BY - Byline Bancorp Inc. Reports Third Quarter 2022 Financial Results

October, 27 2022 04:17 PM Byline Bancorp Inc.

Select Third Quarter 2022 Financial Highlights

Net income of $22.7 million, or $0.61 per diluted share
Net interest income of $68.9 million and $12.0 million of non-interest income
- Total revenue ¹ of $80.9 million
Net interest margin of 4.04%
Return on average assets of 1.26%
Efficiency ratio of 55.11%
Originated loans and leases increased $134.3 million, loan and lease production, net of loan sales of $303.2 million
Total deposits increased $224.1 million to $5.6 billion
Common Equity Tier 1 to risk weighted assets of 10.24%

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 $22.7 million, or $0.61 per diluted share, for the third quarter of 2022 compared with net income of $20.3 million, or $0.54 per diluted share, for the second quarter of 2022, and net income of $25.3 million, or $0.66 per diluted share, for the third quarter 2021.

Roberto R. Herencia, Executive Chairman and Chief Executive Officer of Byline Bancorp, Inc., commented, “Byline delivered a strong third quarter with record revenues, driven by expansion in net interest income supported by loan, lease and deposit growth and the benefit of higher interest rates. We continue to focus on maintaining a healthy balance sheet and strong capital and liquidity positions. Given the uncertain economic environment, we are preparing for a range of possible outcomes and will continue to manage the bank in a prudent, disciplined manner. I want to thank our employees for their dedication to helping our customers, communities, and shareholders.”

Alberto J. Paracchini, President of Byline Bancorp, Inc. added, “Our performance was balanced and resilient in an uncertain and difficult environment, delivering solid financial results for the third quarter. Our net interest margin increased and thanks to our bankers and team members, we continued to experience healthy growth on our balance sheet. While the loan and lease portfolio continues to perform well, we believe our consistently strong underwriting and credit risk management practices prepare us well for changes in the business cycle.”

Board Declares Cash Dividend of $0.09 per Share

On October 25, 2022, the Company's Board of Directors declared a cash dividend of $0.09 per share, payable on November 22, 2022, to stockholders of record of the Company's common stock as of November 8, 2022.

STATEMENTS OF OPERATIONS

Net Interest Income

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, 2022

June 30, 2022

September 30, 2021
(dollars in thousands)
Average Balance ⁽⁵⁾

Interest Inc / Exp

Avg. Yield / Rate

Average Balance ⁽⁵⁾

Interest Inc / Exp

Avg. Yield / Rate

Average Balance ⁽⁵⁾

Interest Inc / Exp

Avg. Yield / Rate
ASSETS

















Cash and cash equivalents
$
77,522


$
210

1.08
%

$
66,034


$
74

0.45
%

$
40,088


$
19

0.19
%
Loans and leases ⁽¹⁾

5,218,135



72,824

5.54
%


5,009,077



59,674

4.78
%


4,539,111



56,291

4.92
%
Taxable securities

1,302,375



6,014

1.83
%


1,330,200



5,904

1.78
%


1,309,802



5,472

1.66
%
Tax-exempt securities ⁽²⁾

162,591



1,083

2.64
%


168,567



1,131

2.69
%


187,064



1,254

2.66
%
Total interest-earning assets
$
6,760,623


$
80,131

4.70
%

$
6,573,878


$
66,783

4.07
%

$
6,076,065


$
63,036

4.12
%
Allowance for loan and lease losses

(62,733
)






(59,883
)






(61,528
)




All other assets

447,299







461,730







546,331





TOTAL ASSETS
$
7,145,189






$
6,975,725






$
6,560,868





LIABILITIES AND STOCKHOLDERS’ EQUITY

















Deposits

















Interest checking
$
583,777


$
1,077

0.73
%

$
615,831


$
415

0.27
%

$
653,543


$
228

0.14
%
Money market accounts

1,391,923



3,358

0.96
%


1,307,320



1,194

0.37
%


1,031,009



280

0.11
%
Savings

673,966



247

0.15
%


664,954



83

0.05
%


625,037



75

0.05
%
Time deposits

687,124



1,289

0.74
%


627,199



436

0.28
%


709,805



403

0.23
%
Total interest-bearing deposits

3,336,790



5,971

0.71
%


3,215,304



2,128

0.27
%


3,019,394



986

0.13
%
Other borrowings

607,471



3,232

2.11
%


497,082



1,083

0.87
%


426,284



349

0.33
%
Federal funds purchased

—



—

0.00
%


2,527



14

2.32
%


—



—

0.00
%
Subordinated notes and debentures

110,799



1,825

6.54
%


110,649



1,694

6.14
%


110,195



1,592

5.73
%
Total borrowings

718,270



5,057

2.79
%


610,258



2,791

1.83
%


536,479



1,941

1.44
%
Total interest-bearing liabilities
$
4,055,060


$
11,028

1.08
%

$
3,825,562


$
4,919

0.52
%

$
3,555,873


$
2,927

0.33
%
Non-interest-bearing demand deposits

2,198,095







2,265,426







2,106,189





Other liabilities

116,676







104,085







75,052





Total stockholders’ equity

775,358







780,652







823,754





TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
7,145,189






$
6,975,725






$
6,560,868





Net interest spread ⁽³⁾




3.62
%





3.55
%





3.79
%
Net interest income, fully taxable equivalent


$
69,103





$
61,864





$
60,109


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




4.05
%





3.77
%





3.92
%
Less: Tax-equivalent adjustment



228

0.01
%




237

0.01
%




264

0.01
%
Net interest income


$
68,875





$
61,627





$
59,845


Net interest margin ⁽⁴⁾




4.04
%





3.76
%





3.91
%


















Net loan accretion impact on margin


$
1,559

0.09
%



$
1,383

0.08
%



$
1,638

0.11
%

(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.

