902



188,379



3.3
%


(20.6
)%
Total deposits

$
5,158,278


$
5,092,195


$
4,810,245



1.3
%


7.2
%

Total deposits were $5.2 billion at September 30, 2021, an increase of $66.1 million, or 1.3%, compared to $5.1 billion at June 30, 2021. Non-interest-bearing deposits were 41.1% and 41.0% of total deposits at September 30, 2021 and June 30, 2021, respectively.

The increase in the current quarter was primarily due to:

An increase in non-interest-bearing deposits of $28.3 million, due to increases in commercial deposits; and
An increase in money market demand accounts of $33.7 million, principally driven by increases in personal money market accounts.

Total borrowings and other liabilities were $721.8 million at September 30, 2021, an increase of $90.4 million from $631.3 million at June 30, 2021, primarily driven by an increase in Federal Home Loan Bank advances of $243.0 million, offset by the Paycheck Protection Program Liquidity Facility decreasing by $148.3 million to $156.4 million at September 30, 2021 from $304.7 million at June 30, 2021.

Stockholders’ Equity

Total stockholders’ equity was $824.4 million at September 30, 2021, an increase of $7.3 million from $817.1 million at June 30, 2021. The increase was primarily due to an increase in retained earnings, offset by a decrease in the fair value of available-for-sale securities, and repurchases of common stock.

Under its stock repurchase program the Company repurchased an aggregate of 460,220 shares at an average price per share of $22.62 during the third quarter, and 1,331,708 shares at an average price of $21.68 year-to-date.

The following table presents actual regulatory capital dollar amounts and ratios of the Company and Byline Banks of September 30, 2021:



Actual

Minimum Capital Required

Required to be Considered Well Capitalized
September 30, 2021

Amount

Ratio

Amount

Ratio

Amount

Ratio
Total capital to risk weighted assets:


















Company

$
821,646



14.78
%

$
444,596



8.00
%

N/A


N/A

Bank


747,862



13.50
%


443,176



8.00
%

$
553,971



10.00
%
Tier 1 capital to risk weighted assets:


















Company

$
684,523



12.32
%

$
333,447



6.00
%

N/A


N/A

Bank

$
685,739



12.38
%


332,382



6.00
%

$
443,176



8.00
%
Common Equity Tier 1 (CET1) to risk weighted assets:


















Company

$
629,085



11.32
%

$
250,085



4.50
%

N/A


N/A

Bank


685,739



12.38
%


249,287



4.50
%

$
360,081



6.50
%
Tier 1 capital to average assets:


















Company

$
684,523



11.21
%

$
244,268



4.00
%

N/A


N/A

Bank


685,739



11.24
%


244,138



4.00
%

$
305,173



5.00
%

Capital ratios for the period presented are based on the Basel III regulatory capital framework as applied to our current business and operations, and are subject to, among other things, completion and filing of our regulatory reports and ongoing regulatory review and implementation guidance.

Conference Call, Webcast and Slide Presentation

We will host a conference call and webcast at 9:00 a.m. Central Time on Friday, October 29, 2021 to discuss our quarterly financial results. Analysts and investors may participate in the question-and-answer session. The call can be accessed via telephone at (844) 200-6205; passcode 611698. A recorded replay can be accessed through November 12, 2021 by dialing (866) 813-9403; passcode: 960656.

A slide presentation relating to our third quarter 2021 results will be accessible prior to the conference call. The slide presentation and webcast of the conference call can be accessed on our investor relations website at www.bylinebancorp.com .

About Byline Bancorp, Inc.

Headquartered in Chicago, Byline Bancorp, Inc. is the parent company for Byline Bank, a full service commercial bank serving small- and medium-sized businesses, financial sponsors, and consumers. Byline Bank has approximately $6.7 billion in assets and operates more than 40 full service branch locations throughout the Chicago and Milwaukee metropolitan areas. Byline Bank offers a broad range of commercial and retail banking products and services including small ticket equipment leasing solutions and is one of the top five Small Business Administration lenders in the United States.

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements include, without limitation, statements concerning plans, estimates, calculations, forecasts and projections with respect to the anticipated future performance of the Company. These statements are often, but not always, made through the use of words or phrases such as ‘‘may’’, ‘‘might’’, ‘‘should’’, ‘‘could’’, ‘‘predict’’, ‘‘potential’’, ‘‘believe’’, ‘‘expect’’, ‘‘continue’’, ‘‘will’’, ‘‘anticipate’’, ‘‘seek’’, ‘‘estimate’’, ‘‘intend’’, ‘‘plan’’, ‘‘projection’’, ‘‘would’’, ‘‘annualized’’, “target” and ‘‘outlook’’, or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. Forward-looking statements involve estimates and known and unknown risks, and reflect various assumptions and involve elements of subjective judgement and analysis, which may or may not prove to be correct, and which are subject to uncertainties and contingencies outside the control of Byline and its respective affiliates, directors, employees and other representatives, which could cause actual results to differ materially from those presented in this communication.

The COVID-19 pandemic is adversely affecting us, our employees, customers, counterparties and third-party service providers, and the ultimate extent of the impacts on our business, financial position, results of operations, liquidity, and prospects is uncertain. Deterioration in general business and economic conditions, including increases in unemployment rates or turbulence in U.S. or global financial markets, could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding, and lead to a tightening of credit and further increase stock price volatility. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to COVID-19, could affect us in substantial and unpredictable ways.

