8-K
0001702750false00017027502023-01-262023-01-26

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 26, 2023

 

BYLINE BANCORP, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

Delaware

(State or Other Jurisdiction

of Incorporation)

 

 

 

 

001-38139

 

36-3012593

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

 

180 North LaSalle Street, Suite 300

 

 

Chicago, Illinois

 

60601

(Address of Principal Executive Offices)

 

(Zip Code)

(773) 244-7000

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

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

 

☐

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

 

☐

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

 

☐

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

 

☐

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

BY

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

1

 

 

Item 2.02.

 

Results of Operations and Financial Condition.

 

 

On January 26, 2023, Byline Bancorp, Inc., (“Byline" or the "Company”) issued a press release announcing its financial results for the fourth quarter ended December 31, 2022. A copy of the press release is attached as Exhibit 99.1 and is incorporated herein by reference.

 

On January 26, 2023, the Company made available on its website a slide presentation regarding the Company’s fourth quarter 2022 financial results, which will be used as part of a publicly accessible conference call on January 27, 2023. A copy of the slide presentation is attached as Exhibit 99.2 and is incorporated herein by reference.

The information included in Item 2.02 this Current Report on Form 8-K (including the information in the attached exhibits 99.1 and 99.2) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in any such filing.

 

 

Item 9.01.

Financial Statements and Exhibits.

 

 

(d) Exhibits.

 

 

 

 

 

Exhibit

No.

 

Description

 

 

99.1

 

Fourth Quarter 2022 financial results press release, dated January 26, 2023

99.2

 

Slide Presentation regarding fourth quarter 2022 financial results

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

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.

 

2

 

SIGNATURE

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

 

 

 

 

 

 

 

 

 

 

 

 

BYLINE BANCORP, INC.

 

 

 

 

Date: January 26, 2023

 

 

 

By:

/s/ Roberto R. Herencia

 

 

 

 

Name:

Roberto R. Herencia

 

 

 

 

Title:

Executive Chairman and Chief Executive Officer

 

3

 

 

Exhibit 99.1

img195841198_0.jpg  

Byline Bancorp, Inc. Reports Fourth Quarter and Full Year 2022 Financial Results

Select Fourth Quarter 2022 Financial Highlights

•
Net income of $24.4 million, or $0.65 per diluted share
•
Net interest margin of 4.39%; up 36 bps from the previous quarter
•
Pre-tax pre-provision return on average assets of 2.05%
•
Return on average assets of 1.33%; Return on tangible common equity of 17.21%1
•
Efficiency ratio of 55.53%
•
Total loans and leases increased $160.0 million
•
Total deposits increased $82.7 million to $5.7 billion
•
Common Equity Tier 1 to risk weighted assets of 10.20%

Select Full Year 2022 Financial Highlights

•
Net income of $88.0 million, or $2.34 per diluted share
•
Pre-tax pre-provision return on average assets of 1.97%
•
Return on average assets 1.25%; Return on tangible common equity 15.15%1
•
Efficiency ratio of 54.99%
•
Adopted ASU 2016-13 Financial Instruments - Credit Losses (Topic 326) as of January 1, 20222

Chicago, IL, January 26, 2023 – 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 $24.4 million, or $0.65 per diluted share, for the fourth quarter of 2022 compared with net income of $20.4 million, or $0.55 per diluted share, for the third quarter of 2022, and net income of $17.2 million, or $0.45 per diluted share, for the fourth quarter 2021.

Roberto R. Herencia, Executive Chairman and Chief Executive Officer of Byline Bancorp, Inc., commented, “Byline executed its strategy well throughout the year and our focus on customers allowed us to experience solid loan and deposit growth despite a slowing economic environment. We remain committed to executing our strategy of disciplined organic growth in loans and deposits in order to drive higher profitability. We believe our pending acquisition of Inland Bancorp, Inc. will further enhance our position into other attractive Chicago metropolitan markets, provide an important source of stable, low-cost deposits, and further enhance the value of the Byline franchise. I want to thank the Byline employees, who enabled our strong performance for their dedication and hard work.”

Alberto J. Paracchini, President of Byline Bancorp, Inc. added, “We reported strong results in the fourth quarter and ended 2022 on a good note as we delivered positive operating leverage as a result of increased revenues of 4% while continuing to invest in our businesses. Our results were driven by growth in net interest income supported by loan and deposit growth and the benefit of rising interest rates. Our business units performed well during the quarter, and we have good momentum in our areas of strategic focus. As we enter 2023, we remain committed to delivering on our purpose to support new and existing customers, executing our strategy, and growing the value of our franchise.”

 

 

(1)
Represents non-GAAP financial measures. See “Reconciliation of non-GAAP Financial Measures” for a reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measure.
(2)
The previously reported 2022 quarterly financial statements have been recast to reflect the adoption of CECL.

Byline Bancorp, Inc.

Page 2 of 19

Company Adopts ASU 2016-13 Financial Instruments - Credit Losses (Topic 326)

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13 Financial Instruments - Credit Losses (Topic 326) on the recognition of credit losses, otherwise known as the current expected credit loss standard, or "CECL", which replaces the incurred loss impairment methodology with a methodology that reflects current expected credit losses. As an emerging growth company, we elected to delay the adoption of the standard in accordance with ASU No. 2019-10, Effective Dates, which delayed the effective date of the ASU for entities not classified as Public Business Entities. The Company’s EGC status expired during 2022, requiring CECL adoption be reflected in our December 31, 2022 financial statements and Form 10-K.

The Company adopted CECL on December 31, 2022, and has applied it retroactively to the period beginning January 1, 2022 using the modified retrospective method of accounting. Adoption of CECL includes both a $10.1 million retroactive equity adjustment to January 1, 2022 (Day 1) and a $1.7 million fourth quarter adjustment to earnings (net of tax) to account for the difference in provision for credit losses between CECL and the incurred loss methodology for the first three quarters of 2022. Results for reporting periods beginning after September 30, 2022 are presented under the new standard, while prior quarters previously reported are "Recast" as if the new standard had been applied since January 1, 2022. Refer to Appendix A for recast prior quarter financial information as a result of the adoption of the new standard. Ongoing impacts of the CECL methodology will be dependent upon changes in economic conditions and forecasts, originated and acquired loan portfolio composition, credit performance trends, portfolio duration, and other factors.

Board Declares Cash Dividend of $0.09 per Share

On January 24, 2023, the Company's Board of Directors declared a cash dividend of $0.09 per share, payable on February 21, 2023, to stockholders of record of the Company's common stock as of February 7, 2023.

Board Authorizes New Stock Repurchase Program

On December 7, 2022, the Company's Board of Directors approved a new stock repurchase program that authorizes the Company to purchase up to 1.25 million shares of the Company's outstanding common stock. The new program is effective January 1, 2023 until December 31, 2023. Under the previous stock repurchase program that expired on December 31, 2022, Byline repurchased 2,139,262 shares of the 2.5 million total shares authorized for repurchase, including 689,068 shares during 2022. The Company did not repurchase any shares during the fourth quarter of 2022.

 

 

 

 

 

 

Byline Bancorp, Inc.

Page 3 of 19

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

 

 

 

 

 

 

 

 

 

 

 

Recast

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

 

September 30, 2022

 

 

December 31, 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

$

89,368

 

 

$

234

 

 

 

1.04

%

 

$

77,522

 

 

$

210

 

 

 

1.08

%

 

$

106,170

 

 

$

42

 

 

 

0.16

%

Loans and leases(1)

 

5,389,210

 

 

 

85,720

 

 

 

6.31

%

 

 

5,217,779

 

 

$

72,634

 

 

 

5.52

%

 

 

4,610,608

 

 

 

58,570

 

 

 

5.04

%

Taxable securities

 

1,288,750

 

 

 

7,043

 

 

 

2.17

%

 

 

1,306,024

 

 

$

5,963

 

 

 

1.81

%

 

 

1,288,969

 

 

 

5,111

 

 

 

1.57

%

Tax-exempt securities(2)

 

155,562

 

 

 

1,021

 

 

 

2.60

%

 

 

162,591

 

 

$

1,083

 

 

 

2.64

%

 

 

184,015

 

 

 

1,217

 

 

 

2.62

%

Total interest-earning assets

$

6,922,890

 

 

$

94,018

 

 

 

5.39

%

 

$

6,763,916

 

 

$

79,890

 

 

 

4.69

%

 

$

6,189,762

 

 

$

64,940

 

 

 

4.16

%

Allowance for credit losses -
  loans and leases

 

(81,815

)

 

 

 

 

 

 

 

 

(74,383

)

 

 

 

 

 

 

 

 

(59,144

)

 

 

 

 

 

 

All other assets

 

424,978

 

 

 

 

 

 

 

 

 

447,939

 

 

 

 

 

 

 

 

 

568,451

 

 

 

 

 

 

 

TOTAL ASSETS

$

7,266,053

 

 

 

 

 

 

 

 

$

7,137,472

 

 

 

 

 

 

 

 

$

6,699,069

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’
   EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest checking

$

596,627

 

 

$

1,902

 

 

 

1.27

%

 

$

583,777

 

 

$

1,077

 

 

 

0.73

%

 

$

659,841

 

 

$

236

 

 

 

0.14

%

Money market accounts

 

1,472,050

 

 

 

5,458

 

 

 

1.47

%

 

 

1,391,923

 

 

 

3,358

 

 

 

0.96

%

 

 

1,089,398

 

 

 

345

 

 

 

0.13

%

Savings

 

647,536

 

 

 

243

 

 

 

0.15

%

 

 

673,966

 

 

 

247

 

 

 

0.15

%

 

 

633,469

 

 

 

75

 

 

 

0.05

%

Time deposits

 

788,856

 

 

 

3,007

 

 

 

1.51

%

 

 

687,124

 

 

 

1,289

 

 

 

0.74

%

 

 

688,154

 

 

 

381

 

 

 

0.22

%

Total interest-bearing
  deposits

 

3,505,069

 

 

 

10,610

 

 

 

1.20

%

 

 

3,336,790

 

 

 

5,971

 

 

 

0.71

%

 

 

3,070,862

 

 

 

1,037

 

 

 

0.13

%

Other borrowings

 

514,517

 

 

 

4,598

 

 

 

3.55

%

 

 

607,471

 

 

 

3,232

 

 

 

2.11

%

 

 

385,787

 

 

 

330

 

 

 

0.34

%

Subordinated notes and
  debentures

 

110,947

 

 

 

1,992

 

 

 

7.12

%

 

 

110,799

 

 

 

1,825

 

 

 

6.54

%

 

 

110,341

 

 

 

1,589

 

 

 

5.71

%

Total borrowings

 

625,464

 

 

 

6,590

 

 

 

4.18

%

 

 

718,270

 

 

 

5,057

 

 

 

2.79

%

 

 

496,128

 

 

 

1,919

 

 

 

1.53

%

Total interest-bearing liabilities

$

4,130,533

 

 

$

17,200

 

 

 

1.65

%

 

$

4,055,060

 

 

$

11,028

 

 

 

1.08

%

 

$

3,566,990

 

 

$

2,956

 

 

 

0.33

%

Non-interest-bearing
  demand deposits

 

2,235,464

 

 

 

 

 

 

 

 

 

2,198,095

 

 

 

 

 

 

 

 

 

2,222,583

 

 

 

 

 

 

 

Other liabilities

 

151,764

 

 

 

 

 

 

 

 

 

118,496

 

 

 

 

 

 

 

 

 

70,521

 

 

 

 

 

 

 

Total stockholders’ equity

 

748,292

 

 

 

 

 

 

 

 

 

765,821

 

 

 

 

 

 

 

 

 

838,975

 

 

 

 

 

 

 

TOTAL LIABILITIES AND
   STOCKHOLDERS’ EQUITY

$

7,266,053

 

 

 

 

 

 

 

 

$

7,137,472

 

 

 

 

 

 

 

 

$

6,699,069

 

 

 

 

 

 

 

Net interest spread(3)

 

 

 

 

 

 

 

3.74

%

 

 

 

 

 

 

 

 

3.61

%

 

 

 

 

 

 

 

 

3.83

%

Net interest income, fully
  taxable equivalent

 

 

 

$

76,818

 

 

 

 

 

 

 

 

$

68,862

 

 

 

 

 

 

 

 

$

61,984

 

 

 

 

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

 

 

 

 

 

 

 

4.40

%

 

 

 

 

 

 

 

 

4.04

%

 

 

 

 

 

 

 

 

3.97

%

Less: Tax-equivalent adjustment

 

 

 

 

214

 

 

 

0.01

%

 

 

 

 

 

227

 

 

 

0.01

%

 

 

 

 

 

256

 

 

 

0.01

%

Net interest income

 

 

 

$

76,604

 

 

 

 

 

 

 

 

$

68,635

 

 

 

 

 

 

 

 

$

61,728

 

 

 

 

Net interest margin(4)

 

 

 

 

 

 

 

4.39

%

 

 

 

 

 

 

 

 

4.03

%

 

 

 

 

 

 

 

 

3.96

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loan accretion impact
  on margin

 

 

 

$

369

 

 

 

0.02

%

 

 

 

 

$

1,371

 

 

 

0.08

%

 

 

 

 

$

1,450

 

 

 

0.09

%

(1) Loan and lease balances are net of deferred origination fees and costs and initial indirect costs. Non-accrual loans and leases are included in total loan and lease balances.

(2) Interest income and rates include the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis, assuming a federal income tax rate of 21%.

(3) Represents the average rate earned on interest-earning assets minus the average rate paid on interest-bearing liabilities.

(4) Represents net interest income (annualized) divided by total average earning assets.

(5) Average balances are average daily balances.

 

 

Byline Bancorp, Inc.