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









September 30, 2022


Three Months Ended

Change from


September 30,

June 30,

September 30,

June 30,

September 30,
(dollars in thousands)

2022

2022

2021

2022

2021
INTEREST AND DIVIDEND INCOME












Interest and fees on loans and leases

$
72,824

$
59,674

$
56,291

22.0
%

29.4
%
Interest on securities


6,402


6,264


5,534

2.2
%

15.7
%
Other interest and dividend income


677


608


947

11.4
%

(28.5
)%
Total interest and dividend income


79,903


66,546


62,772

20.1
%

27.3
%
INTEREST EXPENSE












Deposits


5,971


2,128


986

180.6
%

505.6
%
Other borrowings


3,232


1,097


349

194.5
%

824.8
%
Subordinated notes and debentures


1,825


1,694


1,592

7.8
%

14.7
%
Total interest expense


11,028


4,919


2,927

124.2
%

276.8
%
Net interest income

$
68,875

$
61,627

$
59,845

11.8
%

15.1
%

Net interest income for the third quarter of 2022 was $68.9 million, an increase of $7.2 million, or 11.8%, from the second quarter of 2022, driven mainly by the rising interest rate environment.

The increase in net interest income was primarily due to:

An increase of $13.2 million in interest income and fees on loans and leases due to higher yields and growth in the originated loan and lease portfolio.

Partially offset by:

An increase of $3.8 million in deposit interest expense due to higher rates paid on deposits and growth in interest-bearing deposits; and
An increase of $2.1 million in interest expense on other borrowings due to rates paid on higher average balances of FHLB advances.

Tax-equivalent net interest margin for the third quarter of 2022 was 4.05%, an increase of 28 basis points compared to the second quarter of 2022. Total net accretion income on acquired loans contributed nine basis points to the net interest margin for the third quarter of 2022 compared to eight basis points for the second quarter of 2022, an increase of one basis point.

The average cost of total deposits was 0.43% for the third quarter of 2022, an increase of 27 basis points compared to the second quarter of 2022. Average non-interest-bearing demand deposits were 39.7% of average total deposits for the third quarter of 2022 compared to 41.3% during the second quarter of 2022.

Provision for Loan and Lease Losses

The provision for loan and lease losses was $4.2 million for the third quarter of 2022, a decrease of $1.7 million compared to $5.9 million for the second quarter of 2022. The decrease in provision during the third quarter of 2022 was primarily driven by lower growth in the originated loan and lease portfolio, which reduced the impact of qualitative factors surrounding the macroeconomic environment and rising interest rates. This decrease was partially offset by increases in specific reserves on impaired loans.

Non-interest Income

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









September 30, 2022


Three Months Ended

Change from


September 30,

June 30,

September 30,

June 30,

September 30,
(dollars in thousands)

2022

2022

2021

2022

2021
NON-INTEREST INCOME










Fees and service charges on deposits

$
2,128


$
2,059


$
1,867


3.4
%

14.0
%
Loan servicing revenue


3,422



3,384



3,344


1.1
%

2.4
%
Loan servicing asset revaluation


(2,342
)


(4,636
)


(2,650
)

(49.5
)%

(11.6
)%
ATM and interchange fees


1,007



1,131



1,201


(11.0
)%

(16.1
)%
Net realized gains (losses) on securities available-for-sale


(2
)


52



130


NM


NM

Change in fair value of equity securities, net


(581
)


(697
)


(275
)

(16.7
)%

111.0
%
Net gains on sales of loans


5,580



9,983



12,761


(44.1
)%

(56.3
)%
Wealth management and trust income


995



900



815


10.7
%

22.2
%
Other non-interest income


1,785



1,985



1,302


(10.2
)%

37.0
%
Total non-interest income

$
11,992


$
14,161


$
18,495


(15.3
)%

(35.2
)%

Non-interest income for the third quarter of 2022 was $12.0 million, a decrease of $2.2 million or 15.3%, compared to $14.2 million for the second quarter of 2022.

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

A decrease of $4.4 million in net gains on sales of loans due to lower volume of loan sales and lower average premiums.

Partially offset by:

A decrease of $2.3 million in the downward valuation adjustment to the loan servicing asset, due to changes in discount rates and lower prepayments compared to the prior quarter.

During the third quarter of 2022, we sold $75.4 million of U.S. government guaranteed loans compared to $118.5 million during the second quarter of 2022.

Non-interest Expense

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









September 30, 2022


Three Months Ended

Change from


September 30,

June 30,

September 30,

June 30,

September 30,
(dollars in thousands)

2022

2022

2021

2022

2021
NON-INTEREST EXPENSE










Salaries and employee benefits

$
29,587

$
27,697

$
25,978

6.8
%

13.9
%
Occupancy and equipment expense, net


3,919


4,409


4,982

(11.1
)%

(21.3
)%
Impairment charge on assets held for sale


—


—


1,434

NM


NM

Loan and lease related expenses


530


942


1,175

(43.6
)%

(54.8
)%
Legal, audit and other professional fees


2,733


1,820


2,710

50.1
%

0.8
%
Data processing


3,370


3,396


3,108

(0.8
)%

8.4
%
Net loss recognized on other real estate owned and other related expenses


275


158


42

74.4
%

NM

Other intangible assets amortization expense


1,611


1,868


1,738

(13.7
)%

(7.3
)%
Other non-interest expense


4,153


3,483


3,013

19.2
%

37.9
%
Total non-interest expense

$
46,178

$
43,773

$
44,180

5.5
%

4.5
%

Non-interest expense for the third quarter of 2022 was $46.2 million, an increase of $2.4 million, or 5.5%, from $43.8 million for the second quarter of 2022.

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

An increase of $1.9 million in salaries and employee benefits due to increased headcount and higher commissions;
An increase of $913,000 in legal, audit and other professional fees related to higher second quarter reimbursements; and
An increase of $670,000 in other non-interest expense mainly related to new advertising campaigns.

Partially offset by:

A decrease of $490,000 in occupancy and equipment expense, net, due to the impact from branch consolidations.

Our efficiency ratio was 55.11% for the third quarter of 2022 compared to 55.29% for the second quarter of 2022.

INCOME TAXES

We recorded income tax expense of $7.9 million during the third quarter of 2022, compared to $5.8 million during the second quarter of 2022. The effective tax rate was 25.7% and 22.3% for the third quarter of 2022 and second quarter of 2022, respectively. The increase in the effective tax rate is a result of tax benefits related to share-based compensation taken during the second quarter.

STATEMENTS OF FINANCIAL CONDITION

Total assets were $7.3 billion at September 30, 2022, an increase of $145.9 million compared to $7.1 billion at June 30, 2022.

The current quarter increase was primarily due to:

An increase in net loans and leases of $105.2 million primarily due to growth in originated commercial and industrial loans and the lease financing receivables portfolio.

Partially offset by:

A decrease in securities available-for-sale of $91.5 million primarily due to changes in market value.

