Chronicle Journal: Finance

Byline Bancorp, Inc. Reports Full Year and Fourth Quarter 2020 Financial Results

Byline Bancorp, Inc. (the “Company” or “Byline”)(NYSE: BY), the parent company of Byline Bank (the “Bank”), today reported net income of $12.3 million, or $0.31 per diluted share, for the fourth quarter of 2020, compared with net income of $13.1 million, or $0.34 per diluted share, for the third quarter of 2020. The Company's financial results for 2020 include impairment charges on assets held for sale. Excluding these charges, adjusted net income1 was $15.2 million, or $0.38 per adjusted diluted share, for the fourth quarter of 2020, compared with $13.1 million, or $0.34 per adjusted diluted share1, for the third quarter of 2020.

Alberto J. Paracchini, President and Chief Executive Officer of Byline, commented, “We continued to see an improvement in business activity during the fourth quarter, resulting in an increase in loan and lease growth excluding runoff of PPP loans, strong inflows of commercial noninterest-bearing deposits, and higher net interest income. Combined with our continued expense discipline, we produced a strong quarter of earnings and pre-tax, pre-provision income. Importantly, asset quality remains strong as we saw a decline in non-performing assets during the quarter, although we remain conservative with respect to our reserves and further increased our allowance to 1.53% of total loans.

“Since the recap in 2013, we have consistently executed well on our strategies to enhance the value of the Byline franchise and we believe we are well positioned to deliver another strong year in 2021. Our loan pipeline continues to build as the banking teams we added over the past two years gain traction and overall loan demand improves. With a more efficient and productive retail branch network following our recent branch consolidations, we believe that we can effectively manage expenses and realize more operating leverage as we continue to grow our balance sheet. We believe that the actions we have taken to enhance efficiencies combined with the investments we have made to improve our ability to serve existing customers and attract new customers to Byline will continue to result in a higher level of earnings and profitability in the years to come. Given our strong financial performance and healthy outlook, we are well positioned to increase the amount of capital that we return to shareholders through our quarterly dividend, doubling to $0.06 per share, along with the resumption on our stock repurchase program as market conditions permit,” said Mr. Paracchini.

On January 28, 2021, the Board approved the appointment of the Company’s Chairman, Roberto R. Herencia, as executive Chairman and Chief Executive Officer of Byline Bancorp, Inc., effective February 12, 2021. Alberto J. Paracchini will continue in his role as President of Byline Bancorp, Inc. Mr. Paracchini will also continue in his role as President and Chief Executive Officer of Byline Bank, reporting directly to Mr. Herencia, and remains a director of Byline Bancorp, Inc. and Byline Bank. Mr. Herencia is a founder of the Company and has been Chairman of the Board since 2013. In his role as non-executive Chairman, he has been closely involved with overseeing management execution of the Company’s long-term strategy.

The changes are intended to accelerate and support the execution of the Company’s strategic plan, specifically its growth strategy, as a leading commercial bank in the Chicago MSA.

"Having Roberto and Alberto work together in this capacity doubles up on their considerable talents and close relationship for the benefit of the Company,” said Antonio Del Valle Perochena, director and chair of the Governance and Nominating Committee of Byline Bancorp and Byline Bank. “I welcome the continued support and close collaboration with Roberto, as we work to accelerate our growth strategy,” said Alberto Paracchini. “Alberto and I have worked together for almost 30 years and I am delighted to continue to do so,” added Herencia.

Board Declares Cash Dividend of $0.06 per Share

On January 26, 2021, the Company’s Board of Directors declared a cash dividend of $0.06 per share, payable on February 23, 2021, to stockholders of record of the Company’s common stock as of February 9, 2021.

Fourth Quarter 2020 Updates

Branch Update

On December 31, 2020, as previously announced, we closed 11 branches. The branch consolidations resulted in one‐time charges of approximately $6.2 million, of which $5.1 million was recorded during the fourth quarter of 2020 related to premises and equipment.

Byline Bank currently operates 46 branch locations: 45 located in the Chicagoland area and one in the Milwaukee area. In response to COVID-19 safety concerns, 22 branches are operating as drive-thru only locations and 24 branches are offering full lobby service.

Paycheck Protection Program (PPP)

As of December 31, 2020, over $366.9 million of PPP loans were in various stages of the SBA forgiveness process, with over $110.1 million approved for forgiveness by the SBA. Byline Bank began accepting applications for the second round of PPP financing on January 11, 2021 and on January 19, 2021, the SBA opened its portal for all participating lenders to submit PPP applications. As of January 26, 2021, we have received over 1,900 applications and approved the funding of $166.1 million.

The following table presents the net PPP loans outstanding as of December 31, 2020:

PPP Loan Size

(dollars in thousands)

$0 - $50,000

$50,001 - $150,000

$150,001 -

$2,000,000

Over $2,000,000

Total

Principal outstanding

$

29,003

$

67,338

$

346,063

$

84,640

$

527,044

Unearned processing fee

(1,009

)

(2,270

)

(8,517

)

(537

)

(12,333

)

Deferred cost

1,519

787

772

26

3,104

PPP loans, net

$

29,513

$

65,855

$

338,318

$

84,129

$

517,815

Number of loans

1,538

820

803

27

3,188

Loan and Lease Deferrals

In support of our customers impacted by the COVID-19 pandemic and keeping with regulatory guidance, we began offering relief through payment deferrals during the first quarter of 2020. Under the CARES Act the SBA was authorized to pay principal and interest on covered 7(a) loans. Beginning in the fourth quarter, this payment subsidy expired for some borrowers, and we began offering payment deferrals on SBA 7(a) loans. Under the Economic Aid Act enacted on December 27, 2020, the SBA will again make payments on covered loans for three months beginning with the first payment due on the loan on or after February 1, 2021. We estimate that approximately 95% of our active government guaranteed deferrals as of December 31, 2020 will receive this subsidy. Certain borrowers in the most impacted industries, including accommodation and food service, will receive three months plus an addition five months of principal and interest payments. We estimate that approximately 60% of our active government guaranteed deferrals as of December 31, 2020 will receive this additional five months of subsidy.

The following table shows active deferrals by category at the dates indicated (dollars in thousands):

Active Deferrals

As of December 31, 2020

As of September 30, 2020

December 31, 2020 Change from
September 30, 2020

Count

Amount

Percentage of
Total Loans
and Leases(2)

Count

Amount

Percentage of
Total Loans
and Leases(2)

Count

Amount

Commercial Banking

21

$

22,905

0.60

%

19

$

23,027

0.61

%

2

$

(122

)

Consumer Loans

2

703

0.02

%

11

1,945

0.05

%

(9

)

$

(1,242

)

Leasing

30

1,528

0.04

%

46

1,829

0.03

%

(16

)

$

(301

)

Government Guaranteed Lending

262

75,444

1.97

%

3

1,141

0.05

%

259

$

74,303

Total

315

$

100,580

2.63

%

79

$

27,942

0.74

%

236

72,638

 

STATEMENTS OF OPERATIONS

Net Interest Income

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

Three Months Ended

December 31, 2020

Percentage Change from

December 31,

September 30,

December 31,

September 30,

December 31,

(dollars in thousands)