Page 4 of 19

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

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

 

 

Three Months Ended

 

 

Change from

 

 

 

 

 

 

Recast

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

(dollars in thousands)

 

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

INTEREST AND DIVIDEND INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans and leases

 

$

85,720

 

 

$

72,635

 

 

$

58,570

 

 

 

18.0

%

 

 

46.4

%

Interest on securities

 

 

6,569

 

 

 

6,402

 

 

 

5,619

 

 

 

2.6

%

 

 

16.9

%

Other interest and dividend income

 

 

1,515

 

 

 

626

 

 

 

495

 

 

 

141.9

%

 

 

206.3

%

Total interest and dividend income

 

 

93,804

 

 

 

79,663

 

 

 

64,684

 

 

 

17.7

%

 

 

45.0

%

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

10,610

 

 

 

5,971

 

 

 

1,037

 

 

 

77.7

%

 

 

922.7

%

Other borrowings

 

 

4,598

 

 

 

3,232

 

 

 

330

 

 

 

42.2

%

 

 

1296.1

%

Subordinated notes and debentures

 

 

1,992

 

 

 

1,825

 

 

 

1,589

 

 

 

9.1

%

 

 

25.4

%

Total interest expense

 

 

17,200

 

 

 

11,028

 

 

 

2,956

 

 

 

56.0

%

 

 

481.9

%

Net interest income

 

$

76,604

 

 

$

68,635

 

 

$

61,728

 

 

 

11.6

%

 

 

24.1

%

Net interest income for the fourth quarter of 2022 was $76.6 million, an increase of $8.0 million, or 11.6%, from the third quarter of 2022, driven mainly by the rising interest rate environment.

The increase in net interest income was primarily due to:

•
An increase of $13.1 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 $4.6 million in deposit interest expense mainly due to higher rates paid on deposits; and
•
An increase of $1.4 million in interest expense on other borrowings due to increases in rates paid on FHLB advances.

Tax-equivalent net interest margin for the fourth quarter of 2022 was 4.40%, an increase of 36 basis points compared to the third quarter of 2022. Total net accretion income on acquired loans contributed two basis points to the net interest margin for the fourth quarter of 2022 compared to eight basis points for the third quarter of 2022, an increase of six basis points.

The average cost of total deposits was 0.73% for the fourth quarter of 2022, an increase of 30 basis points compared to the third quarter of 2022. Average non-interest-bearing demand deposits were 38.9% of average total deposits for the fourth quarter of 2022 compared to 39.7% during the third quarter of 2022.

Provision for Credit Losses

The provision for credit losses was $5.8 million for the fourth quarter of 2022, a decrease of $1.4 million compared to $7.2 million for the third quarter of 2022. Provision for credit losses is comprised of provision for loan and lease losses of $5.4 million and provision for unfunded commitments of $426,000. The decrease in provision during the fourth quarter of 2022 was primarily driven by changes to expected losses in the conventional loan portfolio.

 

Byline Bancorp, Inc.

Page 5 of 19

Non-interest Income

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

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

 

 

Three Months Ended

 

 

Change from

 

 

 

 

 

 

Recast

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

(dollars in thousands)

 

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

NON-INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges on deposits

 

$

2,081

 

 

$

2,128

 

 

$

1,955

 

 

 

(2.2

)%

 

 

6.4

%

Loan servicing revenue

 

 

3,293

 

 

 

3,422

 

 

 

3,392

 

 

 

(3.8

)%

 

 

(2.9

)%

Loan servicing asset revaluation

 

 

(3,534

)

 

 

(2,342

)

 

 

(2,510

)

 

 

50.8

%

 

 

40.8

%

ATM and interchange fees

 

 

1,250

 

 

 

1,007

 

 

 

1,219

 

 

 

24.1

%

 

 

2.5

%

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

 

 

—

 

 

 

(2

)

 

 

(21

)

 

NM

 

 

NM

 

Change in fair value of equity securities, net

 

 

710

 

 

 

(581

)

 

 

(98

)

 

NM

 

 

NM

 

Net gains on sales of loans

 

 

5,509

 

 

 

5,580

 

 

 

12,924

 

 

 

(1.3

)%

 

 

(57.4

)%

Wealth management and trust income

 

 

864

 

 

 

995

 

 

 

764

 

 

 

(13.3

)%

 

 

13.1

%

Other non-interest income

 

 

1,282

 

 

 

1,836

 

 

 

1,389

 

 

 

(30.1

)%

 

 

(7.6

)%

Total non-interest income

 

$

11,455

 

 

$

12,043

 

 

$

19,014

 

 

 

(4.9

)%

 

 

(39.8

)%

Non-interest income for the fourth quarter of 2022 was $11.5 million, a decrease of $588,000 or 4.9%, compared to $12.0 million for the third quarter of 2022.

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

•
An increase of $1.2 million in the downward valuation adjustment to the loan servicing asset, due to unfavorable fair value adjustments due to changes in the discount rates.

Partially offset by:

•
An increase of $1.3 million in the change in fair value of equity securities, due to changes in the market value of securities.

During the fourth quarter of 2022, we sold $86.0 million of U.S. government guaranteed loans compared to $75.4 million during the third quarter of 2022.

Non-interest Expense

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

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

 

 

Three Months Ended

 

 

Change from

 

 

 

 

 

 

Recast

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

(dollars in thousands)

 

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

NON-INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

$

31,808

 

 

$

29,587

 

 

$

28,850

 

 

 

7.5

%

 

 

10.3

%

Occupancy and equipment expense, net

 

 

3,532

 

 

 

3,919

 

 

 

4,995

 

 

 

(9.9

)%

 

 

(29.3

)%

Impairment charge on assets held for sale

 

 

372

 

 

 

—

 

 

 

8,351

 

 

NM

 

 

NM

 

Loan and lease related expenses

 

 

1,126

 

 

 

530

 

 

 

2,328

 

 

 

111.9

%

 

 

(51.7

)%

Legal, audit and other professional fees

 

 

3,204

 

 

 

2,733

 

 

 

2,376

 

 

 

17.3

%

 

 

34.9

%

Data processing

 

 

3,406

 

 

 

3,370

 

 

 

3,070

 

 

 

1.1

%

 

 

11.0

%

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

 

 

221

 

 

 

275

 

 

 

26

 

 

 

(19.8

)%

 

NM

 

Other intangible assets amortization expense

 

 

1,596

 

 

 

1,611

 

 

 

1,738

 

 

 

(0.9

)%

 

 

(8.1

)%

Other non-interest expense

 

 

5,235

 

 

 

4,016

 

 

 

7,356

 

 

 

30.3

%

 

 

(28.9

)%

Total non-interest expense

 

$

50,500

 

 

$

46,041

 

 

$

59,090

 

 

 

9.7

%

 

 

(14.4

)%

Non-interest expense for the fourth quarter of 2022 was $50.5 million, an increase of $4.5 million, or 9.7%, from $46.0 million for the third quarter of 2022.

 

Byline Bancorp, Inc.

Page 6 of 19

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

•
An increase of $2.2 million in salaries and employee benefits mainly is due to increased incentive compensation and lower loan deferral costs due to lower originations during the quarter; and
•
An increase of $1.2 million in other non-interest expense, which includes an increase in net losses of $480,000 in leasehold improvements, and increases in general expenses; and
•
An increase of $596,000 in loan and lease related expenses mainly due to higher expenses associated with government guaranteed loans; and
•
An increase of $471,000 in legal, audit and other professional fees primarily related to acquisition activities.

Partially offset by:

•
A decrease of $387,000 in occupancy and equipment expense, net, mainly due to lower real estate tax expenses.

Our efficiency ratio was 55.53% for the fourth quarter of 2022 compared to 55.07% for the third quarter of 2022.

INCOME TAXES

We recorded income tax expense of $7.4 million during the fourth quarter of 2022, compared to $7.0 million during the third quarter of 2022. The effective tax rate was 23.2% and 25.6% for the fourth quarter of 2022 and third quarter of 2022, respectively. The decrease in the effective tax rate is primarily due to a decrease in the state income tax rate.

STATEMENTS OF FINANCIAL CONDITION

Total assets were $7.4 billion at December 31, 2022, an increase of $95.7 million compared to $7.3 billion at September 30, 2022.

The current quarter increase was primarily due to:

•
An increase in net loans and leases of $143.9 million primarily due to growth in the loan and lease portfolio.

Partially offset by:

•
A decrease in securities available-for-sale of $7.2 million primarily due to changes in market conditions.

 

Byline Bancorp, Inc.

Page 7 of 19

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

 

 

 

 

 

 

 

 

Recast

 

 

 

 

 

 

 

 

 

December 31, 2022

 

 

September 30, 2022

 

 

December 31, 2021

 

(dollars in thousands)

 

Amount

 

 

% of Total

 

 

Amount

 

 

% of Total

 

 

Amount

 

 

% of Total

 

Originated loans and leases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

1,712,152

 

 

 

31.6

%

 

$

1,659,218

 

 

 

31.5

%

 

$

1,379,000

 

 

 

30.4

%

Residential real estate

 

 

426,226

 

 

 

7.9

%

 

 

409,926

 

 

 

7.8

%

 

 

379,796

 

 

 

8.4

%

Construction, land development, and
   other land

 

 

438,617

 

 

 

8.1

%

 

 

456,276

 

 

 

8.6

%

 

 

323,886

 

 

 

7.1

%

Commercial and industrial

 

 

2,029,855

 

 

 

37.5

%

 

 

1,938,714

 

 

 

36.8

%

 

 

1,534,745

 

 

 

33.8

%

Paycheck Protection Program

 

 

761

 

 

 

0.0

%

 

 

1,522

 

 

 

0.0

%

 

 

123,712

 

 

 

2.7

%

Installment and other

 

 

1,410

 

 

 

0.0

%

 

 

999

 

 

 

0.0

%

 

 

940

 

 

 

0.0

%

Leasing financing receivables

 

 

521,689

 

 

 

9.6

%

 

 

492,744

 

 

 

9.3

%

 

 

352,247

 

 

 

7.8

%

Total originated loans and leases

 

$

5,130,710

 

 

 

94.7

%

 

$

4,959,399

 

 

 

94.0

%

 

$

4,094,326

 

 

 

90.2

%

Acquired impaired loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

45,143

 

 

 

0.8

%

 

$

49,649

 

 

 

0.9

%

 

$

72,160

 

 

 

1.6

%

Residential real estate

 

 

32,228

 

 

 

0.6

%

 

 

35,309

 

 

 

0.7

%

 

 

49,401

 

 

 

1.1

%

Construction, land development, and
   other land

 

 

372

 

 

 

0.0

%

 

 

1,131

 

 

 

0.0

%

 

 

1,312

 

 

 

0.0

%

Commercial and industrial

 

 

2,192

 

 

 

0.0

%

 

 

2,345

 

 

 

0.1

%

 

 

4,014

 

 

 

0.1

%

Installment and other

 

 

140

 

 

 

0.0

%

 

 

149

 

 

 

0.0

%

 

 

164

 

 

 

0.0

%

Total acquired impaired loans

 

$

80,075

 

 

 

1.4

%

 

$

88,583

 

 

 

1.7

%

 

$

127,051

 

 

 

2.8

%

Acquired non-impaired loans and leases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

152,193

 

 

 

2.8

%

 

$

159,928

 

 

 

3.0

%

 

$

214,588

 

 

 

4.7

%

Residential real estate

 

 

31,508

 

 

 

0.6

%

 

 

36,480

 

 

 

0.7

%

 

 

51,317

 

 

 

1.1

%

Construction, land development, and
   other land

 

 

—

 

 

 

0.0

%

 

 

187

 

 

 

0.0

%

 

 

201

 

 

 

0.1

%

Commercial and industrial

 

 

24,266

 

 

 

0.5

%

 

 

27,249

 

 

 

0.5

%

 

 

43,202

 

 

 

1.0

%

Installment and other

 

 

209

 

 

 

0.0

%

 

 

216

 

 

 

0.0

%

 

 

264

 

 

 

0.0

%

Leasing financing receivables

 

 

2,297

 

 

 

0.0

%

 

 

3,084

 

 

 

0.1

%

 

 

6,179

 

 

 

0.1

%

Total acquired non-impaired loans
   and leases

 

$

210,473

 

 

 

3.9

%

 

$

227,144

 

 

 

4.3

%

 

$

315,751

 

 

 

7.0

%

Total loans and leases

 

$

5,421,258

 

 

 

100.0

%

 

$

5,275,126

 

 

 

100.0

%

 

$

4,537,128

 

 

 

100.0

%

Allowance for credit losses - loans and leases

 

 

(81,924

)

 

 

 

 

 

(79,704

)

 

 

 

 

 

(55,012

)

 

 

 

Total loans and leases, net of allowance for
   credit losses - loans and leases

 

$

5,339,334

 

 

 

 

 

$

5,195,422

 

 

 

 

 

$

4,482,116

 

 

 

 

 

 

Byline Bancorp, Inc.

Page 8 of 19

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, 2022

 

 

 

 

 

 

Recast

 

 

 

 

 

Change from

 

(dollars in thousands)

 

December 31,
2022

 

 

September 30,
2022

 

 

December 31,
2021

 

 

September 30,
2022

 

 

December 31,
2021

 

Non-performing assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans and leases

 

$

36,027

 

 

$

41,942

 

 

$

23,130

 

 

 

(14.1

)%

 

 

55.8

%

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

 

 

—

 

 

 

—

 

 

 

—

 

 

—%

 

 

—%

 

Total non-performing loans and leases

 

$

36,027

 

 

$

41,942

 

 

$

23,130

 

 

 

(14.1

)%

 

 

55.8

%

Other real estate owned

 

 

4,717

 

 

 

4,402

 

 

 

2,112

 

 

 

7.2

%

 

 

123.3

%

Total non-performing assets

 

$

40,744

 

 

$

46,344

 

 

$

25,242

 

 

 

(12.1

)%

 

 

61.4

%

Accruing troubled debt restructured loans (1)

 

$

719

 

 

$

1,113

 

 

$

1,927

 

 

 

(35.4

)%

 

 

(62.7

)%

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

 

 

0.66

%

 

 

0.80

%

 

 

0.51

%

 

 

 

 

 

 

Total non-performing assets as a percentage
   of total assets

 

 

0.55

%

 

 

0.64

%

 

 

0.38

%

 

 

 

 

 

 

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

 

 

227.40

%

 

 

190.03

%

 

 

237.84

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans guaranteed

 

$

2,225

 

 

$

1,676

 

 

$

3,270

 

 

 

32.8

%

 

 

(32.0

)%

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

 

 

—

 

 

 

—

 

 

 

—

 

 

—%

 

 

—%

 

Total non-performing loans guaranteed

 

$

2,225

 

 

$

1,676

 

 

$

3,270

 

 

 

32.8

%

 

 

(32.0

)%

Accruing troubled debt restructured loans
   guaranteed (1)

 

$

—

 

 

$

—

 

 

$

—

 

 

—%

 

 

—%

 

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

 

 

0.62

%

 

 

0.76

%

 

 

0.44

%

 

 

 

 

 

 

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

 

 

0.52

%

 

 

0.61

%

 

 

0.33

%

 

 

 

 

 

 

(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 $36.0 million at December 31, 2022, a decrease of $5.9 million from $41.9 million at September 30, 2022, primarily due to charge-offs of loans previously reserved for.
•
Other real estate owned was $4.7 million at December 31, 2022, an increase of $315,000 from $4.4 million at September 30, 2022, primarily due to the transfer of one property.