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



September 30, 2022

June 30, 2022

September 30, 2021
(dollars in thousands)

Amount

% of Total

Amount

% of Total

Amount

% of Total
Originated loans and leases












Commercial real estate

$
1,652,890


31.3
%

$
1,672,438


32.4
%

$
1,298,454


28.2
%
Residential real estate


410,285


7.8
%


401,095


7.7
%


387,578


8.4
%
Construction, land development, and other land


456,463


8.7
%


434,132


8.4
%


336,460


7.3
%
Commercial and industrial


1,938,320


36.7
%


1,861,582


36.0
%


1,480,076


32.1
%
Paycheck Protection Program


1,522


0.0
%


10,391


0.2
%


268,081


5.8
%
Installment and other


1,016


0.0
%


926


0.0
%


998


0.0
%
Leasing financing receivables


492,744


9.3
%


438,379


8.5
%


331,149


7.2
%
Total originated loans and leases

$
4,953,240


93.8
%

$
4,818,943


93.2
%

$
4,102,796


89.0
%
Acquired impaired loans












Commercial real estate

$
56,974


1.1
%

$
60,075


1.2
%

$
84,821


1.8
%
Residential real estate


37,246


0.7
%


39,902


0.8
%


61,893


1.3
%
Construction, land development, and other land


1,144


0.0
%


1,184


0.0
%


1,746


0.1
%
Commercial and industrial


3,029


0.1
%


3,232


0.1
%


6,651


0.1
%
Installment and other


153


0.0
%


157


0.0
%


169


0.0
%
Total acquired impaired loans

$
98,546


1.9
%

$
104,550


2.1
%

$
155,280


3.3
%
Acquired non-impaired loans and leases












Commercial real estate

$
159,130


3.0
%

$
167,425


3.2
%

$
235,103


5.1
%
Residential real estate


34,313


0.7
%


40,174


0.8
%


58,283


1.3
%
Construction, land development, and other land


—


0.0
%


191


0.0
%


206


0.0
%
Commercial and industrial


26,959


0.5
%


32,569


0.6
%


49,678


1.1
%
Installment and other


199


0.0
%


227


0.0
%


275


0.0
%
Leasing financing receivables


3,084


0.1
%


3,992


0.1
%


7,607


0.2
%
Total acquired non-impaired loans and leases

$
223,685


4.3
%

$
244,578


4.7
%

$
351,152


7.7
%
Total loans and leases

$
5,275,471


100.0
%

$
5,168,071


100.0
%

$
4,609,228


100.0
%
Allowance for loan and lease losses


(64,655
)




(62,436
)




(60,598
)


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

$
5,210,816




$
5,105,635




$
4,548,630

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:









September 30, 2022








Change from
(dollars in thousands)

September 30, 2022

June 30, 2022

September 30, 2021

June 30, 2022

September 30, 2021
Non-performing assets:










Non-accrual loans and leases

$
35,165


$
33,944


$
34,465


3.6
%

2.0
%
Past due loans and leases 90 days or more and still accruing interest


—



—



—


—
%

—
%
Total non-performing loans and leases

$
35,165


$
33,944


$
34,465


3.6
%

2.0
%
Other real estate owned


4,402



4,749



3,033


(7.3
)%

45.1
%
Total non-performing assets

$
39,567


$
38,693


$
37,498


2.3
%

5.5
%
Accruing troubled debt restructured loans ⁽¹⁾

$
737


$
1,358


$
2,366


(45.8
)%

(68.8
)%
Total non-performing loans and leases as a percentage of total loans and leases


0.67
%


0.66
%


0.75
%




Total non-performing assets as a percentage of total assets


0.54
%


0.54
%


0.56
%




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


183.86
%


183.94
%


175.82
%















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










Non-accrual loans guaranteed

$
1,676


$
1,731


$
6,326


(3.2
)%

(73.5
)%
Past due loans 90 days or more and still accruing interest guaranteed


—



—



—


—
%

—
%
Total non-performing loans guaranteed

$
1,676


$
1,731


$
6,326


(3.2
)%

(73.5
)%
Accruing troubled debt restructured loans guaranteed ⁽¹⁾

$
—


$
—


$
—


—
%

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


0.63
%


0.62
%


0.61
%




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


0.52
%


0.52
%


0.46
%

(1)

Accruing troubled debt restructured loans are not included in total non-performing loans and leases or in non-performing assets.

Variances in non-performing assets were:

Non-performing loans and leases were $35.2 million at September 30, 2022, an increase of $1.2 million from $33.9 million at June 30, 2022, primarily due to one new conventional non-performing relationship.
Other real estate owned was $4.4 million at September 30, 2022, a decrease of $347,000 from $4.7 million at June 30, 2022, primarily due to the sale of one property.

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)

2022

2022

2021
Allowance for loan and lease losses, beginning of period

$
62,436


$
59,458


$
61,719

Provision for loan and lease losses


4,176



5,908



352

Net charge-offs of loans and leases


(1,957
)


(2,930
)


(1,473
)
Allowance for loan and lease losses, end of period

$
64,655


$
62,436


$
60,598











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


1.23
%


1.21
%


1.31
%
Net charge-offs to average total loans and leases held for investment, net before ALLL


0.15
%


0.24
%


0.13
%
Provision for loan and lease losses to net charge-offs during the period


2.13
x


2.02
x


0.24
x

The allowance for loan and lease losses as a percentage of total loans and leases held for investment increased to 1.23% at September 30, 2022 compared to 1.21% at June 30, 2022, primarily due to higher provision to net charge-offs for the third quarter 2022.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance on the recognition of credit losses, otherwise known as "CECL", which replaces the incurred loss impairment methodology with a methodology that reflects current expected credit losses. In November 2019, the FASB delayed the effective date of the standard for smaller reporting companies, which includes emerging growth companies. The Company will adopt the standard on December 31, 2022. The new guidance may result in an increase in the allowance for loan and lease losses, which will reflect the requirement to include expected losses on purchased credit-impaired loans. The extent of the increase will depend on the composition of the loan and lease portfolio, as well as the economic conditions and forecasts as of the adoption date.

Net Charge-Offs

Net charge-offs during the third quarter of 2022 were $2.0 million, or 0.15% of average loans and leases, on an annualized basis, a decrease of $973,000 compared to $2.9 million, or 0.24% of average loans and leases, during the second quarter of 2022, and an increase of $484,000 from $1.5 million or 0.13% of average loans and leases from the comparable period a year ago.