2020

2020

2019

2020

2019

INTEREST AND DIVIDEND INCOME

Interest and fees on loans and leases

$

53,441

$

51,036

$

58,203

4.7

%

(8.2

)%

Interest on securities

6,252

7,070

7,212

(11.6

)%

(13.3

)%

Other interest and dividend income

232

128

500

82.4

%

(53.5

)%

Total interest and dividend income

59,925

58,234

65,915

2.9

%

(9.1

)%

INTEREST EXPENSE

Deposits

1,814

2,760

9,325

(34.3

)%

(80.6

)%

Other borrowings

480

465

1,989

3.3

%

(75.9

)%

Subordinated notes and debentures

1,611

1,485

687

8.5

%

134.6

%

Total interest expense

3,905

4,710

12,001

(17.1

)%

(67.5

)%

Net interest income

$

56,020

$

53,524

$

53,914

4.7

%

3.9

%

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 an equivalent before-tax basis using tax rates effective as of the end of the period:

For the Three Months Ended

December 31, 2020

September 30, 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

$

39,500

$

21

0.22

%

$

48,678

$

25

0.20

%

Loans and leases(1)

4,340,388

53,441

4.90

%

4,360,203

51,036

4.66

%

Taxable securities

1,364,980

5,555

1.62

%

1,364,516

6,341

1.85

%

Tax-exempt securities(2)

168,878

1,148

2.71

%

143,157

1,054

2.93

%

Total interest-earning assets

$

5,913,746

$

60,165

4.05

%

$

5,916,554

$

58,456

3.93

%

Allowance for loan and lease losses

(63,891

)

(53,964

)

All other assets

550,766

538,700

TOTAL ASSETS

$

6,400,621

$

6,401,290

LIABILITIES AND STOCKHOLDERS’

EQUITY

Deposits

Interest checking

$

578,520

$

287

0.20

%

$

565,917

$

226

0.16

%

Money market accounts

1,152,012

444

0.15

%

1,202,016

634

0.21

%

Savings

554,633

66

0.05

%

535,396

64

0.05

%

Time deposits

802,409

1,017

0.50

%

870,227

1,836

0.84

%

Total interest-bearing

deposits

3,087,574

1,814

0.23

%

3,173,556

2,760

0.35

%

Other borrowings

577,309

480

0.33

%

538,237

465

0.34

%

Subordinated notes and debentures

109,704

1,611

5.84

%

100,756

1,485

5.86

%

Total borrowings

687,013

2,091

1.21

%

638,993

1,950

1.21

%

Total interest-bearing liabilities

$

3,774,587

$

3,905

0.41

%

$

3,812,549

$

4,710

0.49

%

Non-interest-bearing demand deposits

1,761,902

1,742,787

Other liabilities

58,539

54,843

Total stockholders’ equity

805,593

791,111

TOTAL LIABILITIES AND

STOCKHOLDERS’ EQUITY

$

6,400,621

$

6,401,290

Net interest spread(3)

3.64

%

3.44

%

Net interest income, fully taxable equivalent

$

56,260

$

53,746

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

3.78

%

3.61

%

Tax-equivalent adjustment

(240

)

0.01

%

(222

)

0.01

%

Net interest income

$

56,020

$

53,524

Net interest margin(4)

3.77

%

3.60

%

Net loan accretion impact on margin

$

2,304

0.16

%

$

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.

Net interest income for the fourth quarter of 2020 was $56.0 million, an increase of $2.5 million, or 4.7%, from the third quarter of 2020.

The increase in net interest income was primarily due to:

  • An increase of $2.4 million in interest income on loans and leases, due to the recognition of net fee income related to PPP loan forgiveness; and
  • A decrease of $946,000 in interest expense on deposits, due to maturities of higher-rate time deposits and lower rates paid on money market accounts;

Partially offset by:

  • A decrease of $818,000 in interest income on securities, due to elevated prepayment speeds and runoff of higher yielding securities resulting in lower yields.

Tax-equivalent net interest margin for the fourth quarter of 2020 was 3.78%, an increase of 17 basis points compared to 3.61% for the third quarter of 2020. Total net accretion income on acquired loans contributed 16 basis points to the net interest margin for the fourth quarter of 2020 compared to 26 basis points for the third quarter of 2020, a decrease of 10 basis points. PPP interest and net fees combined were $5.5 million, for the fourth quarter 2020 compared to $3.5 million for the third quarter 2020.

The average cost of total deposits was 0.15% for the fourth quarter of 2020, a decrease of seven basis points compared to the third quarter of 2020, mainly due to a lower average cost of time deposits and money market accounts, as well as a favorable change in deposit mix. Average non-interest-bearing demand deposits increased $19.1 million, while average time deposits decreased by $67.8 million. Average non-interest-bearing demand deposits were 36.3% of average total deposits for the fourth quarter of 2020 compared to 35.4% the third quarter of 2020.

Provision for Loan and Lease Losses

The provision for loan and lease losses was $10.2 million for the fourth quarter of 2020, a decrease of $5.5 million compared to $15.7 million for the third quarter of 2020. The fourth quarter included allocations of $5.4 million for originated loans and leases, $1.4 million for acquired impaired loans, and $3.4 million for acquired non-impaired loans. The provision during the fourth quarter of 2020 included net specific impairments of $5.0 million primarily driven by the unguaranteed portion of government guaranteed loans.

Non-interest Income

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

Three Months Ended

December 31, 2020

Change from

December 31,

September 30,

December 31,

September 30,

December 31,

(dollars in thousands)

2020

2020

2019

2020

2019

NON-INTEREST INCOME

Fees and service charges on deposits

$

1,740

$

1,603

$

1,635

8.5

%

6.3

%

Loan servicing revenue

2,645

2,936

2,834

(9.9

)%

(6.7

)%

Loan servicing asset revaluation

(2,298

)

1,122

(2,545

)

(304.7

)%

(9.7

)%

ATM and interchange fees

1,076

1,028

1,150

4.7

%

(6.4

)%

Net gains on sales of securities available-for-sale

2,889

1,037

178.7

%

100.0

%

Change in fair value of equity securities, net

428

154

381

178.2

%

12.4

%

Net gains on sales of loans

9,449

12,671

8,735

(25.4

)%

8.2

%

Wealth management and trust income

710

693

704

2.5

%

0.9

%

Other non-interest income

1,051

990

1,648

6.2

%

(36.1

)%

Total non-interest income

$

17,690

$

22,234

$

14,542

(20.4

)%

21.6

%

Non-interest income for the fourth quarter of 2020 was $17.7 million, a decrease of $4.5 million, or 20.4%, compared to $22.2 million for the third quarter of 2020.

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

  • A decrease of $3.2 million in net gains on sales of loans, mainly due to a decrease in volume of sales of government guaranteed loans and lower premiums received on loans sold;
  • A loan servicing asset revaluation charge of $2.3 million compared to an upward adjustment of $1.1 million in the prior quarter; and

Partially offset by:

  • An increase of $1.9 million in net gains on sales of securities available-for-sale resulting from increased volume of sales.

During the fourth quarter of 2020, we sold $108.1 million of U.S. government guaranteed loans compared to $121.2 million during the third quarter of 2020. The decrease in sales was driven by lower inventory of U.S. government guaranteed loans.