Allowance for Credit Losses ("ACL") - Loans and Leases

The following table presents the balance and activity within the allowance for credit losses - loans and leases for the periods indicated:

 

 

Three Months Ended

 

 

 

 

 

 

Recast

 

 

 

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

(dollars in thousands)

 

2022

 

 

2022

 

 

2021

 

ACL - loans and leases, beginning of period

 

$

79,704

 

 

$

74,048

 

 

$

60,598

 

Provision/(recapture) for credit losses - loans and leases

 

 

5,399

 

 

 

7,447

 

 

 

(1,415

)

Net charge-offs

 

 

(3,179

)

 

 

(1,791

)

 

 

(4,171

)

ACL - loans and leases, end of period

 

$

81,924

 

 

$

79,704

 

 

$

55,012

 

 

 

 

 

 

 

 

 

 

 

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

 

 

0.23

%

 

 

0.14

%

 

 

0.36

%

Provision/(recapture) for credit losses
   to net charge-offs during the period

 

 

1.70

x

 

 

4.16

x

 

(0.34)x

 

 

 

Byline Bancorp, Inc.

Page 9 of 19

Net charge-offs of loans and leases during the fourth quarter of 2022 were $3.2 million, or 0.23% of average loans and leases, on an annualized basis, an increase of $1.4 million compared to $1.8 million, or 0.14% of average loans and leases, during the third quarter of 2022, and a decrease of $1.1 million from $4.3 million or 0.36% of average loans and leases from the comparable period a year ago.

Net charge-offs for the fourth quarter of 2022 included $1.3 million in the unguaranteed portion of U.S. government guaranteed loans, while net charge-offs for the third quarter of 2022 and fourth quarter of 2021 included $1.9 million and $1.5 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:

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

Change from

 

(dollars in thousands)

December 31, 2022

 

 

September 30, 2022

 

 

December 31, 2021

 

 

September 30, 2022

 

 

December 31, 2021

 

Non-interest-bearing demand deposits

$

2,138,645

 

 

$

2,142,183

 

 

$

2,158,420

 

 

 

(0.2

)%

 

 

(0.9

)%

Interest-bearing checking accounts

 

592,098

 

 

 

616,139

 

 

 

572,426

 

 

 

(3.9

)%

 

 

3.4

%

Money market demand accounts

 

1,415,653

 

 

 

1,485,815

 

 

 

1,106,272

 

 

 

(4.7

)%

 

 

28.0

%

Other savings

 

625,798

 

 

 

669,734

 

 

 

638,218

 

 

 

(6.6

)%

 

 

(1.9

)%

Time deposits (below $250,000)

 

762,250

 

 

 

586,198

 

 

 

532,589

 

 

 

30.0

%

 

 

43.1

%

Time deposits ($250,000 and above)

 

160,677

 

 

 

112,387

 

 

 

147,122

 

 

 

43.0

%

 

 

9.2

%

Total deposits

$

5,695,121

 

 

$

5,612,456

 

 

$

5,155,047

 

 

 

1.5

%

 

 

10.5

%

Total deposits increased to $5.7 billion at December 31, 2022 compared to $5.6 billion at September 30, 2022. Non-interest-bearing deposits were 37.6% and 38.2% of total deposits at December 31, 2022 and September 30, 2022, respectively.

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

•
An increase in time deposits of $224.3 million, primarily due to promotional certificates of deposit.

Partially offset by:

•
A decrease in money market demand accounts of $70.2 million, due to seasonal commercial outflows.

Total borrowings and other liabilities were $902.0 million at December 31, 2022, a decrease of $17.0 million from $919.0 million at September 30, 2022, primarily driven by decreases in Federal Home Loan Bank advances.

Stockholders’ Equity

Total stockholders’ equity was $765.8 million at December 31, 2022, an increase of $30.0 million from $735.8 million at September 30, 2022. The increase was primarily due to net income and a decrease in accumulated other comprehensive loss.

 

Byline Bancorp, Inc.

Page 10 of 19

The following table presents actual regulatory capital dollar amounts and ratios of the Company and Byline Bank as of December 31, 2022:

 

 

Actual

 

 

Minimum Capital
Required

 

 

Required to be
Considered
Well Capitalized

 

December 31, 2022

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

Total capital to risk weighted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

900,806

 

 

 

13.00

%

 

$

554,436

 

 

 

8.00

%

 

N/A

 

 

N/A

 

Bank

 

 

852,047

 

 

 

12.34

%

 

 

552,507

 

 

 

8.00

%

 

$

690,633

 

 

 

10.00

%

Tier 1 capital to risk weighted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

751,887

 

 

 

10.85

%

 

$

415,827

 

 

 

6.00

%

 

N/A

 

 

N/A

 

Bank

 

 

778,128

 

 

 

11.27

%

 

 

414,380

 

 

 

6.00

%

 

$

552,507

 

 

 

8.00

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

706,887

 

 

 

10.20

%

 

$

311,870

 

 

 

4.50

%

 

N/A

 

 

N/A

 

Bank

 

 

778,128

 

 

 

11.27

%

 

 

310,785

 

 

 

4.50

%

 

$

448,912

 

 

 

6.50

%

Tier 1 capital to average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

751,887

 

 

 

10.29

%

 

$

292,258

 

 

 

4.00

%

 

N/A

 

 

N/A

 

Bank

 

 

778,128

 

 

 

10.67

%

 

$

291,741

 

 

 

4.00

%

 

$

364,676

 

 

 

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. The ratios above reflect the Company’s election to opt into the regulators’ joint CECL transition provision, which allows the Company to phase in the capital impact of the adoption of CECL over the next three years beginning January 1, 2022. Accordingly, capital ratios as of December 31, 2022 reflect 25% of the CECL impact.

Conference Call, Webcast and Slide Presentation

We will host a conference call and webcast at 9:00 a.m. Central Time on Friday, January 27, 2023 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 608025. A recorded replay can be accessed through February 10, 2023 by dialing (866) 813-9403; passcode: 817934.

A slide presentation relating to our fourth 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 of 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 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

 

Byline Bancorp, Inc.

Page 11 of 19

judgment 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.

Contacts:

Investors:

Media:

Brooks Rennie

Erin O’Neill

Investor Relations Director

Marketing Director

312-660-5805

773-475-2901

[email protected]

[email protected]

 

 

 

 

Byline Bancorp, Inc.

Page 12 of 19

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)

 

 

 

 

 

Recast

 

 

Recast

 

 

Recast

 

 

 

 

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

(dollars in thousands)

 

2022

 

 

2022

 

 

2022

 

 

2022

 

 

2021

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

62,274

 

 

$

56,546

 

 

$

58,844

 

 

$

48,015

 

 

$

35,247

 

Interest bearing deposits with other banks

 

 

117,079

 

 

 

159,744

 

 

 

83,057

 

 

 

105,564

 

 

 

122,684

 

Cash and cash equivalents

 

 

179,353

 

 

 

216,290

 

 

 

141,901

 

 

 

153,579

 

 

 

157,931

 

Equity and other securities, at fair value

 

 

7,989

 

 

 

7,279

 

 

 

7,860

 

 

 

10,677

 

 

 

10,578

 

Securities available-for-sale, at fair value

 

 

1,174,431

 

 

 

1,181,654

 

 

 

1,273,138

 

 

 

1,369,368

 

 

 

1,454,542

 

Securities held-to-maturity, at amortized cost

 

 

2,705

 

 

 

3,877

 

 

 

3,880

 

 

 

3,882

 

 

 

3,885

 

Restricted stock, at cost

 

 

28,202

 

 

 

27,077

 

 

 

30,002

 

 

 

13,977

 

 

 

22,002

 

Loans held for sale

 

 

47,823

 

 

 

33,975

 

 

 

17,284

 

 

 

39,520

 

 

 

64,460

 

Loans and leases:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans and leases

 

 

5,421,258

 

 

 

5,275,126

 

 

 

5,167,716

 

 

 

4,787,607

 

 

 

4,537,128

 

Allowance for credit losses - loans and leases

 

 

(81,924

)

 

 

(79,704

)

 

 

(74,048

)

 

 

(72,107

)

 

 

(55,012

)

Net loans and leases

 

 

5,339,334

 

 

 

5,195,422

 

 

 

5,093,668

 

 

 

4,715,500

 

 

 

4,482,116

 

Servicing assets, at fair value

 

 

19,172

 

 

 

21,127

 

 

 

22,155

 

 

 

24,497

 

 

 

23,744

 

Premises and equipment, net

 

 

56,798

 

 

 

59,049

 

 

 

60,773

 

 

 

62,281

 

 

 

62,548

 

Other real estate owned, net

 

 

4,717

 

 

 

4,402

 

 

 

4,749

 

 

 

2,221

 

 

 

2,112

 

Goodwill and other intangible assets, net

 

 

158,887

 

 

 

160,484

 

 

 

162,094

 

 

 

163,962

 

 

 

165,558

 

Bank-owned life insurance

 

 

82,093

 

 

 

81,592

 

 

 

81,100

 

 

 

80,604

 

 

 

80,039

 

Deferred tax assets, net

 

 

68,213

 

 

 

95,831

 

 

 

82,412

 

 

 

71,355

 

 

 

50,329

 

Accrued interest receivable and other assets

 

 

193,224

 

 

 

179,218

 

 

 

143,014

 

 

 

114,035

 

 

 

116,328

 

Total assets

 

$

7,362,941

 

 

$

7,267,277

 

 

$

7,124,030

 

 

$

6,825,458

 

 

$

6,696,172

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing demand deposits

 

$

2,138,645

 

 

$

2,142,183

 

 

$

2,180,927

 

 

$

2,281,612

 

 

$

2,158,420

 

Interest-bearing deposits

 

 

3,556,476

 

 

 

3,470,273

 

 

 

3,207,450

 

 

 

3,248,490

 

 

 

2,996,627

 

Total deposits

 

 

5,695,121

 

 

 

5,612,456

 

 

 

5,388,377

 

 

 

5,530,102

 

 

 

5,155,047

 

Other borrowings

 

 

640,399

 

 

 

653,954

 

 

 

748,092

 

 

 

311,450

 

 

 

519,723

 

Subordinated notes, net

 

 

73,691

 

 

 

73,648

 

 

 

73,604

 

 

 

73,560

 

 

 

73,517

 

Junior subordinated debentures issued to
   capital trusts, net

 

 

37,338

 

 

 

37,232

 

 

 

37,123

 

 

 

37,011

 

 

 

36,906

 

Accrued expenses and other liabilities

 

 

150,576

 

 

 

154,182

 

 

 

121,185

 

 

 

95,675

 

 

 

74,597

 

Total liabilities

 

 

6,597,125

 

 

 

6,531,472

 

 

 

6,368,381

 

 

 

6,047,798

 

 

 

5,859,790

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

10,438

 

Common stock

 

 

389

 

 

 

389

 

 

 

388

 

 

 

388

 

 

 

387

 

Additional paid-in capital

 

 

598,297

 

 

 

597,049

 

 

 

595,938

 

 

 

595,006

 

 

 

593,753

 

Retained earnings

 

 

335,794

 

 

 

314,800

 

 

 

297,766

 

 

 

279,386

 

 

 

271,676

 

Treasury stock

 

 

(51,114

)

 

 

(51,535

)

 

 

(47,181

)

 

 

(40,732

)

 

 

(31,570

)

Accumulated other comprehensive loss, net of tax

 

 

(117,550

)

 

 

(124,898

)

 

 

(91,262

)

 

 

(56,388

)

 

 

(8,302

)

Total stockholders’ equity

 

 

765,816

 

 

 

735,805

 

 

 

755,649

 

 

 

777,660

 

 

 

836,382

 

Total liabilities and stockholders’ equity

 

$

7,362,941

 

 

$

7,267,277

 

 

$

7,124,030

 

 

$

6,825,458

 

 

$

6,696,172

 

 

 

Byline Bancorp, Inc.

Page 13 of 19

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

 

Byline Bancorp, Inc.