Net charge-offs for the third quarter of 2022 included $1.9 million in the unguaranteed portion of U.S. government guaranteed loans, while net charge-offs for the second quarter of 2022 and third quarter of 2021 included $2.7 million and $1.3 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:








September 30, 2022







Change from
(dollars in thousands)
September 30, 2022

June 30, 2022

September 30, 2021

June 30, 2022

September 30, 2021
Non-interest-bearing demand deposits
$
2,142,183

$
2,180,927

$
2,117,749

(1.8
)%

1.2
%
Interest-bearing checking accounts

616,139


535,856


652,824

15.0
%

(5.6
)%
Money market demand accounts

1,485,815


1,323,287


1,057,419

12.3
%

40.5
%
Other savings

669,734


669,164


627,294

0.1
%

6.8
%
Time deposits (below $250,000)

586,198


544,759


553,364

7.6
%

5.9
%
Time deposits ($250,000 and above)

112,387


134,384


149,628

(16.4
)%

(24.9
)%
Total deposits
$
5,612,456

$
5,388,377

$
5,158,278

4.2
%

8.8
%

Total deposits increased to $5.6 billion at September 30, 2022 compared to $5.4 billion at June 30, 2022. Non-interest-bearing deposits were 38.2% and 40.5% of total deposits at September 30, 2022 and June 30, 2022, respectively.

The increase in deposits in the current quarter was primarily due to:

An increase in money market demand accounts of $162.5 million, due to increases in consumer deposits; and
An increase in interest bearing checking accounts of $80.3 million, principally due to increases in commercial deposits.

Total borrowings and other liabilities were $917.6 million at September 30, 2022, a decrease of $60.6 million from $978.2 million at June 30, 2022, primarily driven by decreases in Federal Home Loan Bank advances.

Stockholders’ Equity

Total stockholders’ equity was $747.6 million at September 30, 2022, a decrease of $17.6 million from $765.2 million at June 30, 2022. The decrease was primarily due to an increase in accumulated other comprehensive loss.

Under its stock repurchase program, the Company repurchased 174,249 shares of its common stock at an average price of $23.84 per share during the third quarter of 2022.

The following table presents actual regulatory capital dollar amounts and ratios of the Company and Byline Bank as of September 30, 2022:



Actual

Minimum Capital Required

Required to be Considered Well Capitalized
September 30, 2022

Amount

Ratio

Amount


Ratio

Amount


Ratio
Total capital to risk weighted assets:

















Company

$
873,588

13.02
%

$
536,609


8.00
%

N/A


N/A

Bank


825,499

12.35
%


534,820


8.00
%

$
668,525


10.00
%
Tier 1 capital to risk weighted assets:

















Company

$
731,606

10.91
%

$
402,457


6.00
%

N/A


N/A

Bank

$
758,517

11.35
%


401,115


6.00
%

$
534,820


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

















Company

$
686,606

10.24
%

$
301,842


4.50
%

N/A


N/A

Bank


758,517

11.35
%


300,836


4.50
%

$
434,541


6.50
%
Tier 1 capital to average assets:

















Company

$
731,606

10.30
%

$
284,252


4.00
%

N/A


N/A

Bank


758,517

10.69
%

$
283,789


4.00
%

$
354,736


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 28, 2022 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 518637. A recorded replay can be accessed through November 11, 2022 by dialing (866) 813-9403; passcode: 271643.

A slide presentation relating to our third quarter 2022 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 $7.3 billion in assets and operates more than 30 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.

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, 2021. 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)













September 30,

June 30,

March 31,

December 31,

September 30,
(dollars in thousands)

2022

2022

2022

2021

2021
ASSETS















Cash and due from banks

$
56,546


$
58,844


$
48,015


$
35,247


$
46,900

Interest bearing deposits with other banks


159,744



83,057



105,564



122,684



95,978

Cash and cash equivalents


216,290



141,901



153,579



157,931



142,878

Equity and other securities, at fair value


7,279



7,860



10,677



10,578



10,299

Securities available-for-sale, at fair value


1,181,654



1,273,138



1,369,368



1,454,542



1,427,605

Securities held-to-maturity, at amortized cost


3,877



3,880



3,882



3,885



3,887

Restricted stock, at cost


27,077



30,002



13,977



22,002



15,927

Loans held for sale


33,975



17,284



39,520



64,460



48,372

Loans and leases:















Loans and leases


5,275,471



5,168,071



4,789,068



4,537,128



4,609,228

Allowance for loan and lease losses


(64,655
)


(62,436
)


(59,458
)


(55,012
)


(60,598
)
Net loans and leases


5,210,816



5,105,635



4,729,610



4,482,116



4,548,630

Servicing assets, at fair value


21,127



22,155



24,497



23,744



23,597

Premises and equipment, net


59,049



60,773



62,281



62,548



76,995

Other real estate owned, net


4,402



4,749



2,221



2,112



3,033

Goodwill and other intangible assets, net


160,484



162,094



163,962



165,558



167,296

Bank-owned life insurance


81,592



81,100



80,604



80,039



60,992

Deferred tax assets, net


91,532



78,950



67,335



50,329



45,165

Accrued interest receivable and other assets


178,433



142,196



113,123



116,328



129,775

Total assets

$
7,277,587


$
7,131,717


$
6,834,636


$
6,696,172


$
6,704,451

LIABILITIES AND STOCKHOLDERS’ EQUITY















LIABILITIES















Non-interest-bearing demand deposits

$
2,142,183


$
2,180,927


$
2,281,612


$
2,158,420


$
2,117,749

Interest-bearing deposits


3,470,273



3,207,450



3,248,490



2,996,627



3,040,529

Total deposits


5,612,456



5,388,377



5,530,102



5,155,047



5,158,278

Other borrowings


653,954



748,092



311,450



519,723



539,119

Subordinated notes, net


73,648



73,604



73,560



73,517



73,473

Junior subordinated debentures issued to capital trusts, net


37,232



37,123



37,011



36,906



36,796

Accrued expenses and other liabilities


152,732



119,360



93,842



74,597



72,367

Total liabilities


6,530,022



6,366,556



6,045,965



5,859,790



5,880,033

STOCKHOLDERS’ EQUITY















Preferred stock


—



—



—



10,438



10,438

Common stock


389



388



388



387



386

Additional paid-in capital


597,049



595,938



595,006



593,753



592,192

Retained earnings


326,560



307,278



290,397



271,676



258,077

Treasury stock


(51,535
)