Non-interest Expense

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

Three Months Ended

December 31, 2020

Change from

December 31,

September 30,

December 31,

September 30,

December 31,

(dollars in thousands)

2020

2020

2019

2020

2019

NON-INTEREST EXPENSE

Salaries and employee benefits

$

22,559

$

23,126

$

24,228

(2.5

)%

(6.9

)%

Occupancy and equipment expense, net

6,854

5,220

5,241

31.3

%

30.8

%

Loan and lease related expenses

1,324

2,053

2,648

(35.5

)%

(50.2

)%

Legal, audit and other professional fees

1,336

2,390

2,340

(44.1

)%

(42.9

)%

Data processing

2,748

2,661

2,678

3.3

%

2.6

%

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

495

349

122

42.1

%

306.4

%

Other intangible assets amortization expense

1,892

1,947

2,002

(2.8

)%

(5.5

)%

Other non-interest expense

9,813

3,941

4,461

148.9

%

120.5

%

Total non-interest expense

$

47,021

$

41,687

$

43,720

12.8

%

7.5

%

Non-interest expense for the fourth quarter of 2020 was $47.0 million, an increase of $5.3 million, or 12.8%, from $41.7 million for the third quarter of 2020.

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

  • An increase of $5.9 million in other non-interest expense, mainly due to $4.0 million for impairment charges on assets held for sale and $2.8 million for branch consolidations; and
  • An increase of $1.6 million in occupancy and equipment expense, net, which includes $1.4 million of lease obligations related to branch consolidations;

Partially offset by:

  • A decrease of $1.1 million in legal, audit and other professional fees due to decreased legal expenses; and
  • A decrease of $729,000 in loan and lease related expenses due to decreases in the volume of, and broker fees on, U.S. Government guaranteed loan originations.

Our efficiency ratio was 61.22% for the fourth quarter of 2020 compared to 52.46% for the third quarter of 2020. Excluding impairment charges on assets held for sale, the Company's adjusted efficiency ratio1 was 55.77% for the fourth quarter of 2020, compared with 52.42% for the third quarter of 2020.

INCOME TAXES

We recorded income tax expense of $4.2 million during the fourth quarter of 2020, an effective tax rate of 25.3%, reflecting a benefit from tax exempt income, compared to $5.3 million during the third quarter of 2020, an effective tax rate of 28.7%.

STATEMENTS OF FINANCIAL CONDITION

Total assets were $6.4 billion at December 31, 2020, a decrease of $105.9 million compared to $6.5 billion at September 30, 2020.

The current quarter decrease was primarily due to:

  • A decrease in securities of $61.6 million, principally a result of sales of mortgage backed securities during the quarter;
  • A decrease in loans held for sale of $41.1 million, due to the timing of government guaranteed loans sold during the previous quarter; and
  • A decrease in loans and leases of $34.0 million, due to $104.4 million decrease in the PPP portfolio offset by increases to new originations;
    • Loans and leases excluding PPP increased $70.4 million during the quarter;

Partially offset by:

  • An increase in other assets of $59.2 million due to the timing of settlement of government guaranteed loans and securities sold during the quarter and not yet settled.

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

December 31, 2020

September 30, 2020

December 31, 2019

(dollars in thousands)

Amount

% of Total

Amount

% of Total

Amount

% of Total

Originated loans and leases

Commercial real estate

$

1,017,587

23.5

%

$

919,862

21.0

%

$

792,263

20.9

%

Residential real estate

414,220

9.6

%

458,364

10.5

%

483,072

12.8

%

Construction, land development, and

other land

226,408

5.2

%

234,017

5.3

%

235,794

6.2

%

Commercial and industrial

1,276,527

29.4

%

1,214,099

27.8

%

1,160,996

30.7

%

Paycheck protection program

517,815

11.9

%

622,191

14.2

%

0.0

%

Installment and other

1,267

0.0

%

2,346

0.1

%

5,372

0.1

%

Leasing financing receivables

214,636

4.9

%

185,700

4.2

%

158,155

4.2

%

Total originated loans and leases

$

3,668,460

84.5

%

$

3,636,579

83.1

%

$

2,835,652

74.9

%

Acquired impaired loans

Commercial real estate

$

108,484

2.5

%

$

117,114

2.7

%

$

135,914

3.6

%

Residential real estate

78,840

1.9

%

84,197

1.9

%

100,223

2.6

%

Construction, land development, and

other land

4,113

0.1

%

4,804

0.1

%

5,373

0.1

%

Commercial and industrial

10,178

0.2

%

10,489

0.3

%

16,909

0.4

%

Installment and other

202

0.0

%

214

0.0

%

249

0.1

%

Total acquired impaired loans

$

201,817

4.7

%

$

216,818

5.0

%

$

258,668

6.8

%

Acquired non-impaired loans and leases

Commercial real estate

$

295,599

6.8

%

$

310,879

7.1

%

$

348,365

9.2

%

Residential real estate

79,211

1.8

%

90,835

2.1

%

128,527

3.4

%

Construction, land development, and

other land

212

0.0

%

213

0.0

%

37,490

1.0

%

Commercial and industrial

82,195

1.9

%

104,221

2.4

%

153,660

4.1

%

Installment and other

536

0.0

%

583

0.0

%

944

0.0

%

Leasing financing receivables

12,505

0.3

%

14,389

0.3

%

22,355

0.6

%

Total acquired non-impaired loans

and leases

$

470,258

10.8

%

$

521,120

11.9

%

$

691,341

18.3

%

Total loans and leases

$

4,340,535

100.0

%

$

4,374,517

100.0

%

$

3,785,661

100.0

%

Allowance for loan and lease losses

(66,347

)

(61,258

)

(31,936

)

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

$

4,274,188

$

4,313,259

$

3,753,725

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:

December 31, 2020

Change from

(dollars in thousands)

December 31,
2020

September 30,
2020

December 31,
2019

September 30,
2020

December 31,
2019

Non-performing assets:

Non-accrual loans and leases

$

41,103

$

43,196

$

36,272

(4.8

)%

13.3

%

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

%

%

Total non-performing loans and leases

$

41,103

$

43,196

$

36,272

(4.8

)%

13.3

%

Other real estate owned

6,350

8,150

9,896

(22.1

)%

(35.8

)%

Total non-performing assets

$

47,453

$

51,346

$

46,168

(7.6

)%

2.8

%

Accruing troubled debt restructured loans (1)

$

2,495

$

2,293

$

1,771

8.8

%

40.9

%

Total non-performing loans and leases as a

percentage of total loans and leases

0.95

%

0.99

%

0.96

%

Total non-performing assets as a percentage of total assets

0.74

%

0.79

%

0.84

%

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

161.42

%

141.81

%

88.05

%

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

Non-accrual loans guaranteed

$

3,645

$

3,749

$

4,232

(2.8

)%

(13.9

)%

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

%

%

Total non-performing loans guaranteed

$

3,645

$

3,749

$

4,232

(2.8

)%

(13.9

)%

Accruing troubled debt restructured loans guaranteed (1)

$

$

$

%

%

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

0.86

%

0.90

%

0.85

%

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

0.69

%

0.73

%

0.76

%

(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 $41.1 million at December 31, 2020, a decrease of $2.1 million from $43.2 million at September 30, 2020; and
  • Other real estate owned was $6.4 million at December 31, 2020, a decrease of $1.8 million from $8.2 million at September 30, 2020 mainly due to sales.