Page 14 of 19

 

 

Three Months Ended

 

 

Year Ended

 

 

 

 

 

 

Recast

 

 

Recast

 

 

Recast

 

 

 

 

 

 

 

 

 

 

(dollars in thousands,

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

except per share data)

 

2022

 

 

2022

 

 

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

INTEREST AND DIVIDEND INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans and leases

 

$

85,720

 

 

$

72,635

 

 

$

59,919

 

 

$

55,138

 

 

$

58,570

 

 

$

273,412

 

 

$

222,993

 

Interest on securities

 

 

6,569

 

 

 

6,402

 

 

 

6,264

 

 

 

6,155

 

 

 

5,619

 

 

 

25,390

 

 

 

23,601

 

Other interest and dividend income

 

 

1,515

 

 

 

626

 

 

 

496

 

 

 

120

 

 

 

495

 

 

 

2,757

 

 

 

2,332

 

Total interest and dividend income

 

 

93,804

 

 

 

79,663

 

 

 

66,679

 

 

 

61,413

 

 

 

64,684

 

 

 

301,559

 

 

 

248,926

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

10,610

 

 

 

5,971

 

 

 

2,128

 

 

 

1,087

 

 

 

1,037

 

 

 

19,796

 

 

 

4,502

 

Other borrowings

 

 

4,598

 

 

 

3,232

 

 

 

1,097

 

 

 

395

 

 

 

330

 

 

 

9,322

 

 

 

1,663

 

Subordinated notes and debentures

 

 

1,992

 

 

 

1,825

 

 

 

1,694

 

 

 

1,600

 

 

 

1,589

 

 

 

7,111

 

 

 

6,374

 

Total interest expense

 

 

17,200

 

 

 

11,028

 

 

 

4,919

 

 

 

3,082

 

 

 

2,956

 

 

 

36,229

 

 

 

12,539

 

Net interest income

 

 

76,604

 

 

 

68,635

 

 

 

61,760

 

 

 

58,331

 

 

 

61,728

 

 

 

265,330

 

 

 

236,387

 

PROVISION/(RECAPTURE) FOR CREDIT LOSSES

 

 

5,826

 

 

 

7,208

 

 

 

4,286

 

 

 

6,559

 

 

 

(1,415

)

 

 

23,879

 

 

 

973

 

Net interest income after
  provision/(recapture) for
  credit losses

 

 

70,778

 

 

 

61,427

 

 

 

57,474

 

 

 

51,772

 

 

 

63,143

 

 

 

241,451

 

 

 

235,414

 

NON-INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges on deposits

 

 

2,081

 

 

 

2,128

 

 

 

2,059

 

 

 

1,884

 

 

 

1,955

 

 

 

8,152

 

 

 

7,254

 

Loan servicing revenue

 

 

3,293

 

 

 

3,422

 

 

 

3,384

 

 

 

3,380

 

 

 

3,392

 

 

 

13,479

 

 

 

12,693

 

Loan servicing asset revaluation

 

 

(3,534

)

 

 

(2,342

)

 

 

(4,636

)

 

 

(1,231

)

 

 

(2,510

)

 

 

(11,743

)

 

 

(6,658

)

ATM and interchange fees

 

 

1,250

 

 

 

1,007

 

 

 

1,131

 

 

 

1,049

 

 

 

1,219

 

 

 

4,437

 

 

 

4,476

 

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

 

 

—

 

 

 

(2

)

 

 

52

 

 

 

—

 

 

 

(21

)

 

 

50

 

 

 

1,435

 

Change in fair value of equity
   securities, net

 

 

710

 

 

 

(581

)

 

 

(697

)

 

 

(35

)

 

 

(98

)

 

 

(603

)

 

 

(62

)

Net gains on sales of loans

 

 

5,509

 

 

 

5,580

 

 

 

9,983

 

 

 

10,827

 

 

 

12,924

 

 

 

31,899

 

 

 

46,274

 

Wealth management and trust income

 

 

864

 

 

 

995

 

 

 

900

 

 

 

1,048

 

 

 

764

 

 

 

3,807

 

 

 

3,069

 

Other non-interest income

 

 

1,282

 

 

 

1,836

 

 

 

2,097

 

 

 

2,621

 

 

 

1,389

 

 

 

7,836

 

 

 

5,772

 

Total non-interest income

 

 

11,455

 

 

 

12,043

 

 

 

14,273

 

 

 

19,543

 

 

 

19,014

 

 

 

57,314

 

 

 

74,253

 

NON-INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

31,808

 

 

 

29,587

 

 

 

27,697

 

 

 

28,959

 

 

 

28,850

 

 

 

118,051

 

 

 

101,222

 

Occupancy and equipment expense,
   net

 

 

3,532

 

 

 

3,919

 

 

 

4,409

 

 

 

5,128

 

 

 

4,995

 

 

 

16,988

 

 

 

20,612

 

Impairment charge on assets
   held for sale

 

 

372

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

8,351

 

 

 

372

 

 

 

12,332

 

Loan and lease related expenses

 

 

1,126

 

 

 

530

 

 

 

942

 

 

 

(891

)

 

 

2,328

 

 

 

1,707

 

 

 

5,957

 

Legal, audit, and other
   professional fees

 

 

3,204

 

 

 

2,733

 

 

 

1,820

 

 

 

2,600

 

 

 

2,376

 

 

 

10,357

 

 

 

10,198

 

Data processing

 

 

3,406

 

 

 

3,370

 

 

 

3,396

 

 

 

3,186

 

 

 

3,070

 

 

 

13,358

 

 

 

11,780

 

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

 

 

221

 

 

 

275

 

 

 

158

 

 

 

54

 

 

 

26

 

 

 

708

 

 

 

1,078

 

Other intangible assets amortization
   expense

 

 

1,596

 

 

 

1,611

 

 

 

1,868

 

 

 

1,596

 

 

 

1,738

 

 

 

6,671

 

 

 

7,073

 

Other non-interest expense

 

 

5,235

 

 

 

4,016

 

 

 

3,295

 

 

 

3,324

 

 

 

7,356

 

 

 

15,870

 

 

 

15,203

 

Total non-interest expense

 

 

50,500

 

 

 

46,041

 

 

 

43,585

 

 

 

43,956

 

 

 

59,090

 

 

 

184,082

 

 

 

185,455

 

INCOME BEFORE PROVISION FOR
   INCOME TAXES

 

 

31,733

 

 

 

27,429

 

 

 

28,162

 

 

 

27,359

 

 

 

23,067

 

 

 

114,683

 

 

 

124,212

 

 

Byline Bancorp, Inc.

Page 15 of 19

PROVISION FOR INCOME TAXES

 

 

7,366

 

 

 

7,020

 

 

 

6,382

 

 

 

5,961

 

 

 

5,878

 

 

 

26,729

 

 

 

31,427

 

NET INCOME

 

 

24,367

 

 

 

20,409

 

 

 

21,780

 

 

 

21,398

 

 

 

17,189

 

 

 

87,954

 

 

 

92,785

 

Dividends on preferred shares

 

 

—

 

 

 

—

 

 

 

—

 

 

 

196

 

 

 

196

 

 

 

196

 

 

 

783

 

INCOME AVAILABLE TO COMMON
   STOCKHOLDERS

 

$

24,367

 

 

$

20,409

 

 

$

21,780

 

 

$

21,202

 

 

$

16,993

 

 

$

87,758

 

 

$

92,002

 

EARNINGS PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.66

 

 

$

0.55

 

 

$

0.59

 

 

$

0.57

 

 

$

0.46

 

 

$

2.37

 

 

$

2.45

 

Diluted

 

$

0.65

 

 

$

0.55

 

 

$

0.58

 

 

$

0.56

 

 

$

0.45

 

 

$

2.34

 

 

$

2.40

 

 

Byline Bancorp, Inc.

Page 16 of 19

BYLINE BANCORP, INC. AND SUBSIDIARIES

SELECTED FINANCIAL DATA (unaudited)

 

Byline Bancorp, Inc.

Page 17 of 19

 

As of or For the Three Months Ended

 

 

As of or For the Twelve Months Ended

 

 

 

 

 

Recast

 

 

Recast

 

 

Recast

 

 

 

 

 

 

 

 

 

 

(dollars in thousands, except share

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

and per share data)

2022

 

 

2022

 

 

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

0.66

 

 

$

0.55

 

 

$

0.59

 

 

$

0.57

 

 

$

0.46

 

 

$

2.37

 

 

$

2.45

 

Diluted earnings per common share

$

0.65

 

 

$

0.55

 

 

$

0.58

 

 

$

0.56

 

 

$

0.45

 

 

$

2.34

 

 

$

2.40

 

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

$

0.67

 

 

$

0.55

 

 

$

0.58

 

 

$

0.56

 

 

$

0.69

 

 

$

2.36

 

 

$

2.71

 

Weighted average common shares
   outstanding (basic)

 

36,856,221

 

 

 

36,851,973

 

 

 

37,064,795

 

 

 

37,123,161

 

 

 

37,124,176

 

 

 

36,972,972

 

 

 

37,609,723

 

Weighted average common shares
   outstanding (diluted)

 

37,360,113

 

 

 

37,371,159

 

 

 

37,612,268

 

 

 

38,042,822

 

 

 

37,999,401

 

 

 

37,476,120

 

 

 

38,369,067

 

Common shares outstanding

 

37,492,775

 

 

 

37,465,902

 

 

 

37,669,102

 

 

 

37,811,582

 

 

 

37,713,903

 

 

 

37,492,775

 

 

 

37,713,903

 

Cash dividends per common share

$

0.09

 

 

$

0.09

 

 

$

0.09

 

 

$

0.09

 

 

$

0.09

 

 

$

0.36

 

 

$

0.30

 

Dividend payout ratio on
  common stock

 

13.85

%

 

 

16.36

%

 

 

15.52

%

 

 

16.07

%

 

 

20.00

%

 

 

15.38

%

 

 

12.50

%

Tangible book value per
  common share(1)

$

16.19

 

 

$

15.36

 

 

$

15.76

 

 

$

16.23

 

 

$

17.51

 

 

$

16.19

 

 

$

17.51

 

Key Ratios and Performance Metrics
   (annualized where applicable)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

4.40

%

 

 

4.04

%

 

 

3.78

%

 

 

3.80

%

 

 

3.97

%

 

 

4.01

%

 

 

3.86

%

Average cost of deposits

 

0.73

%

 

 

0.43

%

 

 

0.16

%

 

 

0.08

%

 

 

0.08

%

 

 

0.36

%

 

 

0.09

%

Efficiency ratio(2)

 

55.53

%

 

 

55.07

%

 

 

54.87

%

 

 

54.40

%

 

 

71.03

%

 

 

54.99

%

 

 

57.42

%

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

 

54.50

%

 

 

55.07

%

 

 

54.87

%

 

 

54.40

%

 

 

55.61

%

 

 

54.70

%

 

 

52.14

%

Non-interest income to total
   revenues(1)

 

13.01

%

 

 

14.93

%

 

 

18.77

%

 

 

25.09

%

 

 

23.55

%

 

 

17.76

%

 

 

23.90

%

Non-interest expense to average assets

 

2.76

%

 

 

2.56

%

 

 

2.51

%

 

 

2.66

%

 

 

3.50

%

 

 

2.62

%

 

 

2.79

%

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

 

2.71

%

 

 

2.56

%

 

 

2.51

%

 

 

2.66

%

 

 

2.76

%

 

 

2.61

%

 

 

2.54

%

Return on average stockholders' equity

 

12.92

%

 

 

10.57

%

 

 

11.35

%

 

 

10.56

%

 

 

8.13

%

 

 

11.33

%

 

 

11.31

%

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

 

13.34

%

 

 

10.57

%

 

 

11.35

%

 

 

10.56

%

 

 

12.42

%

 

 

11.43

%

 

 

12.77

%

Return on average assets

 

1.33

%

 

 

1.13

%

 

 

1.25

%

 

 

1.30

%

 

 

1.02

%

 

 

1.25

%

 

 

1.40

%

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

 

1.37

%

 

 

1.13

%

 

 

1.25

%

 

 

1.30

%

 

 

1.56

%

 

 

1.26

%

 

 

1.58

%

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

 

2.05

%

 

 

1.93

%

 

 

1.87

%

 

 

2.05

%

 

 

1.28

%

 

 

1.97

%

 

 

1.88

%

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

 

2.10

%

 

 

1.93

%

 

 

1.87

%

 

 

2.05

%

 

 

2.02

%

 

 

1.99

%

 

 

2.13

%

Return on average tangible common
   stockholders' equity(1)

 

17.21

%

 

 

14.17

%

 

 

15.31

%

 

 

14.02

%

 

 

10.94

%

 

 

15.15

%

 

 

15.17

%

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

 

17.75

%

 

 

14.17

%

 

 

15.31

%

 

 

14.02

%

 

 

16.38

%

 

 

15.28

%

 

 

17.04

%

Non-interest-bearing deposits to
  total deposits

 

37.55

%

 

 

38.17

%

 

 

40.47

%

 

 

41.26

%

 

 

41.87

%

 

 

37.55

%

 

 

41.87

%

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

 

96.03

%

 

 

94.59

%

 

 

96.23

%

 

 

87.29

%

 

 

89.26

%

 

 

96.03

%

 

 

89.26

%

Deposits to total liabilities

 

86.33

%

 

 

85.93

%

 

 

84.61

%

 

 

91.44

%

 

 

87.97

%

 

 

86.33

%

 

 

87.97

%

Deposits per branch

$

149,872

 

 

$

147,696

 

 

$

141,799

 

 

$

125,684

 

 

$

117,160

 

 

$

149,872

 

 

$

117,160

 

Asset Quality Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

0.66

%

 

 

0.80

%

 

 

0.83

%

 

 

0.69

%

 

 

0.51

%

 

 

0.66

%

 

 

0.51

%

 

Byline Bancorp, Inc.

Page 18 of 19

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

 

0.23

%

 

 

0.12

%

 

 

0.17

%

 

 

0.07

%

 

 

0.37

%

 

 

0.32

%

 

 

0.28

%

Capital Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity to total assets

 

10.40

%

 

 

10.12

%

 

 

10.61

%

 

 

11.39

%

 

 

12.33

%

 

 

10.40

%

 

 

12.33

%

Tangible common equity to
  tangible assets(1)

 

8.42

%

 

 

8.10

%

 

 

8.53

%

 

 

9.21

%

 

 

10.11

%

 

 

8.42

%

 

 

10.11

%

Leverage ratio

 

10.29

%

 

 

10.30

%

 

 

10.34

%

 

 

10.70

%

 

 

10.89

%

 

 

10.29

%

 

 

10.89

%

Common equity tier 1 capital ratio

 

10.20

%

 

 

10.24

%

 

 

10.26

%

 

 

10.75

%

 

 

11.39

%

 

 

10.20

%

 

 

11.39

%

Tier 1 capital ratio

 

10.85

%

 

 

10.91

%

 

 

10.95

%

 

 

11.49

%

 

 

12.37

%

 

 

10.85

%

 

 

12.37

%

Total capital ratio

 

13.00

%

 

 

13.02

%

 

 

13.09

%

 

 

13.72

%

 

 

14.70

%

 

 

13.00

%

 

 

14.70

%

(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.