(47,181
)


(40,732
)


(31,570
)


(31,161
)
Accumulated other comprehensive loss, net of tax


(124,898
)


(91,262
)


(56,388
)


(8,302
)


(5,514
)
Total stockholders’ equity


747,565



765,161



788,671



836,382



824,418

Total liabilities and stockholders’ equity

$
7,277,587


$
7,131,717


$
6,834,636


$
6,696,172


$
6,704,451

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







Three Months Ended

Nine Months Ended
(dollars in thousands,

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,
except per share data)

2022

2022

2022

2021

2021

2022

2021
INTEREST AND DIVIDEND INCOME





















Interest and fees on loans and leases

$
72,824


$
59,674


$
55,426


$
58,570


$
56,291


$
187,924


$
164,423

Interest on securities


6,402



6,264



6,155



5,619



5,534



18,821



17,982

Other interest and dividend income


677



608



237



495



947



1,522



1,837

Total interest and dividend income


79,903



66,546



61,818



64,684



62,772



208,267



184,242

INTEREST EXPENSE





















Deposits


5,971



2,128



1,087



1,037



986



9,186



3,465

Other borrowings


3,232



1,097



395



330



349



4,724



1,333

Subordinated notes and debentures


1,825



1,694



1,600



1,589



1,592



5,119



4,785

Total interest expense


11,028



4,919



3,082



2,956



2,927



19,029



9,583

Net interest income


68,875



61,627



58,736



61,728



59,845



189,238



174,659

PROVISION/(RECAPTURE) FOR LOAN AND LEASE LOSSES


4,176



5,908



4,995



(1,293
)


352



15,079



2,750

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


64,699



55,719



53,741



63,021



59,493



174,159



171,909

NON-INTEREST INCOME





















Fees and service charges on deposits


2,128



2,059



1,884



1,955



1,867



6,071



5,299

Loan servicing revenue


3,422



3,384



3,380



3,392



3,344



10,186



9,301

Loan servicing asset revaluation


(2,342
)


(4,636
)


(1,231
)


(2,510
)


(2,650
)


(8,209
)


(4,148
)
ATM and interchange fees


1,007



1,131



1,049



1,219



1,201



3,187



3,257

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


(2
)


52



—



(21
)


130



50



1,456

Change in fair value of equity securities, net


(581
)


(697
)


(35
)


(98
)


(275
)


(1,313
)


36

Net gains on sales of loans


5,580



9,983



10,827



12,924



12,761



26,390



33,350

Wealth management and trust income


995



900



1,048



764



815



2,943



2,305

Other non-interest income


1,785



1,985



2,504



1,389



1,302



6,274



4,383

Total non-interest income


11,992



14,161



19,426



19,014



18,495



45,579



55,239

NON-INTEREST EXPENSE





















Salaries and employee benefits


29,587



27,697



28,959



28,850



25,978



86,243



72,372

Occupancy and equipment expense, net


3,919



4,409



5,128



4,995



4,982



13,456



15,617

Impairment charge on assets held for sale


—



—



—



8,351



1,434



—



3,981

Loan and lease related expenses


530



942



(891
)


2,328



1,175



581



3,629

Legal, audit, and other professional fees


2,733



1,820



2,600



2,376



2,710



7,153



7,822

Data processing


3,370



3,396



3,186



3,070



3,108



9,952



8,710

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


275



158



54



26



42



487



1,052

Other intangible assets amortization expense


1,611



1,868



1,596



1,738



1,738



5,075



5,335

Other non-interest expense


4,153



3,483



3,923



7,234



3,013



11,559



7,485

Total non-interest expense


46,178



43,773



44,555



58,968



44,180



134,506



126,003

INCOME BEFORE PROVISION FOR INCOME TAXES


30,513



26,107



28,612



23,067



33,808



85,232



101,145

PROVISION FOR INCOME TAXES


7,857



5,824



6,301



5,878



8,502



19,982



25,549

NET INCOME


22,656



20,283



22,311



17,189



25,306



65,250



75,596

Dividends on preferred shares


—



—



196



196



196



196



587

INCOME AVAILABLE TO COMMON STOCKHOLDERS

$
22,656


$
20,283


$
22,115


$
16,993


$
25,110


$
65,054


$
75,009

EARNINGS PER COMMON SHARE





















Basic

$
0.61


$
0.55


$
0.60


$
0.46


$
0.68


$
1.76


$
1.99

Diluted

$
0.61


$
0.54


$
0.58


$
0.45


$
0.66


$
1.73


$
1.95

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)
2022

2022

2022

2021

2021

2022

2021





















Earnings per Common Share




















Basic earnings per common share
$
0.61


$
0.55


$
0.60


$
0.46


$
0.68


$
1.76


$
1.99

Diluted earnings per common share
$
0.61


$
0.54


$
0.58


$
0.45


$
0.66


$
1.73


$
1.95

Adjusted diluted earnings per common share ^(1)(2)(3)(4)
$
0.61


$
0.54


$
0.58


$
0.69


$
0.69


$
1.73


$
2.02

Weighted average common shares outstanding (basic)

36,851,973



37,064,795



37,123,161



37,124,176



37,200,778



37,012,316



37,773,350

Weighted average common shares outstanding (diluted)

37,371,159



37,612,268



38,042,822



37,999,401



38,018,301



37,581,866



38,523,112

Common shares outstanding

37,465,902



37,669,102



37,811,582



37,713,903



37,690,087



37,465,902



37,690,087

Cash dividends per common share
$
0.09


$
0.09


$
0.09


$
0.09


$
0.09


$
0.27


$
0.21

Dividend payout ratio on common stock

14.75
%


16.67
%


15.52
%


20.00
%


13.64
%


15.61
%


10.77
%
Tangible book value per common share ⁽¹⁾
$
15.67


$
16.01


$
16.52


$
17.51


$
17.16


$
15.67


$
17.16

Key Ratios and Performance Metrics (annualized where applicable)




