No representations, warranties or guarantees are or will be made by Byline as to the reliability, accuracy or completeness of any forward-looking statements contained in this communication or that such forward-looking statements are or will remain based on reasonable assumptions. You should not place undue reliance on any forward-looking statements contained in this communication.

Certain risks and important factors that could affect Byline’s future results are identified in our Annual Report on Form 10-K and other reports we file with the Securities and Exchange Commission, including among other things under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020. Any forward-looking statement speaks only as of the date on which it is made, and Byline undertakes no obligation to update any forward-looking statement, whether to reflect events or circumstances after the date on which the statement is made, to reflect new information or the occurrence of unanticipated events, or otherwise unless required under the federal securities laws.

BYLINE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)
















(dollars in thousands)

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020
ASSETS















Cash and due from banks

$
46,900


$
50,558


$
47,101


$
41,432


$
47,433

Interest bearing deposits with other banks


95,978



52,138



66,038



41,988



53,645

Cash and cash equivalents


142,878



102,696



113,139



83,420



101,078

Equity and other securities, at fair value


10,299



10,575



8,557



8,764



8,335

Securities available-for-sale, at fair value


1,427,605



1,495,789



1,675,907



1,447,230



1,509,211

Securities held-to-maturity, at amortized cost


3,887



3,890



3,892



4,395



4,400

Restricted stock, at cost


15,927



11,927



19,057



10,507



9,652

Loans held for sale


48,372



25,046



28,584



7,924



49,049

Loans and leases:















Loans and leases


4,609,228



4,469,457



4,454,620



4,340,535



4,374,517

Allowance for loan and lease losses


(60,598
)


(61,719
)


(65,590
)


(66,347
)


(61,258
)
Net loans and leases


4,548,630



4,407,738



4,389,030



4,274,188



4,313,259

Servicing assets, at fair value


23,597



24,683



22,140



22,042



21,267

Premises and equipment, net


76,995



80,482



85,182



86,728



94,638

Other real estate owned, net


3,033



4,417



5,952



6,350



8,150

Goodwill and other intangible assets, net


167,296



169,034



170,882



172,631



174,523

Bank-owned life insurance


60,992



60,628



60,258



10,009



9,952

Deferred tax assets, net


45,165



43,127



48,662



40,181



35,945

Accrued interest receivable and other assets


129,775



100,570



118,883



216,283



157,054

Total assets

$
6,704,451


$
6,540,602


$
6,750,125


$
6,390,652


$
6,496,513

LIABILITIES AND STOCKHOLDERS’ EQUITY















LIABILITIES















Non-interest-bearing demand deposits

$
2,117,749


$
2,089,455


$
2,015,643


$
1,762,676


$
1,718,682

Interest-bearing deposits


3,040,529



3,002,740



3,008,897



2,989,355



3,091,563

Total deposits


5,158,278



5,092,195



5,024,540



4,752,031



4,810,245

Other borrowings


539,119



446,836



749,719



647,901



710,560

Subordinated notes, net


73,473



73,429



73,386



73,342



73,299

Junior subordinated debentures issued to capital trusts, net


36,796



36,682



36,565



36,451



36,331

Accrued expenses and other liabilities


72,367



74,387



72,120



75,463



71,382

Total liabilities


5,880,033



5,723,529



5,956,330



5,585,188



5,701,817

STOCKHOLDERS’ EQUITY















Preferred stock


10,438



10,438



10,438



10,438



10,438

Common stock


386



385



385



384



383

Additional paid-in capital


592,192



590,422



589,209



587,165



586,057

Retained earnings


258,077



236,363



210,385



191,098



180,162

Treasury stock


(31,161
)


(20,712
)


(8,275
)


(1,668
)


(1,668
)
Accumulated other comprehensive income (loss), net of tax


(5,514
)


177



(8,347
)


18,047



19,324

Total stockholders’ equity


824,418



817,073



793,795



805,464



794,696

Total liabilities and stockholders’ equity

$
6,704,451


$
6,540,602


$
6,750,125


$
6,390,652


$
6,496,513

BYLINE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)









Three Months Ended

Nine Months Ended
(dollars in thousands, except per share data)

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

September 30, 2021

September 30, 2020
INTEREST AND DIVIDEND INCOME





















Interest and fees on loans and leases

$
56,291


$
54,324


$
53,808


$
53,441


$
51,036


$
164,423


$
155,347

Interest on securities


5,534



6,359



6,089



6,252



7,070



17,982



22,616

Other interest and dividend income


947



628



262



232



128



1,837



1,342

Total interest and dividend income


62,772



61,311



60,159



59,925



58,234



184,242



179,305

INTEREST EXPENSE





















Deposits


986



1,058



1,421



1,814



2,760



3,465



14,810

Other borrowings


349



482



502



480



465



1,333



2,838

Subordinated notes and debentures


1,592



1,597



1,596



1,611



1,485



4,785



2,699

Total interest expense


2,927



3,137



3,519



3,905



4,710



9,583



20,347

Net interest income


59,845



58,174



56,640



56,020



53,524



174,659



158,958

PROVISION/(RECAPTURE) FOR LOAN AND LEASE LOSSES


352



(1,969
)