U.S. government guaranteed balances of non-performing loans were $3.6 million at December 31, 2020 and $3.7 million at September 30, 2020.

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

December 31,

September 30,

December 31,

(dollars in thousands)

2020

2020

2019

Allowance for loan and lease losses, beginning of period

$

61,258

$

51,300

$

31,585

Provision for loan and lease losses

10,236

15,740

4,387

Net charge-offs of loans and leases

(5,147

)

(5,782

)

(4,036

)

Allowance for loan and lease losses, end of period

$

66,347

$

61,258

$

31,936

Allowance for loan and lease losses to period end

total loans and leases held for investment

1.53

%

1.40

%

0.84

%

Net charge-offs (annualized) to average loans

and leases outstanding during the period

0.47

%

0.53

%

0.42

%

Provision for loan and lease losses to net charge-offs

during the period

1.99

x

2.72

x

1.09

x

The allowance for loan and lease losses as a percentage of total loans and leases held for investment increased to 1.53% at December 31, 2020 compared to 1.40% at September 30, 2020. The allowance for loan and lease losses as a percentage of total loans and leases held for investment excluding PPP loans increased to 1.74% at December 31, 2020 from 1.63% at September 30, 2020.

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 standard is effective for fiscal years beginning after December 15, 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 fourth quarter of 2020 were $5.1 million, or 0.47% of average loans and leases, on an annualized basis, a decrease of $635,000 compared to $5.8 million, or 0.53% of average loans and leases, during the third quarter of 2020.

Net charge-offs for the fourth quarter of 2020 included $5.0 million in the unguaranteed portion of U.S. government guaranteed loans, while net charge-offs for the third quarter of 2020 included $4.1 million 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:

December 31, 2020

Percentage Change from

(dollars in thousands)

December 31,
2020

September 30,
2020

December 31,
2019

September 30,
2020

December 31,
2019

Non-interest-bearing demand deposits

$

1,762,676

$

1,718,682

$

1,279,641

2.6

%

37.7

%

Interest-bearing checking accounts

494,424

584,682

338,185

(15.4

)%

46.2

%

Money market demand accounts

1,142,709

1,153,433

881,387

(0.9

)%

29.6

%

Other savings

564,700

542,741

475,839

4.0

%

18.7

%

Time deposits (below $250,000)

600,810

622,328

916,723

(3.5

)%

(34.5

)%

Time deposits ($250,000 and above)

186,712

188,379

255,802

(0.9

)%

(27.0

)%

Total deposits

$

4,752,031

$

4,810,245

$

4,147,577

(1.2

)%

14.6

%

Total deposits were $4.8 billion at December 31, 2020, a decrease of $58.2 million, or 1.2%, compared to September 30, 2020. Non-interest-bearing deposits were 37.1% and 35.7% of total deposits at December 31, 2020 and September 30, 2020, respectively.

The decrease in the current quarter was primarily due to:

  • A decrease in interest-bearing checking accounts of $90.3 million, mostly due to seasonal decreases in public funds; and
  • A decrease in time deposits of $23.2 million, principally driven by decreases in personal certificates;

Partially offset by:

  • An increase in non-interest-bearing deposits of $44.0 million, mostly due to increases in business deposits.

Total borrowings and other liabilities were $833.2 million at December 31, 2020, a decrease of $58.4 million from $891.6 million at September 30, 2020, primarily driven by a $77.7 million decrease in the Paycheck Protection Program Liquidity Facility resulting from forgiveness of loans.

Stockholders’ Equity

Total stockholders’ equity was $805.5 million at December 31, 2020, an increase of $10.8 million from $794.7 million at September 30, 2020. The increase was primarily due to net income generated during the quarter less dividends declared.

The following table presents the actual regulatory capital dollar amounts and ratios of the Company and Byline Bank as of December 31, 2020:

Actual

Minimum Capital

Required

Required to be

Considered

Well Capitalized

December 31, 2020

Amount

Ratio

Amount

Ratio

Amount

Ratio

Total capital to risk weighted assets:

Company

$

774,522

16.18

%

$

383,069

8.00

%

N/A

N/A

Bank

675,977

14.16

%

381,775

8.00

%

$

477,219

10.00

%

Tier 1 capital to risk weighted assets:

Company

$

639,564

13.36

%

$

287,302

6.00

%

N/A

N/A

Bank

616,219

12.91

%

286,331

6.00

%

$

381,775

8.00

%

Common Equity Tier 1 (CET1) to

risk weighted assets:

Company

$

584,126

12.20

%

$

215,476

4.50

%

N/A

N/A

Bank

616,219

12.91

%

214,748

4.50

%

$

310,192

6.50

%

Tier 1 capital to average assets:

Company

$

639,564

11.12

%

$

230,056

4.00

%

N/A

N/A

Bank

616,219

10.72

%

229,870

4.00

%

$

287,337

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.

On December 10, 2020, the Company announced that its Board of Directors approved a new stock repurchase program authorizing the purchase of up to an aggregate of 1,250,000 shares of the Company’s outstanding common stock over a two year period ending December 31, 2022.

Conference Call, Webcast and Slide Presentation

We will host a conference call and webcast at 9:00 a.m. Central Time on Friday, January 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 (877) 512-8755. A recorded replay can be accessed through February 12, 2021 by dialing (877) 344-7529; passcode: 10151039.

A slide presentation relating to the fourth quarter 2020 results will be accessible prior to the scheduled conference call. The slide presentation and webcast of the conference call can be accessed on the Company’s 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 $6.4 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.

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 “Reconciliation of Non-GAAP Financial Measures” 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.

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. Continued deterioration in general business and economic conditions, including further 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, 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 its Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission, including among other things under the heading “Risk Factors” in its Annual Report on Form 10-K for the year ended December 31, 2019, and its Quarterly Report on Form 10-Q for the quarters ended March 31, 2020 and June 30, 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)

December 31,

September 30,

June 30,

March 31,

December 31,

(dollars in thousands)

2020

2020

2020

2020

2019

ASSETS

Cash and due from banks

$

41,432

$

47,433

$

51,818

$

45,233

$

48,228

Interest bearing deposits with other banks

41,988

53,645

88,113

74,386

32,509

Cash and cash equivalents

83,420

101,078

139,931

119,619

80,737

Equity and other securities, at fair value

8,764

8,335

8,181

7,413

8,031

Securities available-for-sale, at fair value

1,447,230

1,509,211

1,426,871

1,299,483

1,186,292

Securities held-to-maturity, at amortized cost

4,395

4,400

4,404

4,408

4,412

Restricted stock, at cost

10,507

9,652

6,232

24,197

22,127

Loans held for sale

7,924

49,049

3,031

13,299

11,732

Loans and leases:

Loans and leases

4,340,535

4,374,517

4,391,122

3,860,259

3,785,661

Allowance for loan and lease losses

(66,347

)

(61,258

)

(51,300

)

(41,840

)

(31,936

)