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

4.05
%


3.77
%


3.82
%


3.97
%


3.92
%


3.88
%


3.82
%
Average cost of deposits

0.43
%


0.16
%


0.08
%


0.08
%


0.08
%


0.22
%


0.09
%
Efficiency ratio ⁽²⁾

55.11
%


55.29
%


54.96
%


70.88
%


54.18
%


55.12
%


52.49
%
Adjusted efficiency ratio ^(1)(2)(3)

55.11
%


55.29
%


54.96
%


55.46
%


52.35
%


55.12
%


50.76
%
Non-interest expense to average assets

2.56
%


2.52
%


2.69
%


3.49
%


2.67
%


2.59
%


2.54
%
Adjusted non-interest expense to average assets ⁽¹⁾⁽³⁾

2.56
%


2.52
%


2.69
%


2.76
%


2.58
%


2.59
%


2.46
%
Return on average stockholders' equity

11.59
%


10.42
%


10.87
%


8.13
%


12.19
%


10.96
%


12.42
%
Adjusted return on average stockholders' equity ^(1)(3)(4)

11.59
%


10.42
%


10.87
%


12.42
%


12.69
%


10.96
%


12.90
%
Return on average assets

1.26
%


1.17
%


1.35
%


1.02
%


1.53
%


1.26
%


1.53
%
Adjusted return on average assets ^(1)(3)(4)

1.26
%


1.17
%


1.35
%


1.56
%


1.59
%


1.26
%


1.58
%
Non-interest income to total revenues ⁽¹⁾

14.83
%


18.69
%


24.85
%


23.55
%


23.61
%


19.41
%


24.03
%
Pre-tax pre-provision return on average assets ⁽¹⁾

1.93
%


1.84
%


2.03
%


1.29
%


2.07
%


1.93
%


2.10
%
Adjusted pre-tax pre-provision return on average assets ⁽¹⁾⁽³⁾

1.93
%


1.84
%


2.03
%


2.03
%


2.15
%


1.93
%


2.18
%
Return on average tangible common stockholders' equity ⁽¹⁾

15.40
%


14.06
%


14.36
%


10.94
%


16.22
%


14.60
%


16.66
%
Adjusted return on average tangible common stockholders' equity ⁽¹⁾⁽³⁾

15.40
%


14.06
%


14.36
%


16.38
%


16.86
%


14.60
%


17.27
%
Non-interest-bearing deposits to total deposits

38.17
%


40.47
%


41.26
%


41.87
%


41.06
%


38.17
%


41.06
%
Loans and leases held for sale and loans and lease held for investment to total deposits

94.60
%


96.23
%


87.31
%


89.26
%


90.29
%


94.60
%


90.29
%
Deposits to total liabilities

85.95
%


84.64
%


91.47
%


87.97
%


87.73
%


85.95
%


87.73
%
Deposits per branch
$
147,696


$
141,799


$
125,684


$
117,160


$
117,234


$
147,696


$
117,234

Asset Quality Ratios




















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

0.67
%


0.66
%


0.42
%


0.51
%


0.75
%


0.67
%


0.75
%
ALLL to total loans and leases held for investment, net before ALLL

1.23
%


1.21
%


1.24
%


1.21
%


1.31
%


1.23
%


1.31
%
Net charge-offs to average total loans and leases held for investment, net before ALLL

0.15
%


0.24
%


0.05
%


0.37
%


0.13
%


0.15
%


0.25
%
Acquisition accounting adjustments ⁽⁴⁾
$
2,537


$
3,050


$
3,364


$
4,769


$
6,327


$
2,537


$
6,327

Capital Ratios




















Common equity to total assets

10.27
%


10.73
%


11.54
%


12.33
%


12.14
%


10.27
%


12.14
%
Tangible common equity to tangible assets ⁽¹⁾

8.25
%


8.65
%


9.36
%


10.11
%


9.89
%


8.25
%


9.89
%
Leverage ratio

10.30
%


10.34
%


10.70
%


10.89
%


11.21
%


10.30
%


11.21
%
Common equity tier 1 capital ratio

10.24
%


10.26
%


10.75
%


11.39
%


11.32
%


10.24
%


11.32
%
Tier 1 capital ratio

10.91
%


10.95
%


11.49
%


12.37
%


12.32
%


10.91
%


12.32
%
Total capital ratio

13.02
%


13.09
%


13.72
%


14.70
%


14.78
%


13.02
%


14.78
%

(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.
(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 YEAR-TO-DATE STATEMENT OF AVERAGE INTEREST-EARNING ASSETS AND AVERAGE INTEREST-BEARING LIABILITIES (unaudited)






For the Nine Months Ended September 30,



2022

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

$
72,802

$
313


0.58
%

$
56,926


$
75


0.18
%
Loans and leases ⁽¹⁾


4,967,769


187,924


5.06
%


4,487,909



164,423


4.90
%
Taxable securities


1,323,838


17,393


1.76
%


1,405,390



16,798


1.60
%
Tax-exempt securities ⁽²⁾


166,911


3,338


2.67
%


184,826



3,729


2.70
%
Total interest-earning assets

$
6,531,320

$
208,968


4.28
%

$
6,135,051


$
185,025


4.03
%
Allowance for loan and lease losses


(59,526
)






(64,768
)





All other assets


472,115







552,660






TOTAL ASSETS

$
6,943,909






$
6,622,943






LIABILITIES AND STOCKHOLDERS’ EQUITY















Deposits















Interest checking

$
592,985

$
1,670


0.38
%

$
609,444


$
647


0.14
%
Money market accounts


1,318,725


5,026


0.51
%


1,068,770



940


0.12
%
Savings


662,820


406


0.08
%


603,366



214


0.05
%
Time deposits


658,893


2,084


0.42
%


734,708



1,664


0.30
%
Total interest-bearing deposits


3,233,423


9,186


0.38
%


3,016,288



3,465


0.15
%
Other borrowings


466,194


4,710


1.35
%


572,018



1,333


0.31
%
Federal funds purchased


842


14


2.32
%


—



—


0.00
%
Subordinated notes and debentures


110,648


5,119


6.19
%


110,029



4,785


5.81
%
Total borrowings


577,684


9,843


2.28
%


682,047



6,118


1.20
%
Total interest-bearing liabilities

$
3,811,107

$
19,029


0.67
%

$
3,698,335


$
9,583


0.35
%
Non-interest-bearing demand deposits


2,237,002







2,039,242






Other liabilities


99,951







71,737






Total stockholders’ equity


795,849







813,629






TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$
6,943,909






$
6,622,943






Net interest spread ⁽³⁾






3.61
%







3.68
%
Net interest income, fully taxable equivalent



$
189,939







$
175,442



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






3.88
%







3.82
%
Less: Tax-equivalent adjustment




701


0.01
%





783


0.01
%
Net interest income



$
189,238







$
174,659



Net interest margin ⁽⁴⁾






3.87
%







3.81
%
















Net loan accretion impact on margin



$
4,418


0.09
%




$
5,001


0.11
%

(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, total revenue, 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