4,367



10,236



15,740



2,750



45,713

Net interest income after provision/(recapture) for loan and lease losses


59,493



60,143



52,273



45,784



37,784



171,909



113,245

NON-INTEREST INCOME





















Fees and service charges on deposits


1,867



1,768



1,664



1,740



1,603



5,299



4,731

Loan servicing revenue


3,344



3,188



2,769



2,645



2,936



9,301



8,674

Loan servicing asset revaluation


(2,650
)


7



(1,505
)


(2,298
)


1,122



(4,148
)


(2,653
)
ATM and interchange fees


1,201



1,044



1,012



1,076



1,028



3,257



3,089

Net realized gains (losses) on securities available-for-sale


130



(136
)


1,462



2,889



1,037



1,456



2,412

Change in fair value of equity securities, net


(275
)


517



(206
)


428



154



36



301

Net gains on sales of loans


12,761



12,270



8,319



9,449



12,671



33,350



23,900

Wealth management and trust income


815



722



768



710



693



2,305



1,970

Other non-interest income


1,302



1,622



1,459



1,051



990



4,383



1,946

Total non-interest income


18,495



21,002



15,742



17,690



22,234



55,239



44,370

NON-INTEREST EXPENSE





















Salaries and employee benefits


25,978



24,588



21,806



22,559



23,126



72,372



67,197

Occupancy and equipment expense, net


4,982



4,856



5,779



6,854



5,220



15,617



16,103

Loan and lease related expenses


1,175



1,503



951



1,324



2,053



3,629



4,631

Legal, audit, and other professional fees


2,710



2,898



2,214



1,336



2,390



7,822



6,802

Data processing


3,108



2,847



2,755



2,748



2,661



8,710



8,152

Net loss recognized on other real estate owned and other related expenses


42



389



621



495



349



1,052



1,324

Other intangible assets amortization expense


1,738



1,848



1,749



1,892



1,947



5,335



5,732

Other non-interest expense


4,447



4,052



2,967



9,813



3,941



11,466



12,460

Total non-interest expense


44,180



42,981



38,842



47,021



41,687



126,003



122,401

INCOME BEFORE PROVISION FOR INCOME TAXES


33,808



38,164



29,173



16,453



18,331



101,145



35,214

PROVISION FOR INCOME TAXES


8,502



9,672



7,375



4,162



5,260



25,549



10,038

NET INCOME


25,306



28,492



21,798



12,291



13,071



75,596



25,176

Dividends on preferred shares


196



195



196



196



196



587



587

INCOME AVAILABLE TO COMMON STOCKHOLDERS

$
25,110


$
28,297


$
21,602


$
12,095


$
12,875


$
75,009


$
24,589

EARNINGS PER COMMON SHARE





















Basic

$
0.68


$
0.75


$
0.57


$
0.32


$
0.34


$
1.99


$
0.65

Diluted

$
0.66


$
0.73


$
0.56


$
0.31


$
0.34


$
1.95


$
0.64

BYLINE BANCORP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA (unaudited)







As of or For the Three Months Ended

As of or For the Nine Months Ended
(dollars in thousands, except share
September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,
and per share data)
2021

2021

2021

2020

2020

2021

2020
Common Share Data




















Summary of Operations




















Net interest income
$
59,845


$
58,174


$
56,640


$
56,020


$
53,524


$
174,659


$
158,958

Provision/(recapture) for loan and lease losses

352



(1,969
)


4,367



10,236



15,740



2,750



45,713

Non-interest income

18,495



21,002



15,742



17,690



22,234



55,239



44,370

Non-interest expense

44,180



42,981



38,842



47,021



41,687



126,003



122,401

Income before provision for income taxes

33,808



38,164



29,173



16,453



18,331



101,145



35,214

Provision for income taxes

8,502



9,672



7,375



4,162



5,260



25,549



10,038

Net income

25,306



28,492



21,798



12,291



13,071



75,596



25,176

Dividends on preferred shares

196



195



196



196



196



587



587

Net income available to common stockholders
$
25,110


$
28,297


$
21,602


$
12,095


$
12,875


$
75,009


$
24,589






















Earnings per Common Share




















Basic earnings per common share
$
0.68


$
0.75


$
0.57


$
0.32


$
0.34


$
1.99


$
0.65

Diluted earnings per common share
$
0.66


$
0.73


$
0.56


$
0.31


$
0.34


$
1.95


$
0.64

Adjusted diluted earnings per common share ^(2)(3)(4)
$
0.69


$
0.77


$
0.57


$
0.38


$
0.34


$
2.02


$
0.65

Weighted average common shares outstanding (basic)

37,200,778



37,965,658



38,164,201



38,202,665



38,057,350



37,773,350



37,973,694

Weighted average common shares outstanding (diluted)