Net loans and leases

4,274,188

4,313,259

4,339,822

3,818,419

3,753,725

Servicing assets, at fair value

22,042

21,267

18,351

17,800

19,471

Premises and equipment, net

86,728

94,638

95,546

96,446

96,140

Other real estate owned, net

6,350

8,150

8,652

9,273

9,896

Goodwill and other intangible assets, net

172,631

174,523

176,470

178,362

180,255

Bank-owned life insurance

10,009

9,952

9,896

9,898

9,750

Deferred tax assets, net

40,181

35,945

37,082

33,845

38,315

Accrued interest receivable and other assets

216,283

157,054

119,049

102,292

100,926

Total assets

$

6,390,652

$

6,496,513

$

6,393,518

$

5,734,754

$

5,521,809

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES

Non-interest-bearing demand deposits

$

1,762,676

$

1,718,682

$

1,768,675

$

1,290,896

$

1,279,641

Interest-bearing deposits

2,989,355

3,091,563

3,189,670

2,947,940

2,867,936

Total deposits

4,752,031

4,810,245

4,958,345

4,238,836

4,147,577

Other borrowings

647,901

710,560

510,414

640,647

539,638

Subordinated notes, net

73,342

73,299

48,777

Junior subordinated debentures issued to

capital trusts, net

36,451

36,331

36,206

37,462

37,334

Accrued expenses and other liabilities

75,463

71,382

58,841

55,142

47,145

Total liabilities

5,585,188

5,701,817

5,612,583

4,972,087

4,771,694

STOCKHOLDERS’ EQUITY

Preferred stock

10,438

10,438

10,438

10,438

10,438

Common stock

384

383

381

380

379

Additional paid-in capital

587,165

586,057

583,307

582,517

580,965

Retained earnings

191,098

180,162

168,444

160,652

159,033

Treasury stock

(1,668

)

(1,668

)

(1,668

)

(1,668

)

Accumulated other comprehensive income

(loss), net of tax

18,047

19,324

20,033

10,348

(700

)

Total stockholders’ equity

805,464

794,696

780,935

762,667

750,115

Total liabilities and stockholders’

equity

$

6,390,652

$

6,496,513

$

6,393,518

$

5,734,754

$

5,521,809

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

Three Months Ended

Year Ended

(dollars in thousands, except per share data)

December 31,
2020

September 30,
2020

June 30,
2020

March 31,
2020

December 31,
2019

December 31,
2020

December 31,
2019

INTEREST AND DIVIDEND INCOME

Interest and fees on loans and leases

$

53,441

$

51,036

$

50,153

$

54,158

$

58,203

$

208,788

$

235,501

Interest on securities

6,252

7,070

7,530

8,016

7,212

28,868

27,019

Other interest and dividend income

232

128

222

992

500

1,574

2,294

Total interest and dividend income

59,925

58,234

57,905

63,166

65,915

239,230

264,814

INTEREST EXPENSE

Deposits

1,814

2,760

4,246

7,804

9,325

16,624

36,325

Other borrowings

480

465

476

1,897

1,989

3,318

9,255

Subordinated notes and debentures

1,611

1,485

574

640

687

4,310

2,949

Total interest expense

3,905

4,710

5,296

10,341

12,001

24,252

48,529

Net interest income

56,020

53,524

52,609

52,825

53,914

214,978

216,285

PROVISION FOR LOAN AND LEASE LOSSES

10,236

15,740

15,518

14,455

4,387

55,949

20,708

Net interest income after provision

for loan and lease losses

45,784

37,784

37,091

38,370

49,527

159,029

195,577

NON-INTEREST INCOME

Fees and service charges on deposits

1,740

1,603

1,455

1,673

1,635

6,471

6,458

Loan servicing revenue

2,645

2,936

2,980

2,758

2,834

11,319

10,695

Loan servicing asset revaluation

(2,298

)

1,122

(711

)

(3,064

)

(2,545

)

(4,951

)

(6,639

)

ATM and interchange fees

1,076

1,028

845

1,216

1,150

4,165

3,785

Net gains on sales of securities

available-for-sale

2,889

1,037

1,375

5,301

1,151

Change in fair value of equity securities,

net

428

154

766

(619

)

381

729

1,416

Net gains on sales of loans

9,449

12,671

6,456

4,773

8,735

33,349

31,845

Wealth management and trust income

710

693

608

669

704

2,680

2,578

Other non-interest income

1,051

990

430

526

1,648

2,997

4,259

Total non-interest income

17,690

22,234

12,829

9,307

14,542

62,060

55,548

NON-INTEREST EXPENSE

Salaries and employee benefits

22,559

23,126

19,405

24,666

24,228

89,756

95,309

Occupancy and equipment expense, net

6,854

5,220

5,359

5,524

5,241

22,957

19,771

Loan and lease related expenses

1,324

2,053

1,260

1,318

2,648

5,955

8,015

Legal, audit, and other professional fees

1,336

2,390

2,078

2,334

2,340

8,138

11,453

Data processing

2,748

2,661

2,826

2,665

2,678

10,900

13,733

Net loss recognized on other real

estate owned and other related

expenses

495

349

456

519

122

1,819

665

Other intangible assets amortization

expense

1,892

1,947

1,892

1,893

2,002

7,624

7,737

Other non-interest expense

9,813

3,941

3,777

4,742

4,461

22,273

17,147

Total non-interest expense

47,021

41,687

37,053

43,661

43,720

169,422

173,830

INCOME BEFORE PROVISION FOR INCOME

TAXES

16,453

18,331

12,867

4,016

20,349

51,667

77,295

PROVISION FOR INCOME TAXES

4,162

5,260

3,728

1,050

4,497

14,200

20,293

NET INCOME

12,291

13,071

9,139

2,966

15,852

37,467

57,002

Dividends on preferred shares

196

196

195

196

196

783

783

INCOME AVAILABLE TO COMMON

STOCKHOLDERS

$

12,095

$

12,875

$

8,944

$

2,770

$

15,656

$

36,684

$

56,219

EARNINGS PER COMMON SHARE

Basic

$

0.32

$

0.34

$

0.24

$

0.07

$

0.41

$

0.96

$

1.51

Diluted

$

0.31

$

0.34

$

0.24

$

0.07

$

0.41

$

0.96

$

1.48

BYLINE BANCORP, INC. AND SUBSIDIARIES

SELECTED FINANCIAL DATA (unaudited)

As of or For the Three Months Ended

As of or For the Year Ended

(dollars in thousands, except share and per share data)

December 31,
2020

September 30,
2020

June 30,
2020

March 31,
2020

December 31,
2019

December 31,
2020

December 31,
2019

Common Share Data

Basic earnings per common share

$

0.32

$

0.34

$

0.24

$

0.07

$

0.41

$

0.96

$

1.51

Diluted earnings per common share

$

0.31

$

0.34

$

0.24

$

0.07

$

0.41

$

0.96

$

1.48

Adjusted diluted earnings per common share(2)(3)(4)

$

0.38

$

0.34

$

0.24

$

0.09

$

0.42

$

1.05

$

1.62

Weighted average common shares

outstanding (basic)

38,202,665

38,057,350

37,919,480

37,943,333

37,872,835

38,031,250

37,290,486

Weighted average common shares

outstanding (diluted)