September 30,


June 30,


March 31,


December 31,


September 30,


September 30,

September 30,

(dollars in thousands, except per share data)

2022


2022


2022


2021


2021


2022

2021

Net income and earnings per share excluding significant items




















Reported Net Income

$
22,656


$
20,283


$
22,311


$
17,189


$
25,306


$
65,250

$
75,596

Significant items:




















Impairment charges on assets held for sale and ROU asset


—



—



—



12,449



1,434



—


3,981

Tax benefit


—



—



—



(3,377
)


(390
)


—


(1,085
)
Adjusted Net Income

$
22,656


$
20,283


$
22,311


$
26,261


$
26,350


$
65,250

$
78,492

Reported Diluted Earnings per Share

$
0.61


$
0.54


$
0.58


$
0.45


$
0.66


$
1.73

$
1.95

Significant items:




















Impairment charges on assets held for sale and ROU asset


—



—



—



0.33



0.04



—


0.10

Tax benefit


—



—



—



(0.09
)


(0.01
)


—


(0.03
)
Adjusted Diluted Earnings per Share

$
0.61


$
0.54


$
0.58


$
0.69


$
0.69


$
1.73

$
2.02

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,

September 30,


June 30,


March 31,


December 31,


September 30,


September 30,


September 30,

ratios annualized, where applicable)

2022


2022


2022


2021


2021


2022


2021

Adjusted non-interest expense:





















Non-interest expense

$
46,178


$
43,773


$
44,555


$
58,968


$
44,180


$
134,506


$
126,003

Less: Significant items





















Impairment charges on assets held for sale and ROU asset


—



—



—



12,449



1,434



—



3,981

Adjusted non-interest expense

$
46,178


$
43,773


$
44,555


$
46,519


$
42,746


$
134,506


$
122,022

Adjusted non-interest expense excluding amortization of intangible assets:





















Adjusted non-interest expense

$
46,178


$
43,773


$
44,555


$
46,519


$
42,746


$
134,506


$
122,022

Less: Amortization of intangible assets


1,611



1,868



1,596



1,738



1,738



5,075



5,335

Adjusted non-interest expense excluding amortization of intangible assets

$
44,567


$
41,905


$
42,959


$
44,781


$
41,008


$
129,431


$
116,687

Pre-tax pre-provision net income:





















Pre-tax income

$
30,513


$
26,107


$
28,612


$
23,067


$
33,808


$
85,232


$
101,145

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


4,176



5,908



4,995



(1,293
)


352



15,079



2,750

Pre-tax pre-provision net income

$
34,689


$
32,015


$
33,607


$
21,774


$
34,160


$
100,311


$
103,895

Adjusted pre-tax pre-provision net income:





















Pre-tax pre-provision net income

$
34,689


$
32,015


$
33,607


$
21,774


$
34,160


$
100,311


$
103,895

Impairment charges on assets held for sale and ROU asset


—



—



—



12,449



1,434



—



3,981

Adjusted pre-tax pre-provision net income

$
34,689


$
32,015


$
33,607


$
34,223


$
35,594


$
100,311


$
107,876

Tax equivalent net interest income





















Net interest income

$
68,875


$
61,627


$
58,736


$
61,728


$
59,845


$
189,238


$
174,659

Add: Tax-equivalent adjustment


228



237



236



256



264



701



783

Net interest income, fully taxable equivalent

$
69,103


$
61,864


$
58,972


$
61,984


$
60,109


$
189,939


$
175,442

Total revenue:





















Net interest income

$
68,875


$
61,627


$
58,736


$
61,728


$
59,845


$
189,238


$
174,659

Add: Non-interest income


11,992



14,161



19,426



19,014



18,495



45,579



55,239

Total revenue

$
80,867


$
75,788


$
78,162


$
80,742


$
78,340


$
234,817


$
229,898

Tangible common stockholders' equity:





















Total stockholders' equity

$
747,565


$
765,161


$
788,671


$
836,382


$
824,418


$
747,565


$
824,418

Less: Preferred stock


—



—



—



10,438



10,438



—



10,438

Less: Goodwill and other intangibles


160,484



162,094



163,962



165,558



167,296



160,484



167,296

Tangible common stockholders' equity

$
587,081


$
603,067


$
624,709


$
660,386


$
646,684


$
587,081


$
646,684

Tangible assets:





















Total assets

$
7,277,587


$
7,131,717


$
6,834,636


$
6,696,172


$
6,704,451


$
7,277,587


$
6,704,451

Less: Goodwill and other intangibles


160,484



162,094



163,962



165,558



167,296



160,484



167,296

Tangible assets

$
7,117,103


$
6,969,623


$
6,670,674


$
6,530,614


$
6,537,155


$
7,117,103


$
6,537,155

Average tangible common stockholders' equity:





















Average total stockholders' equity

$
775,358


$
780,652


$
832,161


$
838,975


$
823,754


$
795,849


$
813,629

Less: Average preferred stock


—



—



9,974



10,438



10,438



3,288



10,438

Less: Average goodwill and other intangibles


161,292



163,068



164,837



166,396



168,140



163,053



169,934

Average tangible common stockholders' equity

$
614,066


$
617,584


$
657,350


$
662,141


$
645,176


$
629,508


$
633,257

Average tangible assets:





















Average total assets

$
7,145,189


$
6,975,725


$
6,705,986


$
6,699,069


$
6,560,868


$
6,943,909


$
6,622,943

Less: Average goodwill and other intangibles


161,292



163,068



164,837



166,396



168,140



163,053



169,934

Average tangible assets

$
6,983,897


$
6,812,657


$
6,541,149


$
6,532,673


$
6,392,728


$
6,780,856


$
6,453,009

Tangible net income available to common stockholders:





