Page 19 of 19

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,

 

 

 

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

 

$

76,978

 

 

$

547

 

 

 

0.71

%

 

$

69,338

 

 

$

117

 

 

 

0.17

%

Loans and leases(1)

 

 

5,073,288

 

 

 

273,412

 

 

 

5.39

%

 

 

4,518,836

 

 

 

222,993

 

 

 

4.93

%

Taxable securities

 

 

1,316,147

 

 

 

24,156

 

 

 

1.84

%

 

 

1,376,045

 

 

 

21,909

 

 

 

1.59

%

Tax-exempt securities(2)

 

 

164,051

 

 

 

4,359

 

 

 

2.66

%

 

 

184,622

 

 

 

4,946

 

 

 

2.68

%

Total interest-earning assets

 

$

6,630,464

 

 

$

302,474

 

 

 

4.56

%

 

$

6,148,841

 

 

$

249,965

 

 

 

4.07

%

Allowance for credit losses - loans and leases

 

 

(74,233

)

 

 

 

 

 

 

 

 

(63,351

)

 

 

 

 

 

 

All other assets

 

 

462,548

 

 

 

 

 

 

 

 

 

556,641

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

7,018,779

 

 

 

 

 

 

 

 

$

6,642,131

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’
   EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest checking

 

$

593,903

 

 

$

3,572

 

 

 

0.60

%

 

$

622,147

 

 

$

883

 

 

 

0.14

%

Money market accounts

 

 

1,357,371

 

 

 

10,484

 

 

 

0.77

%

 

 

1,073,970

 

 

 

1,285

 

 

 

0.12

%

Savings

 

 

658,968

 

 

 

649

 

 

 

0.10

%

 

 

610,953

 

 

 

289

 

 

 

0.05

%

Time deposits

 

 

691,650

 

 

 

5,091

 

 

 

0.74

%

 

 

722,974

 

 

 

2,045

 

 

 

0.28

%

Total interest-bearing deposits

 

 

3,301,892

 

 

 

19,796

 

 

 

0.60

%

 

 

3,030,044

 

 

 

4,502

 

 

 

0.15

%

Other borrowings

 

 

479,004

 

 

 

9,322

 

 

 

1.95

%

 

 

525,078

 

 

 

1,663

 

 

 

0.32

%

Subordinated notes and debentures

 

 

110,723

 

 

 

7,111

 

 

 

6.42

%

 

 

110,108

 

 

 

6,374

 

 

 

5.79

%

Total borrowings

 

 

589,727

 

 

 

16,433

 

 

 

2.79

%

 

 

635,186

 

 

 

8,037

 

 

 

1.27

%

Total interest-bearing liabilities

 

$

3,891,619

 

 

$

36,229

 

 

 

0.93

%

 

$

3,665,230

 

 

$

12,539

 

 

 

0.34

%

Non-interest-bearing demand deposits

 

 

2,236,615

 

 

 

 

 

 

 

 

 

2,085,454

 

 

 

 

 

 

 

Other liabilities

 

 

114,320

 

 

 

 

 

 

 

 

 

71,430

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

776,225

 

 

 

 

 

 

 

 

 

820,017

 

 

 

 

 

 

 

TOTAL LIABILITIES AND
   STOCKHOLDERS’ EQUITY

 

$

7,018,779

 

 

 

 

 

 

 

 

$

6,642,131

 

 

 

 

 

 

 

Net interest spread(3)

 

 

 

 

 

 

 

 

3.63

%

 

 

 

 

 

 

 

 

3.73

%

Net interest income, fully
  taxable equivalent

 

 

 

 

$

266,245

 

 

 

 

 

 

 

 

$

237,426

 

 

 

 

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

 

 

 

 

 

 

 

 

4.01

%

 

 

 

 

 

 

 

 

3.86

%

Less: Tax-equivalent adjustment

 

 

 

 

 

915

 

 

 

0.01

%

 

 

 

 

 

1,039

 

 

 

0.02

%

Net interest income

 

 

 

 

$

265,330

 

 

 

 

 

 

 

 

$

236,387

 

 

 

 

Net interest margin(4)

 

 

 

 

 

 

 

 

4.00

%

 

 

 

 

 

 

 

 

3.84

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loan accretion impact on margin

 

 

 

 

$

4,555

 

 

 

0.07

%

 

 

 

 

$

6,451

 

 

 

0.10

%

 

(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.

Page 20 of 19

BYLINE BANCORP, INC. AND SUBSIDIARIES

APPENDIX A - IMPACT OF THE ADOPTION OF CECL (unaudited)

 

The following tables have been included to provide additional information regarding the Company’s adoption of the new CECL accounting standard. The Company adopted CECL on December 31, 2022 and retroactively applied it to the period beginning January 1, 2022 using the modified retrospective method of accounting. The first table reflects the adoption adjustments for CECL that were made to the January 1, 2022 balances for key balance sheet accounts.

 

 

 

January 1, 2022

 

(dollars in thousands)

 

Pre-CECL Adoption

 

 

Impact of CECL Adoption

 

 

As Reported under CECL

 

Balance Sheet:

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

Allowance for credit losses - loans and leases

 

$

55,012

 

 

$

12,168

 

 

$

67,180

 

Deferred tax assets, net

 

 

50,329

 

 

 

3,679

 

 

 

54,008

 

LIABILITIES

 

 

 

 

 

 

 

 

 

Allowance for credit losses on unfunded commitments

 

$

1,403

 

 

$

1,595

 

 

$

2,998

 

EQUITY

 

 

 

 

 

 

 

 

 

Retained earnings

 

$

271,676

 

 

$

(10,097

)

 

$

261,579

 

 

The second table presents the impact of CECL on 2022 quarters previously reported using the incurred loss method of accounting. The table includes adjustments made to key balance sheet and income statement accounts to reflect how the balances would have been reflected had CECL been in effect for the full year.

 

 

 

Three Months Ended

 

 

 

March 31, 2022

 

 

June 30, 2022

 

 

September 30, 2022

 

(dollars in thousands)

 

As Reported

 

 

Adjustment

 

 

Recast

 

 

As Reported

 

 

Adjustment

 

 

Recast

 

 

As Reported

 

 

Adjustment

 

 

Recast

 

Balance Sheet:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans and leases

 

$

4,789,068

 

 

$

(1,461

)

 

$

4,787,607

 

 

$

5,168,071

 

 

$

(355

)

 

$

5,167,716

 

 

$

5,275,471

 

 

$

(345

)

 

$

5,275,126

 

Allowance for credit losses
   - loans and leases

 

 

(59,458

)

 

 

(12,649

)

 

 

(72,107

)

 

 

(62,436

)

 

 

(11,612

)

 

 

(74,048

)

 

 

(64,655

)

 

 

(15,049

)

 

 

(79,704

)

Deferred tax assets, net

 

 

67,335

 

 

 

4,020

 

 

 

71,355

 

 

 

78,950

 

 

 

3,462

 

 

 

82,412

 

 

 

91,532

 

 

 

4,299

 

 

 

95,831

 

Accrued interest receivable
   and other assets

 

 

113,123

 

 

 

912

 

 

 

114,035

 

 

 

142,196

 

 

 

818

 

 

 

143,014

 

 

 

178,433

 

 

 

785

 

 

 

179,218

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses
  - unfunded commitments

 

 

2,003

 

 

 

1,832

 

 

 

3,835

 

 

 

2,191

 

 

 

1,825

 

 

 

4,016

 

 

 

2,327

 

 

 

1,450

 

 

 

3,777

 

EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retained earnings

 

 

290,397

 

 

 

(11,011

)

 

 

279,386

 

 

 

307,278

 

 

 

(9,512

)

 

 

297,766

 

 

 

326,560

 

 

 

(11,760

)

 

 

314,800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Statement:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses -
  loans and leases

 

$

4,995

 

 

$

728

 

 

$

5,723

 

 

$

5,908

 

 

$

(1,803

)

 

$

4,105

 

 

$

4,176

 

 

$

3,271

 

 

$

7,447

 

Provision for credit losses
   - unfunded commitments

 

 

599

 

 

 

237

 

 

 

836

 

 

 

188

 

 

 

(7

)

 

 

181

 

 

 

137

 

 

 

(376

)

 

 

(239

)

Net interest income after
  provision for credit losses

 

 

53,741

 

 

 

(1,969

)

 

 

51,772

 

 

 

55,719

 

 

 

1,755

 

 

 

57,474

 

 

 

64,699

 

 

 

(3,272

)

 

 

61,427

 

Income before provision
  for income taxes

 

 

28,612

 

 

 

(1,253

)

 

 

27,359

 

 

 

26,107

 

 

 

2,055

 

 

 

28,162

 

 

 

30,513

 

 

 

(3,084

)

 

 

27,429

 

Provision for income taxes

 

 

6,301

 

 

 

(340

)

 

 

5,961

 

 

 

5,824

 

 

 

558

 

 

 

6,382

 

 

 

7,857

 

 

 

(837

)

 

 

7,020

 

Net income

 

$

22,311

 

 

$

(913

)

 

$

21,398

 

 

$

20,283

 

 

$

1,497

 

 

$

21,780

 

 

$

22,656

 

 

$

(2,247

)

 

$

20,409

 

Net income available to
  common shareholders

 

$

22,115

 

 

$

(913

)

 

$

21,202

 

 

$

20,283

 

 

$

1,497

 

 

$

21,780

 

 

$

22,656

 

 

$

(2,247

)

 

$

20,409

 

EARNINGS PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

0.60

 

 

 

(0.03

)

 

 

0.57

 

 

 

0.55

 

 

 

0.04

 

 

 

0.59

 

 

 

0.61

 

 

 

(0.06

)

 

 

0.55

 

Diluted

 

 

0.58

 

 

 

(0.02

)

 

 

0.56

 

 

 

0.54

 

 

 

0.04

 

 

 

0.58

 

 

 

0.61

 

 

 

(0.06

)

 

 

0.55

 

 

 

 

 

 

Byline Bancorp, Inc.

Page 21 of 19

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 Twelve Months Ended

 

 

 

 

 

 

Recast

 

 

Recast

 

 

Recast

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

(dollars in thousands, except per share data)

 

2022

 

 

2022

 

 

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income and earnings per share
   excluding significant items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Net Income

 

$

24,367

 

 

$

20,409

 

 

$

21,780

 

 

$

21,398

 

 

$

17,189

 

 

$

87,954

 

 

$

92,785

 

Significant items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment charges on assets held
   for sale and ROU asset

 

 

372

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

12,449

 

 

 

372

 

 

 

16,430

 

Merger-related expenses

 

 

538

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

538

 

 

 

—

 

Tax benefit

 

 

(118

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(3,377

)

 

 

(118

)

 

 

(4,462

)

Adjusted Net Income

 

$

25,159

 

 

$

20,409

 

 

$

21,780

 

 

$

21,398

 

 

$

26,261

 

 

$

88,746

 

 

$

104,753

 

Reported Diluted Earnings per Share

 

$

0.65

 

 

$

0.55

 

 

$

0.58

 

 

$

0.56

 

 

$

0.45

 

 

$

2.34

 

 

$

2.40

 

Significant items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment charges on assets held
   for sale and ROU asset

 

 

0.01

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

0.33

 

 

 

0.01

 

 

 

0.43

 

Merger-related expenses

 

 

0.01

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

0.01

 

 

 

—

 

Tax benefit

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(0.09

)

 

 

—

 

 

 

(0.12

)

Adjusted Diluted Earnings per Share

 

$

0.67

 

 

$

0.55

 

 

$

0.58

 

 

$

0.56

 

 

$

0.69

 

 

$

2.36

 

 

$

2.71

 

 

 

 

Byline Bancorp, Inc.

Page 22 of 19

BYLINE BANCORP, INC. AND SUBSIDIARIES

 

Byline Bancorp, Inc.

Page 23 of 19

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited)

 

 

Byline Bancorp, Inc.

Page 24 of 19

 

 

As of or For the Three Months Ended

 

 

As of or For the Twelve Months Ended

 

 

 

 

 

 

Recast

 

 

Recast

 

 

Recast

 

 

 

 

 

 

 

 

 

 

(dollars in thousands, except per share data,

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

ratios annualized, where applicable)

 

2022

 

 

2022

 

 

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Adjusted non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense

 

$

50,500

 

 

$

46,041

 

 

$

43,585

 

 

$

43,956

 

 

$

59,090

 

 

$

184,082

 

 

$

185,455

 

Less: Significant items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment charges on assets held for sale
  and ROU asset

 

 

372

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

12,449

 

 

 

372

 

 

 

16,430

 

Merger-related expenses

 

 

538

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

538

 

 

 

—

 

Adjusted non-interest expense

 

$

49,590

 

 

$

46,041

 

 

$

43,585

 

 

$

43,956

 

 

$

46,641

 

 

$

183,172

 

 

$

169,025

 

Adjusted non-interest expense excluding
   amortization of intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted non-interest expense

 

$

49,590

 

 

$

46,041

 

 

$

43,585

 

 

$

43,956

 

 

$

46,641

 

 

$

183,172

 

 

$

169,025

 

Less: Amortization of intangible assets

 

 

1,596

 

 

 

1,611

 

 

 

1,868

 

 

 

1,596

 

 

 

1,738

 

 

 

6,671

 

 

 

7,073

 

Adjusted non-interest expense excluding
   amortization of intangible assets

 

$

47,994

 

 

$

44,430

 

 

$

41,717

 

 

$

42,360

 

 

$

44,903

 

 

$

176,501

 

 

$

161,952

 

Pre-tax pre-provision net income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income

 

$

31,733

 

 

$

27,429

 

 

$

28,162

 

 

$

27,359

 

 

$

23,067

 

 

$

114,683

 

 

$

124,212

 

Add: Provision/(recapture) for credit losses

 

 

5,826

 

 

 

7,208

 

 

 

4,286

 

 

 

6,559

 

 

 

(1,415

)

 

 

23,879

 

 

 

973

 

Pre-tax pre-provision net income

 

$

37,559

 

 

$

34,637

 

 

$

32,448

 

 

$

33,918

 

 

$

21,652

 

 

$

138,562

 

 

$

125,185

 

Adjusted pre-tax pre-provision net income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax pre-provision net income

 

$

37,559

 

 

$

34,637

 

 

$

32,448

 

 

$

33,918

 

 

$

21,652

 

 

$

138,562

 

 

$

125,185

 

Add: Impairment charges on assets held for sale
  and ROU asset

 

 

372

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

12,449

 

 

 

372

 

 

 

16,430

 

Add: Merger-related expenses

 

 

538

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

538

 

 

 

—

 