38,018,301



38,696,036



38,915,482



38,574,129



38,249,335



38,523,112



38,251,963

Common shares outstanding

37,690,087



38,094,972



38,641,851



38,618,054



38,568,916



37,690,087



38,568,916

Cash dividends per common share
$
0.09


$
0.06


$
0.06


$
0.03


$
0.03


$
0.21


$
0.09

Dividend payout ratio on common stock

13.64
%


8.22
%


10.71
%


9.68
%


8.82
%


10.77
%


14.06
%
Tangible book value per common share ⁽¹⁾
$
17.16


$
16.74


$
15.85


$
16.12


$
15.81


$
17.16


$
15.81






















Key Ratios and Performance Metrics (annualized where applicable)




















Net interest margin, fully taxable equivalent ⁽¹⁾⁽⁵⁾

3.92
%


3.76
%


3.78
%


3.78
%


3.61
%


3.82
%


3.82
%
Average cost of deposits

0.08
%


0.08
%


0.12
%


0.15
%


0.22
%


0.09
%


0.43
%
Efficiency ratio ⁽²⁾

54.18
%


51.95
%


51.25
%


61.22
%


52.46
%


52.49
%


57.38
%
Adjusted efficiency ratio ^(1)(2)(3)

52.35
%


49.50
%


50.41
%


55.77
%


52.42
%


50.76
%


57.01
%
Non-interest expense to average assets

2.67
%


2.57
%


2.39
%


2.92
%


2.59
%


2.54
%


2.70
%
Adjusted non-interest expense to average assets ⁽¹⁾⁽³⁾

2.58
%


2.45
%


2.35
%


2.67
%


2.59
%


2.46
%


2.68
%
Return on average stockholders' equity

12.19
%


14.10
%


10.96
%


6.07
%


6.57
%


12.42
%


4.33
%
Adjusted return on average stockholders' equity ^(1)(3)(4)

12.69
%


14.80
%


11.18
%


7.50
%


6.58
%


12.90
%


4.42
%
Return on average assets

1.53
%


1.70
%


1.34
%


0.76
%


0.81
%


1.53
%


0.56
%
Adjusted return on average assets ^(1)(3)(4)

1.59
%


1.78
%


1.37
%


0.94
%


0.81
%


1.58
%


0.57
%
Non-interest income to total revenues ⁽¹⁾

23.61
%


26.53
%


21.75
%


24.00
%


29.35
%


24.03
%


21.82
%
Pre-tax pre-provision return on average assets ⁽¹⁾

2.07
%


2.16
%


2.06
%


1.66
%


2.12
%


2.10
%


1.79
%
Adjusted pre-tax pre-provision return on average assets ⁽¹⁾⁽³⁾

2.15
%


2.28
%


2.10
%


1.91
%


2.12
%


2.18
%


1.80
%
Return on average tangible common stockholders' equity ⁽¹⁾

16.22
%


18.87
%


14.86
%


8.61
%


9.39
%


16.66
%


6.51
%
Adjusted return on average tangible common stockholders' equity ⁽¹⁾⁽³⁾

16.86
%


19.77
%


15.15
%


10.47
%


9.40
%


17.27
%


6.63
%
Non-interest-bearing deposits to total deposits

41.06
%


41.03
%


40.12
%


37.09
%


35.73
%


41.06
%


35.73
%
Loans and leases held for sale and loans and lease held for investment to total deposits

90.29
%


88.26
%


89.23
%


91.51
%


91.96
%


90.29
%


91.96
%
Deposits to total liabilities

87.73
%


88.97
%


84.36
%


85.08
%


84.36
%


87.73
%


84.36
%
Deposits per branch
$
117,234


$
115,732


$
109,229


$
103,305


$
84,390


$
117,234


$
84,390























Asset Quality Ratios




















Non-performing loans and leases to total loans and leases held for investment, net before ALLL

0.75
%


0.79
%


0.83
%


0.95
%


0.99
%


0.75
%


0.99
%
ALLL to total loans and leases held for investment, net before ALLL

1.31
%


1.38
%


1.47
%


1.53
%


1.40
%


1.31
%


1.40
%
Net charge-offs to average total loans and leases held for investment, net before ALLL

0.13
%


0.17
%


0.47
%


0.47
%


0.53
%


0.25
%


0.53
%
Acquisition accounting adjustments ⁽⁴⁾
$
6,327


$
9,393


$
10,424


$
13,389


$
17,133


$
6,327


$
17,133






















Capital Ratios




















Common equity to total assets

12.14
%


12.33
%


11.61
%


12.44
%


12.07
%


12.14
%


12.07
%
Tangible common equity to tangible assets ⁽¹⁾

9.89
%


10.01
%


9.31
%


10.01
%


9.64
%


9.89
%


9.64
%
Leverage ratio

11.21
%


10.82
%


10.93
%


11.12
%


10.93
%


11.21
%


10.93
%
Common equity tier 1 capital ratio

11.32
%


11.97
%


12.09
%


12.20
%


12.55
%


11.32
%


12.55
%
Tier 1 capital ratio

12.32
%


13.05
%


13.20
%


13.36
%


13.77
%


12.32
%


13.77
%
Total capital ratio

14.78
%


15.74
%


15.96
%


16.18
%


16.67
%


14.78
%


16.67
%

(1)
Represents a non-GAAP financial measure. See “Reconciliation of non-GAAP Financial Measures” for a reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measure.
(2)
Represents non-interest expense less amortization of intangible assets divided by net interest income and non-interest income.
(3)
Calculation excludes impairment charges, merger-related expenses, and core systems conversion expense.
(4)
Represents the remaining net unaccreted discount as a result of applying the fair value adjustment at the time of the business combination on acquired loans.
(5)
Interest income and rates include the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis, assuming a federal income tax rate of 21%.