Net income available to common stockholders

$
22,656


$
20,283


$
22,115


$
16,993


$
25,110


$
65,054


$
75,009

Add: After-tax intangible asset amortization


1,174



1,361



1,163



1,266



1,265



3,698



3,881

Tangible net income available to common stockholders

$
23,830


$
21,644


$
23,278


$
18,259


$
26,375


$
68,752


$
78,890

Adjusted tangible net income available to common stockholders:





















Tangible net income available to common stockholders

$
23,830


$
21,644


$
23,278


$
18,259


$
26,375


$
68,752


$
78,890

Impairment charges on assets held for sale and ROU asset


—



—



—



12,449



1,434



—



3,981

Tax benefit on significant items


—



—



—



(3,377
)


(390
)


—



(1,085
)
Adjusted tangible net income available to common stockholders

$
23,830


$
21,644


$
23,278


$
27,331


$
27,419


$
68,752


$
81,786

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

September 30,


June 30,


March 31,


December 31,


September 30,


September 30,


September 30,

data, ratios annualized, where applicable)

2022


2022


2022


2021


2021


2022


2021

Pre-tax pre-provision return on average assets:





















Pre-tax pre-provision net income

$
34,689


$
32,015


$
33,607


$
21,774


$
34,160


$
100,311


$
103,895

Average total assets


7,145,189



6,975,725



6,705,986



6,699,069



6,560,868



6,943,909



6,622,943

Pre-tax pre-provision return on average assets


1.93
%


1.84
%


2.03
%


1.29
%


2.07
%


1.93
%


2.10
%
Adjusted pre-tax pre-provision return on average assets:





















Adjusted pre-tax pre-provision net income

$
34,689


$
32,015


$
33,607


$
34,223


$
35,594


$
100,311


$
107,876

Average total assets


7,145,189



6,975,725



6,705,986



6,699,069



6,560,868



6,943,909



6,622,943

Adjusted pre-tax pre-provision return on average assets


1.93
%


1.84
%


2.03
%


2.03
%


2.15
%


1.93
%


2.18
%
Net interest margin, fully taxable equivalent





















Net interest income, fully taxable equivalent

$
69,103


$
61,864


$
58,972


$
61,984


$
60,109


$
189,939


$
175,442

Total average interest-earning assets


6,760,623



6,573,878



6,253,889



6,189,762



6,076,065



6,531,320



6,135,051

Net interest margin, fully taxable equivalent


4.05
%


3.77
%


3.82
%


3.97
%


3.92
%


3.88
%


3.82
%
Non-interest income to total revenues:





















Non-interest income

$
11,992


$
14,161


$
19,426


$
19,014


$
18,495


$
45,579


$
55,239

Total revenues


80,867



75,788



78,162



80,742



78,340



234,817



229,898

Non-interest income to total revenues


14.83
%


18.69
%


24.85
%


23.55
%


23.61
%


19.41
%


24.03
%
Adjusted non-interest expense to average assets:





















Adjusted non-interest expense

$
46,178


$
43,773


$
44,555


$
46,519


$
42,746


$
134,506


$
122,022

Average total assets


7,145,189



6,975,725



6,705,986



6,699,069



6,560,868



6,943,909



6,622,943

Adjusted non-interest expense to average assets


2.56
%


2.52
%


2.69
%


2.76
%


2.58
%


2.59
%


2.46
%
Adjusted efficiency ratio:





















Adjusted non-interest expense excluding amortization of intangible assets

$
44,567


$
41,905


$
42,959


$
44,781


$
41,008


$
129,431


$
116,687

Total revenues


80,867



75,788



78,162



80,742



78,340



234,817



229,898

Adjusted efficiency ratio


55.11
%


55.29
%


54.96
%


55.46
%


52.35
%


55.12
%


50.76
%
Adjusted return on average assets:





















Adjusted net income

$
22,656


$
20,283


$
22,311


$
26,261


$
26,350


$
65,250


$
78,492

Average total assets


7,145,189



6,975,725



6,705,986



6,699,069



6,560,868



6,943,909



6,622,943

Adjusted return on average assets


1.26
%


1.17
%


1.35
%


1.56
%


1.59
%


1.26
%


1.58
%
Adjusted return on average stockholders' equity:





















Adjusted net income

$
22,656


$
20,283


$
22,311


$
26,261


$
26,350


$
65,250


$
78,492

Average stockholders' equity


775,358



780,652



832,161



838,975



823,754



795,849



813,629

Adjusted return on average stockholders' equity


11.59
%


10.42
%


10.87
%


12.42
%


12.69
%


10.96
%


12.90
%
Tangible common equity to tangible assets:





















Tangible common equity

$
587,081


$
603,067


$
624,709


$
660,386


$
646,684


$
587,081


$
646,684

Tangible assets


7,117,103



6,969,623



6,670,674



6,530,614



6,537,155



7,117,103



6,537,155

Tangible common equity to tangible assets


8.25
%


8.65
%


9.36
%


10.11
%


9.89
%


8.25
%


9.89
%
Return on average tangible common stockholders' equity:





















Tangible net income available to common stockholders

$
23,830


$
21,644


$
23,278


$
18,259


$
26,375


$
68,752


$
78,890

Average tangible common stockholders' equity


614,066



617,584



657,350



662,141



645,176



629,508



633,257

Return on average tangible common stockholders' equity


15.40
%


14.06
%


14.36
%


10.94
%


16.22
%


14.60
%


16.66
%
Adjusted return on average tangible common stockholders' equity:





















Adjusted tangible net income available to common stockholders

$
23,830


$
21,644


$
23,278


$
27,331


$
27,419


$
68,752


$
81,786

Average tangible common stockholders' equity


614,066



617,584



657,350



662,141



645,176



629,508



633,257

Adjusted return on average tangible common stockholders' equity


15.40
%


14.06
%


14.36
%


16.38
%


16.86
%


14.60
%


17.27
%
Tangible book value per share:





















Tangible common equity

$
587,081


$
603,067


$
624,709


$
660,386


$
646,684


$
587,081


$
646,684

Common shares outstanding


37,465,902



37,669,102



37,811,582



37,713,903



37,690,087



37,465,902



37,690,087

Tangible book value per share

$
15.67


$
16.01


$
16.52


$
17.51


$
17.16


$
15.67


$
17.16

View source version on businesswire.com: https://www.businesswire.com/news/home/20221027006074/en/

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

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

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

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