Adjusted pre-tax pre-provision net income

 

$

38,469

 

 

$

34,637

 

 

$

32,448

 

 

$

33,918

 

 

$

34,101

 

 

$

139,472

 

 

$

141,615

 

Tax equivalent net interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

76,604

 

 

$

68,635

 

 

$

61,760

 

 

$

58,331

 

 

$

61,728

 

 

$

265,330

 

 

$

236,387

 

Add: Tax-equivalent adjustment

 

 

214

 

 

 

228

 

 

 

236

 

 

 

236

 

 

 

256

 

 

 

915

 

 

 

1,039

 

Net interest income, fully taxable equivalent

 

$

76,818

 

 

$

68,863

 

 

$

61,996

 

 

$

58,567

 

 

$

61,984

 

 

$

266,245

 

 

$

237,426

 

Total revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

76,604

 

 

$

68,635

 

 

$

61,760

 

 

$

58,331

 

 

$

61,728

 

 

$

265,330

 

 

$

236,387

 

Add: Non-interest income

 

 

11,455

 

 

 

12,043

 

 

 

14,273

 

 

 

19,543

 

 

 

19,014

 

 

 

57,314

 

 

 

74,253

 

Total revenue

 

$

88,059

 

 

$

80,678

 

 

$

76,033

 

 

$

77,874

 

 

$

80,742

 

 

$

322,644

 

 

$

310,640

 

Tangible common stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

$

765,816

 

 

$

735,805

 

 

$

755,649

 

 

$

777,660

 

 

$

836,382

 

 

$

765,816

 

 

$

836,382

 

Less: Preferred stock

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

10,438

 

 

 

—

 

 

 

10,438

 

Less: Goodwill and other intangibles

 

 

158,887

 

 

 

160,484

 

 

 

162,094

 

 

 

163,962

 

 

 

165,558

 

 

 

158,887

 

 

 

165,558

 

Tangible common stockholders' equity

 

$

606,929

 

 

$

575,321

 

 

$

593,555

 

 

$

613,698

 

 

$

660,386

 

 

$

606,929

 

 

$

660,386

 

Tangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

7,362,941

 

 

$

7,267,277

 

 

$

7,124,030

 

 

$

6,825,458

 

 

$

6,696,172

 

 

$

7,362,941

 

 

$

6,696,172

 

Less: Goodwill and other intangibles

 

 

158,887

 

 

 

160,484

 

 

 

162,094

 

 

 

163,962

 

 

 

165,558

 

 

 

158,887

 

 

 

165,558

 

Tangible assets

 

$

7,204,054

 

 

$

7,106,793

 

 

$

6,961,936

 

 

$

6,661,496

 

 

$

6,530,614

 

 

$

7,204,054

 

 

$

6,530,614

 

Average tangible common stockholders'
   equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total stockholders' equity

 

$

748,292

 

 

$

765,821

 

 

$

769,658

 

 

$

822,053

 

 

$

838,975

 

 

$

776,225

 

 

$

820,017

 

Less: Average preferred stock

 

 

—

 

 

 

—

 

 

 

—

 

 

 

9,974

 

 

 

10,438

 

 

 

2,459

 

 

 

10,438

 

Less: Average goodwill and other
   intangibles

 

 

159,680

 

 

 

161,292

 

 

 

163,068

 

 

 

164,837

 

 

 

166,396

 

 

 

162,203

 

 

 

169,042

 

Average tangible common stockholders'
  equity

 

$

588,612

 

 

$

604,529

 

 

$

606,590

 

 

$

647,242

 

 

$

662,141

 

 

$

611,563

 

 

$

640,537

 

Average tangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total assets

 

$

7,266,053

 

 

$

7,137,472

 

 

$

6,966,564

 

 

$

6,697,476

 

 

$

6,699,069

 

 

$

7,018,779

 

 

$

6,642,131

 

Less: Average goodwill and other
   intangibles

 

 

159,680

 

 

 

161,292

 

 

 

163,068

 

 

 

164,837

 

 

 

166,396

 

 

 

162,203

 

 

 

169,042

 

Average tangible assets

 

$

7,106,373

 

 

$

6,976,180

 

 

$

6,803,496

 

 

$

6,532,639

 

 

$

6,532,673

 

 

$

6,856,576

 

 

$

6,473,089

 

Tangible net income available to common
   stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common
  stockholders

 

$

24,367

 

 

$

20,409

 

 

$

21,780

 

 

$

21,202

 

 

$

16,993

 

 

$

87,758

 

 

$

92,002

 

Add: After-tax intangible asset amortization

 

 

1,170

 

 

 

1,181

 

 

 

1,369

 

 

 

1,170

 

 

 

1,266

 

 

 

4,890

 

 

 

5,147

 

Tangible net income available to common
   stockholders

 

$

25,537

 

 

$

21,590

 

 

$

23,149

 

 

$

22,372

 

 

$

18,259

 

 

$

92,648

 

 

$

97,149

 

Adjusted tangible net income available
  to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Byline Bancorp, Inc.

Page 25 of 19

Tangible net income available to common
   stockholders

 

$

25,537

 

 

$

21,590

 

 

$

23,149

 

 

$

22,372

 

 

$

18,259

 

 

$

92,648

 

 

$

97,149

 

Impairment charges on assets held for sale
  and ROU asset

 

 

372

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

12,449

 

 

 

372

 

 

 

16,430

 

Merger-related expenses

 

 

538

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

538

 

 

 

—

 

Tax benefit on significant items

 

 

(118

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(3,377

)

 

 

(118

)

 

 

(4,462

)

Adjusted tangible net income available to
   common stockholders

 

$

26,329

 

 

$

21,590

 

 

$

23,149

 

 

$

22,372

 

 

$

27,331

 

 

$

93,440

 

 

$

109,117

 

 

 

 

Byline Bancorp, Inc.

Page 26 of 19

BYLINE BANCORP, INC. AND SUBSIDIARIES

 

Byline Bancorp, Inc.

Page 27 of 19

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited)

 

 

 

As of or For the Three Months Ended

 

 

As of or For the Twelve Months Ended

 

 

 

 

 

 

Recast

 

 

Recast

 

 

Recast

 

 

 

 

 

 

 

 

 

 

(dollars in thousands, except share and per share

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

data, ratios annualized, where applicable)

 

2022

 

 

2022

 

 

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Pre-tax pre-provision return on average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax pre-provision net income

 

$

37,559

 

 

$

34,637

 

 

$

32,448

 

 

$

33,918

 

 

$

21,652

 

 

$

138,562

 

 

$

125,185

 

Average total assets

 

 

7,266,053

 

 

 

7,137,472

 

 

 

6,966,564

 

 

 

6,697,476

 

 

 

6,699,069

 

 

 

7,018,779

 

 

 

6,642,131

 

Pre-tax pre-provision return on average assets

 

 

2.05

%

 

 

1.93

%

 

 

1.87

%

 

 

2.05

%

 

 

1.28

%

 

 

1.97

%

 

 

1.88

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted pre-tax pre-provision net income

 

$

38,469

 

 

$

34,637

 

 

$

32,448

 

 

$

33,918

 

 

$

34,101

 

 

$

139,472

 

 

$

141,615

 

Average total assets

 

 

7,266,053

 

 

 

7,137,472

 

 

 

6,966,564

 

 

 

6,697,476

 

 

 

6,699,069

 

 

 

7,018,779

 

 

 

6,642,131

 

Adjusted pre-tax pre-provision return on average
   assets

 

 

2.10

%

 

 

1.93

%

 

 

1.87

%

 

 

2.05

%

 

 

2.02

%

 

 

1.99

%

 

 

2.13

%

Net interest margin, fully taxable equivalent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income, fully taxable equivalent

 

$

76,818

 

 

$

68,863

 

 

$

61,996

 

 

$

58,567

 

 

$

61,984

 

 

$

266,245

 

 

$

237,426

 

Total average interest-earning assets

 

 

6,922,890

 

 

 

6,763,916

 

 

 

6,572,416

 

 

 

6,252,866

 

 

 

6,189,762

 

 

 

6,630,464

 

 

 

6,148,841

 

Net interest margin, fully taxable equivalent

 

 

4.40

%

 

 

4.04

%

 

 

3.78

%

 

 

3.80

%

 

 

3.97

%

 

 

4.01

%

 

 

3.86

%

Non-interest income to total revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income

 

$

11,455

 

 

$

12,043

 

 

$

14,273

 

 

$

19,543

 

 

$

19,014

 

 

$

57,314

 

 

$

74,253

 

Total revenues

 

 

88,059

 

 

 

80,678

 

 

 

76,033

 

 

 

77,874

 

 

 

80,742

 

 

 

322,644

 

 

 

310,640

 

Non-interest income to total revenues

 

 

13.01

%

 

 

14.93

%

 

 

18.77

%

 

 

25.09

%

 

 

23.55

%

 

 

17.76

%

 

 

23.90

%

Adjusted non-interest expense to average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted non-interest expense

 

$

49,590

 

 

$

46,041

 

 

$

43,585

 

 

$

43,956

 

 

$

46,641

 

 

$

183,172

 

 

$

169,025

 

Average total assets

 

 

7,266,053

 

 

 

7,137,472

 

 

 

6,966,564

 

 

 

6,697,476

 

 

 

6,699,069

 

 

 

7,018,779

 

 

 

6,642,131

 

Adjusted non-interest expense to average assets

 

 

2.71

%

 

 

2.56

%

 

 

2.51

%

 

 

2.66

%

 

 

2.76

%

 

 

2.61

%

 

 

2.54

%

Adjusted efficiency ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted non-interest expense excluding
   amortization of intangible assets

 

$

47,994

 

 

$

44,430

 

 

$

41,717

 

 

$

42,360

 

 

$

44,903

 

 

$

176,501

 

 

$

161,952

 

Total revenues

 

 

88,059

 

 

 

80,678

 

 

 

76,033

 

 

 

77,874

 

 

 

80,742

 

 

 

322,644

 

 

 

310,640

 

Adjusted efficiency ratio

 

 

54.50

%

 

 

55.07

%

 

 

54.87

%

 

 

54.40

%

 

 

55.61

%

 

 

54.70

%

 

 

52.14

%

Adjusted return on average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

 

$

25,159

 

 

$

20,409

 

 

$

21,780

 

 

$

21,398

 

 

$

26,261

 

 

$

88,746

 

 

$

104,753

 

Average total assets

 

 

7,266,053

 

 

 

7,137,472

 

 

 

6,966,564

 

 

 

6,697,476

 

 

 

6,699,069

 

 

 

7,018,779

 

 

 

6,642,131

 

Adjusted return on average assets

 

 

1.37

%

 

 

1.13

%

 

 

1.25

%

 

 

1.30

%

 

 

1.56

%

 

 

1.26

%

 

 

1.58

%

Adjusted return on average stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

 

$

25,159

 

 

$

20,409

 

 

$

21,780

 

 

$

21,398

 

 

$

26,261

 

 

$

88,746

 

 

$

104,753

 

Average stockholders' equity

 

 

748,292

 

 

 

765,821

 

 

 

769,658

 

 

 

822,053

 

 

 

838,975

 

 

 

776,225

 

 

 

820,017

 

Adjusted return on average stockholders' equity

 

 

13.34

%

 

 

10.57

%

 

 

11.35

%

 

 

10.56

%

 

 

12.42

%

 

 

11.43

%

 

 

12.77

%

Tangible common equity to tangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity

 

$

606,929

 

 

$

575,321

 

 

$

593,555

 

 

$

613,698

 

 

$

660,386

 

 

$

606,929

 

 

$

660,386

 

Tangible assets

 

 

7,204,054

 

 

 

7,106,793

 

 

 

6,961,936

 

 

 

6,661,496

 

 

 

6,530,614

 

 

 

7,204,054

 

 

 

6,530,614

 

Tangible common equity to tangible assets

 

 

8.42

%

 

 

8.10

%

 

 

8.53

%

 

 

9.21

%

 

 

10.11

%

 

 

8.42

%

 

 

10.11

%

Return on average tangible common stockholders'
   equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible net income available to common
   stockholders

 

$

25,537

 

 

$

21,590

 

 

$

23,149

 

 

$

22,372

 

 

$

18,259

 

 

$

92,648

 

 

$

97,149

 

Average tangible common stockholders' equity

 

 

588,612

 

 

 

604,529

 

 

 

606,590

 

 

 

647,242

 

 

 

662,141

 

 

 

611,563

 

 

 

640,537

 

Return on average tangible common
   stockholders' equity

 

 

17.21

%

 

 

14.17

%

 

 

15.31

%

 

 

14.02

%

 

 

10.94

%

 

 

15.15

%

 

 

15.17

%

Adjusted return on average tangible common
   stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted tangible net income available to
   common stockholders

 

$

26,329

 

 

$

21,590

 

 

$

23,149

 

 

$

22,372

 

 

$

27,331

 

 

$

93,440

 

 

$

109,117

 

Average tangible common stockholders' equity

 

 

588,612

 

 

 

604,529

 

 

 

606,590

 

 

 

647,242

 

 

 

662,141

 

 

 

611,563

 

 

 

640,537

 

Adjusted return on average tangible common
   stockholders' equity

 

 

17.75

%

 

 

14.17

%

 

 

15.31

%

 

 

14.02

%

 

 

16.38

%

 

 

15.28

%

 

 

17.04

%

Tangible book value per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity

 

$

606,929

 

 

$

575,321

 

 

$

593,555

 

 

$

613,698

 

 

$

660,386

 

 

$

606,929

 

 

$

660,386

 

Common shares outstanding

 

 

37,492,775

 

 

 

37,465,902

 

 

 

37,669,102

 

 

 

37,811,582

 

 

 

37,713,903

 

 

 

37,492,775

 

 

 

37,713,903

 

Tangible book value per share

 

$

16.19

 

 

$

15.36

 

 

$

15.76

 

 

$

16.23

 

 

$

17.51

 

 

$

16.19

 

 

$

17.51

 

 

 

Slide 1

Byline Bancorp, Inc. 4Q22 Earnings Presentation January 26, 2022 Exhibit 99.2

Slide 2

2 Forward-Looking Statements 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. Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. Current Expected Credit Loss (“CECL”) Adoption In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13 Financial Instruments - Credit Losses (Topic 326) on the recognition of credit losses, otherwise known as the current expected credit loss standard, or "CECL", which replaces the incurred loss impairment methodology with a methodology that reflects current expected credit losses. As an emerging growth company, we elected to delay the adoption of the standard in accordance with ASU No. 2019-10, Effective Dates, which delayed the effective date of the ASU for entities not classified as Public Business Entities. The Company’s EGC status expired during 2022, requiring CECL adoption be reflected in our December 31, 2022 financial statements and Form 10-K. The Company adopted CECL on December 31, 2022, and has applied it retroactively to the period beginning January 1, 2022 using the modified retrospective method of accounting. Adoption of CECL includes both a $10.1 million retroactive equity adjustment to January 1, 2022 (Day 1) and a $1.7 million fourth quarter adjustment to earnings (net of tax) to account for the difference in provision for credit losses between CECL and the incurred loss methodology for the first three quarters of 2022. Results for reporting periods beginning after September 30, 2022 are presented under the new standard, while prior quarters previously reported are "Recast" as if the new standard had been applied since January 1, 2022. Refer to Appendix A in the Fourth Quarter 2022 Earnings Release for recast prior quarter financial information as a result of the adoption of the new standard. Ongoing impacts of the CECL methodology will be dependent upon changes in economic conditions and forecasts, originated and acquired loan portfolio composition, credit performance trends, portfolio duration, and other factors.