38,574,129

38,249,335

38,027,289

38,663,658

38,537,899

38,312,608

37,986,463

Common shares outstanding

38,618,054

38,568,916

38,383,217

38,383,021

38,256,500

38,618,054

38,256,500

Cash dividends per common share

$

0.03

$

0.03

$

0.03

$

0.03

$

0.03

$

0.12

$

0.03

Dividend payout ratio on common stock

9.38

%

8.82

%

12.50

%

42.86

%

7.32

%

12.50

%

2.03

%

Tangible book value per common share(1)

$

16.12

$

15.81

$

15.47

$

14.95

$

14.62

$

16.12

$

14.62

Key Ratios and Performance Metrics

(annualized where applicable)

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

3.78

%

3.61

%

3.72

%

4.18

%

4.33

%

3.81

%

4.48

%

Average cost of deposits

0.15

%

0.22

%

0.36

%

0.75

%

0.88

%

0.35

%

0.91

%

Efficiency ratio(2)

61.22

%

52.46

%

53.73

%

67.23

%

60.94

%

58.40

%

61.10

%

Adjusted efficiency ratio(1)(2)(3)

55.77

%

52.42

%

53.73

%

66.08

%

60.52

%

56.68

%

58.84

%

Non-interest expense to average assets

2.92

%

2.59

%

2.41

%

3.15

%

3.20

%

2.76

%

3.29

%

Adjusted non-interest expense to

average assets(1)(3)

2.67

%

2.59

%

2.41

%

3.10

%

3.18

%

2.68

%

3.16

%

Return on average stockholders' equity

6.07

%

6.57

%

4.74

%

1.56

%

8.43

%

4.78

%

8.05

%

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

7.50

%

6.58

%

4.74

%

1.83

%

8.54

%

5.21

%

8.77

%

Return on average assets

0.76

%

0.81

%

0.59

%

0.21

%

1.16

%

0.61

%

1.05

%

Adjusted return on average assets(1)(3)(4)

0.94

%

0.81

%

0.59

%

0.25

%

1.17

%

0.67

%

1.18

%

Non-interest income to total revenues(1)

24.00

%

29.35

%

19.61

%

14.98

%

21.24

%

22.40

%

20.43

%

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

1.66

%

2.12

%

1.85

%

1.33

%

1.81

%

1.75

%

1.86

%

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

1.91

%

2.12

%

1.85

%

1.39

%

1.83

%

1.83

%

1.99

%

Return on average tangible common

stockholders' equity(1)

8.61

%

9.39

%

7.05

%

2.89

%

12.20

%

7.06

%

11.80

%

Adjusted return on average tangible

common stockholders' equity(1)(3)

10.47

%

9.40

%

7.05

%

3.25

%

12.35

%

7.63

%

12.78

%

Non-interest-bearing deposits to total

deposits

37.09

%

35.73

%

35.67

%

30.45

%

30.85

%

37.09

%

30.85

%

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

91.51

%

91.96

%

88.62

%

91.38

%

91.56

%

91.51

%

91.56

%

Deposits to total liabilities

85.08

%

84.36

%

88.34

%

85.25

%

86.92

%

85.08

%

86.92

%

Deposits per branch

$

103,305

$

84,390

$

86,989

$

74,366

$

67,993

$

103,305

$

67,993

Asset Quality Ratios

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

0.95

%

0.99

%

0.92

%

1.27

%

0.96

%

0.95

%

0.96

%

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

1.53

%

1.40

%

1.17

%

1.08

%

0.84

%

1.53

%

0.84

%

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

0.47

%

0.53

%

0.57

%

0.48

%

0.42

%

0.51

%

0.37

%

Acquisition accounting adjustments(4)

$

13,389

$

17,133

$

19,324

$

25,889

$

28,511

$

13,389

$

28,511

Capital Ratios

Common equity to total assets

12.44

%

12.07

%

12.05

%

13.12

%

13.40

%

12.44

%

13.40

%

Tangible common equity to tangible

assets(1)

10.01

%

9.64

%

9.55

%

10.33

%

10.47

%

10.01

%

10.47

%

Leverage ratio

11.12

%

10.93

%

10.29

%

11.18

%

11.39

%

11.12

%

11.39

%

Common equity tier 1 capital ratio

12.20

%

12.55

%

12.33

%

12.24

%

12.36

%

12.20

%

12.36

%

Tier 1 capital ratio

13.36

%

13.77

%

13.56

%

13.52

%

13.67

%

13.36

%

13.67

%

Total capital ratio

16.18

%

16.67

%

15.86

%

14.50

%

14.43

%

16.18

%

14.43

%

(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 December 31,

2020

2019

(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

$

39,500

$

21

0.22

%

$

38,624

$

220

2.25

%

Loans and leases(1)

4,340,388

53,441

4.90

%

3,807,731

58,203

6.06

%

Taxable securities

1,364,980

5,555

1.62

%

1,025,975

6,963

2.69

%

Tax-exempt securities(2)

168,878

1,148

2.71

%

84,640

669

3.14

%

Total interest-earning assets

$

5,913,746

$

60,165

4.05

%

$

4,956,970

$

66,055

5.29

%

Allowance for loan and lease losses

(63,891

)

(32,688

)

All other assets

550,766

502,764

TOTAL ASSETS

$

6,400,621

$

5,427,046

LIABILITIES AND STOCKHOLDERS’

EQUITY

Deposits

Interest checking

$

578,520

$

287

0.20

%

$

399,065

$

612

0.61

%

Money market accounts

1,152,012

444

0.15

%

790,565

1,945

0.98

%

Savings

554,633

66

0.05

%

474,394

63

0.05

%

Time deposits

802,409

1,017

0.50

%

1,231,641

6,705

2.16

%

Total interest-bearing

deposits

3,087,574

1,814

0.23

%

2,895,665

9,325

1.28

%

Other borrowings

577,309

480

0.33

%

414,515

1,989

1.90

%

Subordinated notes and debentures

109,704

1,611

5.84

%

37,254

687

7.32

%

Total borrowings

687,013

2,091

1.21

%

451,769

2,676

2.35

%

Total interest-bearing liabilities

$

3,774,587

$

3,905

0.41

%

$

3,347,434

$

12,001

1.42

%

Non-interest-bearing demand deposits

1,761,902

1,288,960

Other liabilities

58,539

44,907

Total stockholders’ equity

805,593

745,745

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

6,400,621

$

5,427,046

Net interest spread(3)

3.64

%

3.87

%

Net interest income, fully taxable equivalent

$

56,260

$

54,054

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

3.78

%

4.33

%

Tax-equivalent adjustment

(240

)

0.01

%

(140

)

0.01

%

Net interest income

$

56,020

$

53,914

Net interest margin(4)

3.77

%

4.32

%

Net loan accretion impact on margin

$

2,304

0.16

%

$

5,418

0.43

%

(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 Year Ended December 31,

2020

2019

(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

$

46,508

$

228

0.49

%

$

43,636

$

1,018

2.33

%

Loans and leases(1)

4,196,708

208,788

4.98

%

3,741,607

235,501

6.29

%

Taxable securities

1,287,480

27,233

2.12

%

981,453

26,509

2.70

%

Tax-exempt securities(2)

128,664

3,773

2.93

%

71,173

2,260

3.18

%

Total interest-earning assets

$

5,659,360

$

240,022

4.24

%

$

4,837,869

$

265,288

5.48

%

Allowance for loan and lease losses

(48,688

)

