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

Rhea-AI Summary

Byline Bancorp reported a fourth quarter 2022 net income of $24.4 million ($0.65 per diluted share), up from $20.4 million ($0.55 per diluted share) in Q3 2022 and $17.2 million ($0.45 per diluted share) in Q4 2021. Total loans and leases increased by $160 million, while total deposits rose by $82.7 million to $5.7 billion. The net interest margin improved to 4.39%, up 36 basis points from the prior quarter. Full year 2022 net income reached $88 million ($2.34 per diluted share). The company declared a $0.09 cash dividend per share on January 24, 2023:

- Cash dividend payable February 21, 2023.

Positive

• Q4 2022 net income of $24.4 million, up 19.6% from Q3 2022.
• Total loans and leases increased by $160 million.
• Total deposits rose by $82.7 million to $5.7 billion.
• Improved net interest margin to 4.39%, up 36 bps from Q3 2022.
• Full year 2022 net income of $88 million, representing strong annual performance.

Negative

• Non-interest income decreased by 4.9% to $11.5 million in Q4 2022.
• Increased provision for credit losses by $5.8 million in Q4 2022.
• Non-performing loans at $36 million, a decrease during the quarter but still significant.

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

(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.

CHICAGO--(BUSINESS WIRE)-- 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.”

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.

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.

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.

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.

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.

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

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

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.

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 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.

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. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
		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
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. AND SUBSIDIARIES SELECTED FINANCIAL DATA (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	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	%
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. 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. 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. 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. AND SUBSIDIARIES 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 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:
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. AND SUBSIDIARIES 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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230126005915/en/

Investors:

Brooks Rennie

Investor Relations Director

312-660-5805

brennie@bylinebank.com

Media:

Erin O’Neill

Marketing Director

773-475-2901

eoneill@bylinebank.com

Source: Byline Bancorp, Inc.

FAQ

What were Byline Bancorp's Q4 2022 earnings?

Byline Bancorp reported Q4 2022 earnings of $24.4 million, or $0.65 per diluted share.

How much did Byline Bancorp's total deposits increase in Q4 2022?

Total deposits increased by $82.7 million to $5.7 billion in Q4 2022.

What is the net interest margin for Byline Bancorp in Q4 2022?

The net interest margin for Q4 2022 improved to 4.39%.

What dividend did Byline Bancorp declare in January 2023?

Byline Bancorp declared a cash dividend of $0.09 per share, payable on February 21, 2023.

How did Byline Bancorp perform in comparison to Q4 2021?

In Q4 2022, Byline Bancorp's net income increased significantly compared to $17.2 million in Q4 2021.