Slide 3

Full Year 2022 Summary Performance Highlights Reported net income of $88.0 million, or EPS of $2.34, on revenue of $322.6 million Solid PTPP ROA of 1.97%, ROA of 1.25%, ROTCE of 15.15% Delivered full year diversified loan growth of 19%, funded by high quality deposit base which grew 10% YoY Maintained strong capital ratios with CET1 at 10.20% and TCE/TA(1) at 8.42% Credit quality remained stable with NCOs of 0.23%, down 14 bps Y/Y Exited emerging growth company status and adopted the Current Expected Credit Loss (“CECL”) accounting standard Revenue EPS Efficiency ratio Total Assets Total Loans and Leases Total Deposits 4% Y/Y $322.6 million 3% Y/Y $2.34 Improved 228 bps Y/Y 54.99% $7.4 billion $5.4 billion $5.7 billion 3 10% Y/Y 10% Y/Y 19% Y/Y Represents a non-GAAP financial measure. See “Non-GAAP Reconciliation” in the appendix.

Slide 4

Credit quality remained stable with: NPA/Assets of 0.55%, down 9 bps QoQ NPLs (ex. gov gtd) decreased 14 bps to 0.62% in 4Q22 NCOs of 0.23%, up 9 bps QoQ ACL as percent of loans and leases of 1.51%, flat QoQ ROAA & ROTCE(1) PTPP Net Income & EPS Fourth Quarter 2022 Highlights $0.65 per diluted share $24.4 million 17.21% ROTCE 1.33% ROAA 2.05% PTPP ROA $37.6 million Profitability Credit Quality Capital Grew Pre-Tax Pre-Provision Net Income 8.4% QoQ to $37.6 million, driven by higher net interest income Solid broad-based total loan growth of 12.0% annualized Net interest margin (FTE)(1) expanded 36 bps to 4.40% Earning assets yields increased 70 bps to 5.39% driven by: Loan yields expanding 79 bps Deposit costs increased 30 bps CET1 and Total Capital ratios remained solid at 10.20% and 13.00% TCE/TA(1): 8.42% Returned $30.8 million capital to common stockholders through dividends and share repurchases in 2022 Repurchased 689,068 shares of common stock during 2022 at a cost of $17.3 million Authorization of a new 1.25 million share repurchase program 4 Represents a non-GAAP financial measure. See “Non-GAAP Reconciliation” in the appendix.

Slide 5

Pre-Tax Pre-Provision Net Income ($ in millions) Quarterly Pre-Tax Pre-Provision Net Income and ROAA(1) 5 Annual Pre-Tax Pre-Provision Net Income and ROAA(1) Represents a non-GAAP financial measure. See “Non-GAAP Reconciliation” in the appendix. As we are investing in people and technology with the goal of improving growth and efficiency… …our strategy is producing record PTPP; driving sustained profitability and delivering positive operating leverage

Slide 6

Loan and Lease Trends ($ in millions) Excludes PPP Loans. Total Loans & Leases and Average Yield Portfolio Composition Repricing Mix Originations and Payoffs(1) Total loans and leases were $5.5 billion at 4Q22, an increase of $160.0 million, or 12.0% annualized Originated $269.0 million in new loans, net of loan sales in 4Q22 compared to $303.2 million in 3Q22 Production driven by commercial of $105.0 million and lease originations of $74.4 million Payoff(1) activity decreased by $42.0 million from 3Q22 Net commitments increased $59.8 million from 3Q22 Line usage of 55.8% in 4Q22, flat from 3Q22 Highlights 6 Total Loans and Leases % change QoQ YoY 3.0% 18.8%

Slide 7

(1) $ Balance % of Portfolio Unguaranteed $379.4 7.0% Guaranteed 99.5 1.8% Total SBA 7(a) Loans $478.9 8.8% Unguaranteed $41.4 0.8% Guaranteed 21.6 0.4% Total USDA Loans $63.1 1.2% Unguaranteed Loan Portfolio by Industry A leading SBA 7(a) lender for Government Fiscal Year 2022 #5 SBA 7(a) lender in the United States Closed $120.9 million loan commitments in 4Q22 SBA 7(a) portfolio $478.9 million, down $2.6 million from 3Q22 ACL/Unguaranteed loan balance ~ 8.9% Servicing $1.7 billion in government guaranteed loans for investors Government-Guaranteed Lending ($ in millions) On Balance Sheet SBA 7(a) & USDA Loans Total SBC Closed Loan Commitments Highlights Represents sectors with less than 5% of the total portfolio. 7

Slide 8

Cost of Interest Bearing Deposits Total deposits were $5.7 billion, up 5.8% annualized from 3Q22 Non-interest-bearing deposits flat QoQ Strong inflows of time deposits, primarily due to promotional campaigns Maintained a solid deposit mix with non-interest bearing DDAs representing 37.6% of total deposits Commercial deposits accounted for 48.5% of total deposits and represent 77.5% of all non-interest bearing deposits Cumulative total deposit beta remains low at ~15% Deposit Trends ($ in millions) Deposit Composition Highlights Average Non-Interest Bearing Deposits Deposit Beta(1) Interest-Bearing Deposits: 25% Total Deposits: 15% 8 Beta calculation is based on change in deposit cost divided by change in Fed Funds from 4Q21 to 4Q22. Total Deposits % change QoQ YoY 1.5% 10.5%

Slide 9

Net interest income was $76.6 million, up 11.6% from 3Q22 Net interest margin increased 36 basis points from 3Q22 to 4.39% Asset sensitive profile supported QoQ margin expansion Loan and lease yield of 6.31%, up 79 basis points from 3Q22 Interest Rate Sensitivity Interest rate risk position slightly less asset sensitive +$5 million in net interest income per 25 bps in Fed tightening SBA asset repricing lag – Q4 rate increases effective in Q1 NIM Bridge Net Interest Income and Net Interest Margin Trends Net Interest Income Highlights NIM, Yields, and Costs 9 Net Interest Income % change QoQ YoY 11.6% 24.1%

Slide 10

Government Guaranteed Loan Sales $86.0 million of guaranteed loans sold in 4Q22, compared to $75.4 million in 3Q22 Loans held for sale increased to $47.8 million in 4Q22 from $34.0 million in 3Q22 Non-interest income was $11.5 million, a decrease of $0.6 million from 3Q22 $3.5 million loan servicing asset revaluation charge due to higher discount rates Lower premiums resulting in a decrease in net gains on sales of loans Volume Sold and Average Net Premiums Non-Interest Income Trends ($ in millions) Total Non-Interest Income Highlights Net Gains on Sales of Loans 10

Slide 11

(1) Non-interest expenses increased to $50.5 million from $46.0 million in 3Q22, primarily attributable to: $2.2 million in higher salaries and employee benefits mainly due to increased incentive compensation expense $1.2 million increase in other non-interest expense, which includes a disposition in leasehold improvements Increase in loan and leases related expenses, mainly due to higher expenses associated with originations of government guaranteed loans Increase in legal, audit and other professional fees related to acquisition activities Efficiency ratio stood at 55.53% at 4Q22 Achieved positive operating leverage for FY22 despite inflationary environment Investing in the future while maintaining Expense Discipline Non-Interest Expense Trends ($ in millions) Non-Interest Expense Highlights Efficiency Ratio 11 Represents a non-GAAP financial measure. See “Non-GAAP Reconciliation” in the appendix. Balancing continuous improvements and investing for growth Balancing physical branch presence with digital offerings Prudent and disciplined expense management to drive full-year positive operating leverage while investing for the future

Slide 12

Note: Delinquencies represent accruing loans and leases past due 30 days or more. Delinquencies to Total Loans and Leases represent delinquencies divided by period end loans and leases. Strong asset quality continues to reflect Byline’s prudent risk culture and diverse loan and lease portfolio Non-performing assets to total assets declined to 0.55% in 4Q22 from 0.64% in 3Q22 NPLs / total loans and leases decreased 13 bps to 0.66% in 4Q22 from 0.80% in 3Q22 NCOs / average loans and leases were 23 bps in 4Q22 Delinquencies Asset Quality Trends ($ in millions) Net Charge-offs Highlights NPLs / Total Loans & Leases 12 NCO Ratio bps change QoQ YoY 9 bps -14 bps

Slide 13

CECL Adoption ($ in thousands) 13 Excludes unfunded commitments. In addition to the cumulative adjustment to retained for loans and leases, there was also an adjustment for unfunded commitments of $1,179. CECL Adoption Change ACL - Loans and Leases Overall CECL Impact On December 31, 2022, the Company adopted Current Expected Credit Loss (CECL) Day 1 impacts: $12.2 million increase in reserves, reflecting a $3.1 million allocation to PCI loans transitioning to PCD. $1.6 million increase in reserves for unfunded commitments No Allowance for Credit Losses was allocated to Securities Held to Maturity Provision for credit losses on loans for Q4 was $5.4 million, driven by additional allocations for economic uncertainty related to the impact of higher interest rates on borrowers' debt service. The average quarterly unemployment rate used in Company's reasonable and supportable forecast increased by 12 basis points from prior period Provision for credit losses on unfunded commitments for Q4 was $426,000 resulting primarily from a higher unfunded balances on C&I loans The Company has opted into the regulators' joint CECL transition provision, which allows the Company to phase in the negative adjustment over three years beginning 1/1/2022 Impact of Adoption(1) January 1, 2022 Increase to allowance for originated loans $ 10,498 Decrease to allowance for PCD loans (38) Increase to allowance for acquired non-impaired loans 1,708 Income tax effect (3,250) Decrease to retained earning upon adoption(2) $ 8,918

Slide 14

CECL Adoption ($ in thousands) 14 CECL Adoption - Allocation by Loan Classification For Year Ended 2022 Commercial Real Estate Residential Real Estate Construction, Land Development and Other Commercial and Industrial Installment and Other Lease Financing Receivables Total Beginning balance $ 16,918 $ 1,628 $ 522 $ 33,129 $ 9 $ 2,806 $ 55,012 Impact of CECL Adoption 6,367 1,047 1,191 1,253 9 2,301 12,168 Provision (recapture) for credit losses(1) 5,252 907 1,476 12,002 (9) 3,046 22,674 Charge-offs (3,837) (1,208) (94) (5,377) (7) (1,472) (11,995) Recoveries 1,361 766 39 882 22 995 4,065 Ending balance $ 26,061 $ 3,140 $ 3,134 $ 41,889 $ 24 $ 7,676 $ 81,924 Allowance for Credit Losses for the Year ended December 31, 2022 Excludes unfunded commitments. ACL-to-Gross Loans – CECL vs. Incurred Loss ACL-to-Gross Loans by Loan Type 12/31/2021 Day 1 1/1/2022 12/31/2022 Commercial Real Estate 1.02% 1.40% 1.36% Residential Real Estate 0.34% 0.56% 0.64% Construction, Land Development and Other Land 0.16% 0.53% 0.71% Commercial and Industrial 1.94% 2.02% 2.04% Installment and Other 0.66% 1.32% 1.36% Lease Financing Receivables 0.78% 1.42% 1.46% Total 1.21% 1.48% 1.51%

Slide 15

The Company did not repurchase any shares during 4Q22 Declared common stock dividend of $0.09 per share in 4Q22 Dividend Yield: 1.59% FY22 Dividend payout ratio: 15.38% Continued focus on disciplined capital allocation and risk-adjusted returns (2) (1) $1.9 billion of available on balance sheet liquidity Cash and cash equivalents of $179.4 million Loans/Deposits essentially flat at 96.0% QoQ $1.4 billion investment portfolio (~99.7% AFS); duration: 5.5 years AOCI / TCE(1): ~19.4% $550 million of balance sheet hedges to protect market value risk Strong TCE/TA(1): 8.42% Capital Returns to Stockholders Strong Liquidity and Capital Position Capital Ratios Highlights Common Equity Tier 1 TCE excluding AOCI / TA(1): 9.90% Total Payout (Dividend & Share Rep.) 35.1% YTD 15 As reported prior to CECL adoption. Represents a non-GAAP financial measure. See “Non-GAAP Reconciliation” in the appendix. Return on Average Tangible Common Equity

Slide 16

2023 Strategic Priorities and Near-Term Outlook Commercial banking strategy focused on organic loan and deposit growth Investing in digital capabilities and automation Opportunistic M&A and talent additions Maintain a strong balance sheet and capital flexibility Disciplined loan and deposit pricing Maintain credit discipline and strong asset quality 16