(29,650

)

All other assets

529,471

468,823

TOTAL ASSETS

$

6,140,143

$

5,277,042

LIABILITIES AND STOCKHOLDERS’

EQUITY

Deposits

Interest checking

$

469,418

$

938

0.20

%

$

346,329

$

2,002

0.58

%

Money market accounts

1,132,978

4,238

0.37

%

709,379

7,111

1.00

%

Savings

520,472

252

0.05

%

474,709

434

0.09

%

Time deposits

940,165

11,196

1.19

%

1,244,070

26,778

2.15

%

Total interest-bearing deposits

3,063,033

16,624

0.54

%

2,774,487

36,325

1.31

%

Other borrowings

542,937

3,318

0.61

%

477,144

9,255

1.94

%

Subordinated notes and debentures

72,188

4,310

5.97

%

37,037

2,949

7.96

%

Total borrowings

615,125

7,628

1.24

%

514,181

12,204

2.37

%

Total interest-bearing liabilities

$

3,678,158

$

24,252

0.66

%

$

3,288,668

$

48,529

1.48

%

Non-interest-bearing demand deposits

1,624,754

1,238,410

Other liabilities

52,653

41,764

Total stockholders’ equity

784,578

708,200

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

6,140,143

$

5,277,042

Net interest spread(3)

3.58

%

4.00

%

Net interest income, fully taxable equivalent

$

215,770

$

216,759

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

3.81

%

4.48

%

Tax-equivalent adjustment

(792

)

0.01

%

(474

)

0.01

%

Net interest income

$

214,978

$

216,285

Net interest margin(4)

3.80

%

4.47

%

Net loan accretion impact on margin

$

13,058

0.23

%

$

23,190

0.48

%

(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)

As of or For the Three Months Ended

As of or For the Year Ended

(dollars in thousands, except per share data)

December 31,

2020

September 30,

2020

June 30,

2020

March 31,

2020

December 31,

2019

December 31,

2020

December 31,

2019

Net income and earnings per share

excluding significant items

Reported Net Income

$

12,291

$

13,071

$

9,139

$

2,966

$

15,852

$

37,467

$

57,002

Significant items:

Impairment charges on assets held for sale

4,022

32

715

111

4,769

570

Merger-related expense

127

4,340

Core system conversion expense

48

2,049

Tax benefit on impairment charges and

merger-related expenses

(1,120

)

(9

)

(199

)

(79

)

(1,328

)

(1,830

)

Adjusted Net Income

$

15,193

$

13,094

$

9,139

$

3,482

$

16,059

$

40,908

$

62,131

Reported Diluted Earnings per Share

$

0.31

$

0.34

$

0.24

$

0.07

$

0.41

$

0.96

$

1.48

Significant items:

Impairment charges on assets held for sale

0.10

0.02

0.12

0.01

Merger-related expense

0.01

0.12

Core system conversion expense

0.05

Tax benefit on impairment charges and

merger-related expenses

(0.03

)

(0.03

)

(0.04

)

Adjusted Diluted Earnings per Share

$

0.38

$

0.34

$

0.24

$

0.09

$

0.42

$

1.05

$

1.62

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 Year Ended

(dollars in thousands, except per share data,

ratios annualized, where applicable)

December 31,

2020

September 30,

2020

June 30,

2020

March 31,

2020

December 31,

2019

December 31,

2020

December 31,

2019

Adjusted non-interest expense:

Non-interest expense

$

47,021

$

41,687

$

37,053

$

43,661

$

43,720

$

169,422

$

173,830

Less: Significant items

Impairment charges on assets held for sale

4,022

32

715

111

4,769

570

Merger-related expense

127

4,340

Core system conversion expense

48

2,049

Adjusted non-interest expense

$

42,999

$

41,655

$

37,053

$

42,946

$

43,434

$

164,653

$

166,871

Adjusted non-interest expense excluding amortization of intangible assets:

Adjusted non-interest expense

$

42,999

$

41,655

$

37,053

$

42,946

$

43,434

$

164,653

$

166,871

Less: Amortization of intangible assets

1,892

1,947

1,892

1,893

2,002

7,624

7,737

Adjusted non-interest expense excluding

amortization of intangible assets

$

41,107

$

39,708

$

35,161

$

41,053

$

41,432

$

157,029

$

159,134

Pre-tax pre-provision net income:

Pre-tax income

$

16,453

$

18,331

$

12,867

$

4,016

$

20,349

$

51,667

$

77,295

Add: Provision for loan and lease losses

10,236

15,740

15,518

14,455

4,387

55,949

20,708

Pre-tax pre-provision net income

$

26,689

$

34,071

$

28,385

$

18,471

$

24,736

$

107,616

$

98,003

Adjusted pre-tax pre-provision net income:

Pre-tax pre-provision net income

$

26,689

$

34,071

$

28,385

$

18,471

$

24,736

$

107,616

$

98,003

Impairment charges on assets held for sale

4,022

32

715

111

4,769

570

Merger-related expense

127

4,340

Core system conversion expense

48

2,049

Adjusted pre-tax pre-provision net income

$

30,711

$

34,103

$

28,385

$

19,186

$

25,022

$

112,385

$

104,962

Tax Equivalent Net Interest Income

Net interest income

$

56,020

$

53,524

$

52,609

$

52,825

$

53,914

$

214,978

$

216,285

Add: Tax-equivalent adjustment

240

222

188

142

140

792

474

Net interest income, fully taxable equivalent

$

56,260

$

53,746

$

52,797

$

52,967

$

54,054

$

215,770

$

216,759

Total revenues:

Net interest income

$

56,020

$

53,524

$

52,609

$

52,825

$

53,914

$

214,978

$

216,285

Add: Non-interest income

17,690

22,234

12,829

9,307

14,542

62,060

55,548

Total revenues

$

73,710

$

75,758

$

65,438

$

62,132

$

68,456

$

277,038

$

271,833

Tangible common stockholders' equity:

Total stockholders' equity

$

805,464

$

794,696

$

780,935

$

762,667

$

750,115

$

805,464

$

750,115

Less: Preferred stock

10,438

10,438

10,438

10,438

10,438

10,438

10,438

Less: Goodwill and other intangibles

172,631

174,523

176,470

178,362

180,255

172,631

180,255

Tangible common stockholders' equity

$

622,395

$

609,735

$

594,027

$

573,867

$

559,422

$

622,395

$

559,422

Tangible assets:

Total assets

$

6,390,652

$

6,496,513

$

6,393,518

$

5,734,754

$

5,521,809

$

6,390,652

$

5,521,809

Less: Goodwill and other intangibles

172,631

174,523

176,470

178,362

180,255

172,631

180,255

Tangible assets

$

6,218,021

$

6,321,990

$

6,217,048

$

5,556,392

$

5,341,554

$

6,218,021

$

5,341,554

Average tangible common stockholders' equity:

Average total stockholders' equity

$

805,593

$

791,111

$

775,879

$

765,427

$

745,745

$

784,578

$

708,200

Less: Average preferred stock

10,438

10,438

10,438

10,438

10,438

10,438

10,438

Less: Average goodwill and other

intangibles

173,536

175,443

177,440

179,416

179,192

176,448

174,091

Average tangible common stockholders' equity

$

621,619

$

605,230

$

588,001

$

575,573

$

556,115

$

597,692

$

523,671

Average tangible assets:

Average total assets

$

6,400,621

$

6,401,290

$

6,186,974

$

5,565,952

$

5,427,046

$

6,140,143

$

5,277,042

Less: Average goodwill and other

intangibles

173,536

175,443

177,440

179,416

179,192

176,448

174,091

Average tangible assets

$

6,227,085

$

6,225,847

$

6,009,534

$

5,386,536

$

5,247,854

$

5,963,695

$

5,102,951

Tangible net income available to common

stockholders:

Net income available to common stockholders

$

12,095

$

12,875

$

8,944

$

2,770

$

15,656

$

36,684

$

56,219

Add: After-tax intangible asset amortization

1,365

1,405

1,365

1,366

1,444

5,501

5,582

Tangible net income available to common

stockholders

$

13,460

$

14,280

$

10,309

$

4,136

$

17,100

$

42,185

$

61,801

Adjusted tangible net income available to common stockholders:

Tangible net income available to common

stockholders

$

13,460

$

14,280

$

10,309

$

4,136

$

17,100

$

42,185

$

61,801

Impairment charges on assets held for sale

4,022

32

715

111

4,769

570

Merger-related expense

127

4,340

Core system conversion expense

48

2,049

Tax benefit on significant items

(1,120

)

(9

)

(199

)

(79

)

(1,328

)

(1,830

)

Adjusted tangible net income available to

common stockholders

$

16,362

$

14,303

$

10,309

$

4,652

$

17,307

$

45,626

$

66,930

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 Year Ended

(dollars in thousands, except share and per share

data, ratios annualized, where applicable)

December 31,

2020

September 30,

2020

June 30,

2020

March 31,

2020

December 31,

2019

December 31,

2020

December 31,

2019

Pre-tax pre-provision return on average assets:

Pre-tax pre-provision net income

$

26,689

$

34,071

$

28,385

$

18,471

$

24,736

$

107,616

$

98,003

Average total assets

6,400,621

6,401,290

6,186,974

5,565,952

5,427,046

6,140,143

5,277,042

Pre-tax pre-provision return on average assets

1.66

%

2.12

%

1.85

%

1.33

%

1.81

%

1.75

%

1.86

%

Adjusted pre-tax pre-provision return on average

assets:

Adjusted pre-tax pre-provision net income

$

30,711

$

34,103

$

28,385

$

19,186

$

25,022

$

112,385

$

104,962

Average total assets

6,400,621

6,401,290

6,186,974

5,565,952

5,427,046

6,140,143

5,277,042

Adjusted pre-tax pre-provision return on average assets

1.91

%

2.12

%

1.85

%

1.39

%

1.83

%

1.83

%

1.99

%

Net interest margin, fully taxable equivalent

Net interest income, fully taxable equivalent

$

56,260

$

53,746

$

52,797

$

52,967

$

54,054

$

215,770

$

216,759

Total average interest-earning assets

5,913,746

5,916,554

5,703,569

5,097,946

4,956,970

5,659,360

4,837,869

Net interest margin, fully taxable equivalent

3.78

%

3.61

%

3.72

%

4.18

%

4.33

%

3.81

%

4.48

%

Non-interest income to total revenues:

Non-interest income

$

17,690

$

22,234

$

12,829

$

9,307

$

14,542

$

62,060

$

55,548

Total revenues

73,710

75,758

65,438

62,132

68,456

277,038

271,833

Non-interest income to total revenues

24.00

%

29.35

%

19.61

%

14.98

%

21.24

%

22.40

%

20.43

%

Adjusted non-interest expense to average assets:

Adjusted non-interest expense

$

42,999

$

41,655

$

37,053

$

42,946

$

43,434

$

164,653

$

166,871

Average total assets

6,400,621

6,401,290

6,186,974

5,565,952

5,427,046

6,140,143

5,277,042

Adjusted non-interest expense to average assets

2.67

%

2.59

%

2.41

%

3.10

%

3.18

%

2.68

%

3.16

%

Adjusted efficiency ratio:

Adjusted non-interest expense excluding

amortization of intangible assets

$

41,107

$

39,708

$

35,161

$

41,053

$

41,432

$

157,029

$

159,134

Total revenues

73,710

75,758

65,438

62,132

68,456

277,038

271,833

Adjusted efficiency ratio

55.77

%

52.42

%

53.73

%

66.08

%

60.52

%

56.68

%

58.84

%

Adjusted return on average assets:

Adjusted net income

$

15,193

$

13,094

$

9,139

$

3,482

$

16,059

$

40,908

$

62,131

Average total assets

6,400,621

6,401,290

6,186,974

5,565,952

5,427,046

6,140,143

5,277,042

Adjusted return on average assets

0.94

%

0.81

%

0.59

%

0.25

%

1.17

%

0.67

%

1.18

%

Adjusted return on average stockholders' equity:

Adjusted net income

$

15,193

$

13,094

$

9,139

$

3,482

$

16,059

$

40,908

$

62,131

Average stockholders' equity

805,593

791,111

775,879

765,427

745,745

784,578

708,200

Adjusted return on average stockholders' equity

7.50

%

6.58

%

4.74

%

1.83

%

8.54

%

5.21

%

8.77

%

Tangible common equity to tangible assets:

Tangible common equity

$

622,395

$

609,735

$

594,027

$

573,867

$

559,422

$

622,395

$

559,422

Tangible assets

6,218,021

6,321,990

6,217,048

5,556,392

5,341,554

6,218,021

5,341,554

Tangible common equity to tangible assets

10.01

%

9.64

%

9.55

%

10.33

%

10.47

%

10.01

%

10.47

%

Return on average tangible common stockholders' equity:

Tangible net income available to common

stockholders

$

13,460

$

14,280

$

10,309

$

4,136

$

17,100

$

42,185

$

61,801

Average tangible common stockholders' equity

621,619

605,230

588,001

575,573

556,115

597,692

523,671

Return on average tangible common

stockholders' equity

8.61

%

9.39

%

7.05

%

2.89

%

12.20

%

7.06

%

11.80

%

Adjusted return on average tangible common

stockholders' equity:

Adjusted tangible net income available to common stockholders

$

16,362

$

14,303

$

10,309

$

4,652

$

17,307

$

45,626

$

66,930

Average tangible common stockholders' equity

621,619

605,230

588,001

575,573

556,115

597,692

523,671

Adjusted return on average tangible common

stockholders' equity

10.47

%

9.40

%

7.05

%

3.25

%

12.35

%

7.63

%

12.78

%

Tangible book value per share:

Tangible common equity

$

622,395

$

609,735

$

594,027

$

573,867

$

559,422

$

622,395

$

559,422

Common shares outstanding

38,618,054

38,568,916

38,383,217

38,383,021

38,256,500

38,618,054

38,256,500

Tangible book value per share

$

16.12

$

15.81

$

15.47

$

14.95

$

14.62

$

16.12

$

14.62

Contacts:

Investors:
Tony Rossi
Financial Profiles, Inc.
310-622-8221
BYIR@bylinebank.com

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.