BYLINE BANCORP, INC. AND SUBSIDIARIES
QUARTER-TO-DATE STATEMENT OF AVERAGE INTEREST-EARNING ASSETS AND AVERAGE INTEREST-BEARING LIABILITIES
(unaudited)






For the Three Months Ended September 30,


2021

2020
(dollars in thousands)

Average Balance ⁽⁵⁾

Interest Inc / Exp

Average Yield / Rate

Average Balance ⁽⁵⁾

Interest Inc / Exp

Average Yield / Rate
ASSETS


















Cash and cash equivalents

$
40,088


$
19



0.19
%

$
48,678


$
25



0.20
%
Loans and leases ⁽¹⁾


4,539,111



56,291



4.92
%


4,360,203



51,036



4.66
%
Taxable securities


1,309,802



5,472



1.66
%


1,364,516



6,341



1.85
%
Tax-exempt securities ⁽²⁾


187,064



1,254



2.66
%


143,157



1,054



2.93
%
Total interest-earning assets

$
6,076,065


$
63,036



4.12
%

$
5,916,554


$
58,456



3.93
%
Allowance for loan and lease losses


(61,528
)








(53,964
)






All other assets


546,331









538,700







TOTAL ASSETS

$
6,560,868








$
6,401,290







LIABILITIES AND STOCKHOLDERS’ EQUITY


















Deposits


















Interest checking

$
653,543


$
228



0.14
%

$
565,917


$
226



0.16
%
Money market accounts


1,031,009



280



0.11
%


1,202,016



634



0.21
%
Savings


625,037



75



0.05
%


535,396



64



0.05
%
Time deposits


709,805



403



0.23
%


870,228



1,836



0.84
%
Total interest-bearing deposits


3,019,394



986



0.13
%


3,173,557



2,760



0.35
%
Other borrowings


426,284



349



0.33
%


538,237



465



0.34
%
Subordinated notes and debentures


110,195



1,592



5.73
%


100,756



1,485



5.86
%
Total borrowings


536,479



1,941



1.44
%


638,993



1,950



1.21
%
Total interest-bearing liabilities

$
3,555,873


$
2,927



0.33
%

$
3,812,549


$
4,710



0.49
%
Non-interest-bearing demand deposits


2,106,189









1,742,787







Other liabilities


75,052









54,844







Total stockholders’ equity


823,754









791,111







TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$
6,560,868








$
6,401,290







Net interest spread ⁽³⁾








3.79
%







3.44%

Net interest income, fully taxable equivalent




$
60,109








$
53,746




Net interest margin, fully taxable equivalent ⁽²⁾⁽⁴⁾








3.92
%








3.61
%
Tax-equivalent adjustment





(264
)


0.01
%





(222
)


0.01
%
Net interest income




$
59,845








$
53,524




Net interest margin ⁽⁴⁾








3.91
%








3.60
%



















Net loan accretion impact on margin




$
1,638



0.11
%




$
3,911



0.26
%

(1)
Loan and lease balances are net of deferred origination fees and costs and initial indirect costs. Non-accrual loans and leases are included in total loan and lease balances.
(2)
Interest income and rates include the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis, assuming a federal income tax rate of 21%.
(3)
Represents the average rate earned on interest-earning assets minus the average rate paid on interest-bearing liabilities.
(4)
Represents net interest income (annualized) divided by total average earning assets.
(5)
Average balances are average daily balances.

BYLINE BANCORP, INC. AND SUBSIDIARIES
YEAR-TO-DATE STATEMENT OF AVERAGE INTEREST-EARNING ASSETS AND AVERAGE INTEREST-BEARING LIABILITIES
(unaudited)






For the Nine Months Ended September 30,


2021

2020
(dollars in thousands)

Average Balance ⁽⁵⁾

Interest Inc / Exp

Average Yield / Rate

Average Balance ⁽⁵⁾

Interest Inc / Exp

Average Yield / Rate
ASSETS


















Cash and cash equivalents

$
56,926


$
75



0.18
%

$
48,861


$
207



0.57
%
Loans and leases ⁽¹⁾


4,487,909



164,423



4.90
%


4,148,465



155,347



5.00
%
Taxable securities


1,405,390



16,798



1.60
%


1,261,458



21,678



2.30
%
Tax-exempt securities ⁽²⁾


184,826



3,729



2.70
%


115,161



2,625



3.04
%
Total interest-earning assets

$
6,135,051


$
185,025



4.03
%

$
5,573,945


$
179,857



4.31
%
Allowance for loan and lease losses


(64,768
)








(43,584
)