Slide 17

4Q22 Earnings Presentation Appendix

Slide 18

Five Quarter Financial Summary 18 Represents a non-GAAP financial measure. See “Non-GAAP Reconciliation” in the appendix. As of or For the Three Months Ended Recast Recast Recast December 31, September 30, June 30, March 31, December 31, (dollars in thousands, except per share data) 2022 2022 2022 2022 2021 Income Statement Net interest income $ 76,604 $ 68,635 $ 61,760 $ 58,331 $ 61,728 Provision (recapture) for credit losses 5,826 7,208 4,286 6,559 (1,293) Non-interest income 11,455 12,043 14,273 19,543 19,014 Non-interest expense 50,500 46,041 43,585 43,956 58,968 Income before provision for income taxes 31,733 27,429 28,162 27,359 23,067 Provision for income taxes 7,366 7,020 6,382 5,961 5,878 Net income   24,367   20,409   21,780   21,398   17,189 Dividends on preferred shares — — — 196 196 Net income available to common stockholders   $ 24,367   $ 20,409   $ 21,780   $ 21,202   $ 16,993 Diluted earnings per common share(1)   $ 0.65   $ 0.55   $ 0.58   $ 0.56   $ 0.45 Balance Sheet Total loans and leases $ 5,421,258 $ 5,275,126 $ 5,167,716 $ 4,787,607 $ 4,537,128 Total deposits 5,695,121 5,612,456 5,388,377 5,530,102 5,155,047 Tangible common equity(1) 606,929 575,321 593,555 613,698 660,386 Balance Sheet Metrics Loans and leases / total deposits 96.03% 94.59% 96.23% 87.29% 89.26% Tangible common equity / tangible assets(1) 8.42% 8.25% 8.65% 9.36% 10.11% Key Performance Ratios Net interest margin 4.39% 4.03% 3.77% 3.78% 3.96% Efficiency ratio 55.53% 55.07% 54.87% 54.40% 71.03% Adjusted efficiency ratio(1) 54.50% 55.07% 54.87% 54.40% 55.61% Non-interest expense to average assets 2.76% 2.56% 2.51% 2.66% 3.49% Non-interest income to total revenues 13.01% 14.93% 18.77% 25.09% 23.55% Return on average assets 1.33% 1.13% 1.25% 1.30% 1.02% Adjusted return on average assets(1) 1.37% 1.13% 1.25% 1.30% 1.56% Pre-tax pre-provision return on average assets (1) 2.05% 1.93% 1.87% 2.05% 1.28% Dividend payout ratio on common stock 13.85% 14.75% 16.67% 15.52% 20.00% Tangible book value per common share(1) $ 16.19 $ 15.67 $ 16.01 $ 16.52 $ 17.51

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Non-GAAP Reconciliation 19 As of or For the Three Months Ended Recast Recast Recast   (dollars in thousands, except per share data) December 31, 2022 September30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 Net income and earnings per share excluding significant items Reported Net Income $ 24,367 $ 20,409 $ 21,780 $ 21,398 $ 17,189 Significant items: Impairment charges on assets held for sale and ROU asset 372 — — — 12,449 Merger-related expenses 538 — — — — Tax benefit (118) — — — (3,377) Adjusted Net Income   $ 25,159   $ 20,409   $ 21,780   $ 21,398   $ 26,261 Reported Diluted Earnings per Share $ 0.65 $ 0.55 $ 0.58 $ 0.56 $ 0.45 Significant items: Impairment charges on assets held for sale and ROU asset 0.01 — — — 0.33 Merger-related expenses 0.01 — — — — Tax benefit — — — — (0.09) Adjusted Diluted Earnings per Share   $ 0.67   $ 0.55   $ 0.58   $ 0.56   $ 0.69

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Non-GAAP Reconciliation (continued) 20 As of or For the Three Months Ended Recast Recast Recast   (dollars in thousands) December 31, 2022 September30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 Adjusted non-interest expense: Non-interest expense $ 50,500 $ 46,041 $ 43,585 $ 43,956 $ 59,090 Less: Significant items Impairment charges on assets held for sale and ROU asset 372 — — — 12,449 Merger-related expenses 538 — — — — Adjusted non-interest expense   $ 49,590   $ 46,041   $ 43,585   $ 43,956   $ 46,641 Adjusted non-interest expense ex. amortization of intangible assets: Adjusted non-interest expense $ 49,590 $ 46,041 $ 43,585 $ 43,956 $ 46,641 Less: Amortization of intangible assets 1,596 1,611 1,868 1,596 1,738 Adjusted non-interest expense ex. amortization of intangible assets   $ 47,994   $ 44,430   $ 41,717   $ 42,360   $ 44,903 Pre-tax pre-provision net income: Pre-tax income $ 31,733 $ 27,429 $ 28,162 $ 27,359 $ 23,067 Add: Provision for loan and lease losses 5,826 7,208 4,286 6,559 (1,415) Pre-tax pre-provision net income   $ 37,559   $ 34,637   $ 32,448   $ 33,918   $ 21,652 Adjusted pre-tax pre-provision net income: Pre-tax pre-provision net income $ 37,559 $ 34,637 $ 32,448 $ 33,918 $ 21,652 Add: Impairment charges on assets held for sale and ROU asset 372 — — — 12,449 Add: Merger-related expenses 538 — — — — Adjusted pre-tax pre-provision net income   $ 38,469   $ 34,637   $ 32,448   $ 33,918   $ 34,101 Tax Equivalent Net Interest Income Net interest income $ 76,604 $ 68,635 $ 61,760 $ 58,331 $ 61,728 Add: Tax-equivalent adjustment 214 228 236 236 256 Net interest income, fully taxable equivalent   $ 76,818   $ 68,863   $ 61,996   $ 58,567   $ 61,984 Total revenues: Net interest income $ 76,604 $ 68,635 $ 61,760 $ 58,331 $ 61,728 Add: Non-interest income 11,455 12,043 14,273 19,543 19,014 Total revenues   $ 88,059   $ 80,678   $ 76,033   $ 77,874   $ 80,742

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Non-GAAP Reconciliation (continued) 21 As of or For the Three Months Ended   Recast Recast Recast (dollars in thousands) December 31, 2022 September30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 Tangible common stockholders' equity: Total stockholders' equity $ 765,816 $ 735,805 $ 755,649 $ 777,660 $ 836,382 Less: Preferred stock — — — — 10,438 Less: Goodwill and other intangibles 158,887 160,484 162,094 163,962 165,558 Tangible common stockholders' equity   $ 606,929   $ 575,321   $ 593,555   $ 613,698   $ 660,386 Tangible assets: Total assets $ 7,362,941 $ 7,267,277 $ 7,124,030 $ 6,825,458 $ 6,696,172 Less: Goodwill and other intangibles 158,887 160,484 162,094 163,962 165,558 Tangible assets   $ 7,204,054   $ 7,106,793   $ 6,961,936   $ 6,661,496   $ 6,530,614 Tangible assets, excluding accumulated other comprehensive loss: Tangible assets $ 7,204,054 $ 7,106,793 $ 6,961,936 $ 6,661,496 $ 6,530,614 Less: Accumulated other comprehensive loss (117,550) (124,898) (91,262) (56,388) (8,302) Tangible assets, excluding accumulated other comprehensive loss:   $ 7,321,604   $ 7,231,691   $ 7,053,198   $ 6,717,884   $ 6,538,916 Tangible common stockholders' equity, excluding accumulated other comprehensive loss Tangible common stockholders' equity $ 606,929 $ 575,321 $ 593,555 $ 613,698 $ 660,386 Less: Accumulated other comprehensive loss (117,550) (124,898) (91,262) (56,388) (8,302) Tangible common stockholders' equity, excluding accumulated other comprehensive loss   $ 724,479   $ 700,219   $ 684,817   $ 670,086   $ 668,688 Average tangible common stockholders' equity: Average total stockholders' equity $ 748,292 $ 765,821 $ 769,658 $ 822,053 $ 838,975 Less: Average preferred stock — — 9,974 10,438 Less: Average goodwill and other intangibles 159,680 161,292 163,068 164,837 166,396 Average tangible common stockholders' equity   $ 588,612   $ 604,529   $ 606,590   $ 647,242   $ 662,141 Average tangible assets: Average total assets $ 7,266,053 $ 7,137,472 $ 6,966,564 $ 6,697,476 $ 6,699,069 Less: Average goodwill and other intangibles 159,680 161,292 163,068 164,837 166,396 Average tangible assets   $ 7,106,373   $ 6,976,180   $ 6,803,496   $ 6,532,639   $ 6,532,673 Tangible net income available to common stockholders: Net income available to common stockholders $ 24,367 $ 20,409 $ 21,780 $ 21,202 $ 16,993 Add: After-tax intangible asset amortization 1,170 1,181 1,369 1,170 1,266 Tangible net income available to common stockholders   $ 25,537   $ 21,590   $ 23,149   $ 22,372   $ 18,259 Adjusted tangible net income available to common stockholders: Tangible net income available to common stockholders $ 25,537 $ 21,590 $ 23,149 $ 22,372 $ 18,259 Impairment charges on assets held for sale and ROU asset 372 — — — 12,449 Merger-related expenses 538 — — — — Tax benefit on significant items (118) — — — (3,377) Adjusted tangible net income available to common stockholders   $ 26,329   $ 21,590   $ 23,149   $ 22,372   $ 27,331

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Non-GAAP Reconciliation (continued) 22 As of or For the Three Months Ended   Recast Recast Recast (dollars in thousands, except share and per share data, ratios annualized, where applicable) December 31, 2022 September30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 Pre-tax pre-provision return on average assets: Pre-tax pre-provision net income $ 37,559 $ 34,637 $ 32,448 $ 33,918 $ 21,652 Average total assets 7,266,053 7,137,472 6,966,564 6,697,476 6,699,069 Pre-tax pre-provision return on average assets   2.05%   1.93%   1.87%   2.05%   1.28% Adjusted pre-tax pre-provision return on average assets: Adjusted pre-tax pre-provision net income $ 38,469 $ 34,637 $ 32,448 $ 33,918 $ 34,101 Average total assets 7,266,053 7,137,472 6,966,564 6,697,476 6,699,069 Adjusted pre-tax pre-provision return on average assets   2.10%   1.93%   1.87%   2.05%   2.03% Net interest margin, fully taxable equivalent Net interest income, fully taxable equivalent $ 76,818 $ 68,863 $ 61,996 $ 58,567 $ 61,984 Total average interest-earning assets 6,922,890 6,763,916 6,572,416 6,252,866 6,189,762 Net interest margin, fully taxable equivalent   4.40%   4.04%   3.78%   3.80%   3.97% Non-interest income to total revenues: Non-interest income $ 11,455 $ 12,043 $ 14,273 $ 19,543 $ 19,014 Total revenues 88,059 80,678 76,033 77,874 80,742 Non-interest income to total revenues   13.01%   14.93%   18.77%   25.09%   23.55% Adjusted non-interest expense to average assets: Adjusted non-interest expense $ 49,590 $ 46,041 $ 43,585 $ 43,956 $ 46,641 Average total assets 7,266,053 7,137,472 6,966,564 6,697,476 6,699,069 Adjusted non-interest expense to average assets   2.71%   2.56%   2.51%   2.66%   2.76% Adjusted efficiency ratio: Adjusted non-interest expense excluding amortization of intangible assets $ 47,994 $ 44,430 $ 41,717 $ 42,360 $ 44,903 Total revenues 88,059 80,678 76,033 77,874 80,742 Adjusted efficiency ratio   54.50%   55.07%   54.87%   54.40%   55.61% Adjusted return on average assets: Adjusted net income $ 25,159 $ 20,409 $ 21,780 $ 21,398 $ 26,261 Average total assets 7,266,053 7,137,472 6,966,564 6,697,476 6,699,069 Adjusted return on average assets   1.37%   1.13%   1.25%   1.30%   1.56% Adjusted return on average stockholders' equity: Adjusted net income $ 25,159 $ 20,409 $ 21,780 $ 21,398 $ 26,261 Average stockholders' equity 748,292 765,821 769,658 822,053 838,975 Adjusted return on average stockholders' equity 13.34% 10.57% 11.35% 10.56% 12.42%

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Non-GAAP Reconciliation (continued) 23 As of or For the Three Months Ended   Recast Recast Recast   December 31, 2022 September30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 Tangible common equity to tangible assets: Tangible common equity $ 606,929 $ 575,321 $ 593,555 $ 613,698 $ 660,386 Tangible assets 7,204,054 7,106,793 6,961,936 6,661,496 6,530,614 Tangible common equity to tangible assets   8.42%   8.25%   8.65%   9.36%   10.11% Tangible common stockholders' equity, excluding accumulated other comprehensive loss to tangible assets, excluding accumulated other comprehensive loss Tangible common stockholders' equity, excluding accumulated other comprehensive loss $ 724,479 $ 700,219 $ 684,817 $ 670,086 $ 668,688 Tangible assets, excluding accumulated other comprehensive loss: 7,321,604 7,231,691 7,053,198 6,717,884 6,538,916 Tangible common stockholders' equity, excluding accumulated other comprehensive loss to tangible assets, excluding accumulated other comprehensive loss   9.90%   9.68%   9.71%   9.97%   10.23% Return on average tangible common stockholders' equity: Tangible net income available to common stockholders $ 25,537 $ 21,590 $ 23,149 $ 22,372 $ 18,259 Average tangible common stockholders' equity 588,612 604,529 606,590 647,242 662,141 Return on average tangible common stockholders' equity   17.21%   14.17%   15.31%   14.02%   10.94% Adjusted return on average tangible common stockholders' equity: Adjusted tangible net income available to common stockholders $ 26,329 $ 21,590 $ 23,149 $ 22,372 $ 27,331 Average tangible common stockholders' equity 588,612 604,529 606,590 647,242 662,141 Adjusted return on average tangible common stockholders' equity   17.75%   14.17%   15.31%   14.02%   16.38% Tangible book value per share: Tangible common equity $ 606,929 $ 575,321 $ 593,555 $ 613,698 $ 660,386 Common shares outstanding 37,492,775 37,465,902 37,669,102 37,811,582 37,713,903 Tangible book value per share   $ 16.19   $ 15.67   $ 16.01   $ 16.52   $ 17.51 Accumulated other comprehensive loss to tangible common equity: Accumulated other comprehensive loss $ 117,550 $ 124,898 $ 91,262 $ 56,388 $ 8,302 Tangible common equity 606,929 575,321 593,555 613,698 660,386 Accumulated other comprehensive loss to tangible common equity   19.4%   21.7%   15.4%   9.2%   1.3%

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