All other assets


552,660









522,321







TOTAL ASSETS

$
6,622,943








$
6,052,682







LIABILITIES AND STOCKHOLDERS’ EQUITY


















Deposits


















Interest checking

$
609,444


$
647



0.14
%

$
432,785


$
651



0.20
%
Money market accounts


1,068,770



940



0.12
%


1,126,588



3,794



0.45
%
Savings


603,366



214



0.05
%


509,001



186



0.05
%
Time deposits


734,708



1,664



0.30
%


986,419



10,179



1.38
%
Total interest-bearing deposits


3,016,288



3,465



0.15
%


3,054,793



14,810



0.81
%
Other borrowings


572,018



1,333



0.31
%


531,395



2,838



0.71
%
Subordinated notes and debentures


110,029



4,785



5.81
%


59,591



2,699



6.05
%
Total borrowings


682,047



6,118



1.20
%


590,986



5,537



1.25
%
Total interest-bearing liabilities

$
3,698,335


$
9,583



0.35
%

$
3,645,779


$
20,347



0.75
%
Non-interest-bearing demand deposits


2,039,242









1,578,704







Other liabilities


71,737









50,677







Total stockholders’ equity


813,629









777,522







TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$
6,622,943








$
6,052,682







Net interest spread ⁽³⁾








3.68
%








3.56
%
Net interest income, fully taxable equivalent




$
175,442








$
159,510




Net interest margin, fully taxable equivalent ⁽²⁾⁽⁴⁾








3.82
%








3.82
%
Tax-equivalent adjustment





(783
)


0.01
%





(552
)


0.01
%
Net interest income




$
174,659








$
158,958




Net interest margin ⁽⁴⁾








3.81
%








3.81
%



















Net loan accretion impact on margin




$
5,001



0.11
%




$
10,754



0.26
%

(1)
Loan and lease balances are net of deferred origination fees and costs and initial indirect costs. Non-accrual loans and leases are included in total loan and lease balances.
(2)
Interest income and rates include the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis, assuming a federal income tax rate of 21%.
(3)
Represents the average rate earned on interest-earning assets minus the average rate paid on interest-bearing liabilities.
(4)
Represents net interest income (annualized) divided by total average earning assets.
(5)
Average balances are average daily balances.

BYLINE BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)

Non-GAAP Financial Measures

This release contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These measures include adjusted net income, adjusted diluted earnings per share, adjusted efficiency ratio, adjusted non-interest expense to average assets, tax-equivalent net interest margin, non-interest income to total revenues, adjusted return on average stockholders’ equity, adjusted return on average assets, pre-tax pre-provision return on average assets, adjusted pre-tax pre-provision return on average assets, tangible book value per common share, tangible common equity to tangible assets, return on average tangible common stockholders' equity, and adjusted return on average tangible common stockholders' equity. Management believes that these non-GAAP financial measures provide useful information to management and investors that is supplementary to the Company’s financial condition, results of operations and cash flows computed in accordance with GAAP; however, management acknowledges that our non-GAAP financial measures have a number of limitations. As such, these disclosures should not be viewed as a substitute for results determined in accordance with GAAP financial measures that we and other companies use. Management also uses these measures for peer comparison. See below in the financial schedules included in this press release for a reconciliation of the non-GAAP financial measures to the comparable GAAP financial measures. Additionally, please refer to the Company’s Annual Report on Form 10-K for the detailed definitions of these non-GAAP financial measures.



As of or For the Three Months Ended

As of or For the Nine Months Ended
(dollars in thousands, except per share data)

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

September 30, 2021

September 30, 2020
Net income and earnings per share excluding significant items





















Reported Net Income

$
25,306


$
28,492


$
21,798


$
12,291


$
13,071


$
75,596


$
25,176

Significant items:





















Impairment charges on assets held for sale


1,435



1,942



604



4,022



32



3,981



747

Tax benefit


(391
)


(529
)


(165
)


(1,120
)


(9
)


(1,085
)


(208
)
Adjusted Net Income

$
26,350


$
29,905


$
22,237


$
15,193


$
13,094


$
78,492


$
25,715

Reported Diluted Earnings per Share

$
0.66


$
0.73


$
0.56


$
0.31


$
0.34


$
1.95


$
0.64

Significant items:





















Impairment charges on assets held for sale


0.04



0.05



0.02



0.10



—



0.10



0.02

Tax benefit


(0.01
)


(0.01
)


(0.01
)


(0.03
)


—



(0.03
)


(0.01
)
Adjusted Diluted Earnings per Share

$
0.69


$
0.77


$
0.57


$
0.38


$
0.34


$
2.02


$
0.65

BYLINE BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited)









As of or For the Three Months Ended

As of or For the Nine Months Ended
(dollars in thousands, except per share data, ratios annualized, where applicable)

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

September 30, 2021

September 30, 2020
Adjusted non-interest expense:





















Non-interest expense

$
44,180


$
42,981


$
38,842


$
47,021


$
41,687


$
126,003


$
122,401

Less: Significant items





















Impairment charges on assets held for sale


1,435



1,942



604



4,022



32



3,981



747

Adjusted non-interest expense

$
42,745


$
41,039


$
38,238


$
42,999


$
41,655


$
122,022


$
121,654

Adjusted non-interest expense excluding amortization of intangible assets:





















Adjusted non-interest expense

$
42,745


$
41,039


$
38,238


$
42,999


$
41,655


$
122,022


$
121,654

Less: Amortization of intangible assets


1,738



1,848



1,749



1,892



1,947



5,335



5,732

Adjusted non-interest expense excluding amortization of intangible assets

$
41,007


$
39,191


$
36,489


$
41,107


$
39,708


$
116,687


$
115,922

Pre-tax pre-provision net income:





















Pre-tax income

$
33,808


$
38,164


$
29,173


$
16,453


$
18,331


$
101,145


$
35,214

Add: Provision/(recapture) for loan and lease losses


352



(1,969
)


4,367



10,236



15,740



2,750



45,713

Pre-tax pre-provision net income

$
34,160


$
36,195


$
33,540


$
26,689


$
34,071


$
103,895


$
80,927

Adjusted pre-tax pre-provision net income:





















Pre-tax pre-provision net income

$
34,160


$
36,195


$
33,540


$
26,689


$
34,071


$
103,895


$
80,927

Impairment charges on assets held for sale


1,435



1,942



604



4,022



32



3,981



747

Adjusted pre-tax pre-provision net income

$
35,595


$
38,137


$
34,144


$
30,711


$
34,103


$
107,876


$
81,674

Tax equivalent net interest income





















Net interest income

$
59,845


$
58,174


$
56,640


$
56,020


$
53,524


$
174,659


$
158,958

Add: Tax-equivalent adjustment


264



269



250



240



222



783



552

Net interest income, fully taxable equivalent

$
60,109


$
58,443


$
56,890


$
56,260


$
53,746


$
175,442


$
159,510

Total revenues:





















Net interest income

$
59,845


$
58,174


$
56,640


$
56,020


$
53,524


$
174,659


$
158,958

Add: Non-interest income


18,495



21,002



15,742



17,690



22,234



55,239



44,370

Total revenues

$
78,340


$
79,176


$
72,382


$
73,710


$
75,758


$
229,898


$
203,328

Tangible common stockholders' equity:





















Total stockholders' equity

$
824,418


$
817,073


$
793,795


$
805,464


$
794,696


$
824,418


$
794,696

Less: Preferred stock


10,438



10,438



10,438



10,438



10,438



10,438



10,438

Less: Goodwill and other intangibles


167,296



169,034



170,882



172,631



174,523



167,296



174,523

Tangible common stockholders' equity

$
646,684


$
637,601


$
612,475


$
622,395


$
609,735


$
646,684


$
609,735

Tangible assets:





















Total assets

$
6,704,451


$
6,540,602


$
6,750,125


$
6,390,652


$
6,496,513


$
6,704,451


$
6,496,513

Less: Goodwill and other intangibles


167,296



169,034



170,882



172,631



174,523



167,296



174,523

Tangible assets

$
6,537,155


$
6,371,568


$
6,579,243


$
6,218,021


$
6,321,990


$
6,537,155


$
6,321,990

Average tangible common stockholders' equity:





















Average total stockholders' equity

$
823,754


$
810,490


$
806,452


$
805,593


$
791,111


$
813,629


$
777,522

Less: Average preferred stock


10,438



10,438



10,438



10,438



10,438



10,438



10,438

Less: Average goodwill and other intangibles


168,140



169,906



171,795



173,536



175,443



169,934



177,426

Average tangible common stockholders' equity

$
645,176


$
630,146


$
624,219


$
621,619


$
605,230


$
633,257


$
589,658

Average tangible assets:





















Average total assets

$
6,560,868


$
6,720,492


$
6,587,765


$
6,400,621


$
6,401,290


$
6,622,943


$
6,052,682

Less: Average goodwill and other intangibles


168,140



169,906



171,795



173,536



175,443



169,934



177,426

Average tangible assets

$
6,392,728


$
6,550,586


$
6,415,970


$
6,227,085


$
6,225,847


$
6,453,009


$
5,875,256

Tangible net income available to common stockholders:





















Net income available to common stockholders

$
25,110


$
28,297


$
21,602


$
12,095


$
12,875


$
75,009


$
24,589

Add: After-tax intangible asset amortization


1,265



1,344



1,272



1,365



1,405



3,881



4,136

Tangible net income available to common stockholders

$
26,375


$
29,641


$
22,874


$
13,460


$
14,280


$
78,890


$
28,725

Adjusted tangible net income available to common stockholders:





















Tangible net income available to common stockholders

$
26,375


$
29,641


$
22,874


$
13,460


$
14,280


$
78,890


$
28,725

Impairment charges on assets held for sale


1,435



1,942



604



4,022



32



3,981



747

Tax benefit on significant items


(391
)


(529
)


(165
)


(1,120
)


(9
)


(1,085
)


(208
)
Adjusted tangible net income available to common stockholders

$
27,419


$
31,054


$
23,313


$
16,362


$
14,303


$
81,786


$
29,264

BYLINE BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited)









As of or For the Three Months Ended

As of or For the Nine Months Ended
(dollars in thousands, except share and per share data, ratios annualized, where applicable)

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

September 30, 2021

September 30, 2020
Pre-tax pre-provision return on average assets:





















Pre-tax pre-provision net income

$
34,160


$
36,195


$
33,540


$
26,689


$
34,071


$
103,895


$
80,927

Average total assets


6,560,868



6,720,492



6,587,765



6,400,621



6,401,290



6,622,943



6,052,682

Pre-tax pre-provision return on average assets


2.07
%


2.16
%


2.06
%


1.66
%


2.12
%


2.10
%


1.79
%
Adjusted pre-tax pre-provision return on average assets:





















Adjusted pre-tax pre-provision net income

$
35,595


$
38,137


$
34,144


$
30,711


$
34,103


$
107,876


$
81,674

Average total assets


6,560,868



6,720,492



6,587,765



6,400,621



6,401,290



6,622,943



6,052,682

Adjusted pre-tax pre-provision return on average assets


2.15
%


2.28
%


2.10
%


1.91
%


2.12
%


2.18
%


1.80
%
Net interest margin, fully taxable equivalent





















Net interest income, fully taxable equivalent

$
60,109


$
58,443


$
56,890


$
56,260


$
53,746


$
175,442


$
159,510

Total average interest-earning assets


6,076,065



6,231,616



5,913,746



5,916,554



5,916,554



6,135,051



5,573,945

Net interest margin, fully taxable equivalent


3.92
%


3.76
%


3.78
%


3.78
%


3.61
%


3.82
%


3.82
%
Non-interest income to total revenues:





















Non-interest income

$
18,495


$
21,002


$
15,742


$
17,690


$
22,234


$
55,239


$
44,370

Total revenues


78,340



79,176



72,382



73,710



75,758



229,898



203,328

Non-interest income to total revenues


23.61
%


26.53
%


21.75
%


24.00
%


29.35
%


24.03
%


21.82
%
Adjusted non-interest expense to average assets:





















Adjusted non-interest expense

$
42,745


$
41,039


$
38,238


$
42,999


$
41,655


$
122,022


$
121,654

Average total assets


6,560,868



6,720,492



6,587,765



6,400,621



6,401,290



6,622,943



6,052,682

Adjusted non-interest expense to average assets


2.58
%


2.45
%


2.35
%


2.67
%


2.59
%


2.46
%


2.68
%
Adjusted efficiency ratio:





















Adjusted non-interest expense excluding amortization of intangible assets

$
41,007


$
39,191


$
36,489


$
41,107


$
39,708


$
116,687


$
115,922

Total revenues


78,340



79,176



72,382



73,710



75,758



229,898



203,328

Adjusted efficiency ratio


52.35
%


49.50
%


50.41
%


55.77
%


52.42
%


50.76
%


57.01
%
Adjusted return on average assets:





















Adjusted net income

$
26,350


$
29,905


$
22,237


$
15,193


$
13,094


$
78,492


$
25,715

Average total assets


6,560,868



6,720,492



6,587,765



6,400,621



6,401,290



6,622,943



6,052,682

Adjusted return on average assets


1.59
%


1.78
%


1.37
%


0.94
%


0.81
%


1.58
%


0.57
%
Adjusted return on average stockholders' equity:





















Adjusted net income

$
26,350


$
29,905


$
22,237


$
15,193


$
13,094


$
78,492


$
25,715

Average stockholders' equity


823,754



810,490



806,452



805,593



791,111



813,629



777,522

Adjusted return on average stockholders' equity


12.69
%


14.80
%


11.18
%


7.50
%


6.58
%


12.90
%


4.42
%
Tangible common equity to tangible assets:





















Tangible common equity

$
646,684


$
637,601


$
612,475


$
622,395


$
609,735


$
646,684


$
609,735

Tangible assets


6,537,155



6,371,568



6,579,243



6,218,021



6,321,990



6,537,155



6,321,990

Tangible common equity to tangible assets


9.89
%


10.01
%


9.31
%


10.01
%


9.64
%


9.89
%


9.64
%
Return on average tangible common stockholders' equity:





















Tangible net income available to common stockholders

$
26,375


$
29,641


$
22,874


$
13,460


$
14,280


$
78,890


$
28,725

Average tangible common stockholders' equity


645,176



630,146



624,219



621,619



605,230



633,257



589,658

Return on average tangible common stockholders' equity


16.22
%


18.87
%


14.86
%


8.61
%


9.39
%


16.66
%


6.51
%
Adjusted return on average tangible common stockholders' equity:





















Adjusted tangible net income available to common stockholders

$
27,419


$
31,054


$
23,313


$
16,362


$
14,303


$
81,786


$
29,264

Average tangible common stockholders' equity


645,176



630,146



624,219



621,619



605,230



633,257



589,658

Adjusted return on average tangible common stockholders' equity


16.86
%


19.77
%


15.15
%


10.47
%


9.40
%


17.27
%


6.63
%
Tangible book value per share:





















Tangible common equity

$
646,684


$
637,601


$
612,475


$
622,395


$
609,735


$
646,684


$
609,735

Common shares outstanding


37,690,087



38,094,972



38,641,851



38,618,054



38,568,916



37,690,087



38,568,916

Tangible book value per share

$
17.16


$
16.74


$
15.85


$
16.12


$
15.81


$
17.16


$
15.81

View source version on businesswire.com: https://www.businesswire.com/news/home/20211028006188/en/

Investors:
Brooks Rennie
Investor Relations Manager
312-660-5805
brennie@bylinebank.com

Media:
Erin O’Neill
Director of Marketing
773-475-2901
eoneill@bylinebank.com

Company Name:	Byline Bancorp Inc.
Stock Symbol:	BY
Market:	NYSE
Website:	bylinebancorp.com

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