Byline Bancorp, Inc. Reports Full Year and Fourth Quarter 2021 Financial Results

Rhea-AI Summary

Byline Bancorp reported a net income of $17.2 million, or $0.45 per diluted share, for Q4 2021, down from $25.3 million in Q3. Full-year net income was $92.8 million, representing $2.40 per diluted share. Total revenue for Q4 reached $80.7 million, with a net interest margin of 3.96%. The bank originated loans and leases increased by $425.9 million (11.6%) in 2021. Furthermore, Byline returned $40.3 million in capital to shareholders through dividends and repurchases. Plans include consolidating six branches in Q2 2022, with anticipated annualized cost savings of $5.3 million.

Positive

• Net income for Q4 2021 was $17.2 million, or $0.45 per diluted share.
• Total revenue for Q4 was $80.7 million, including $61.7 million net interest income.
• Full year net income reached $92.8 million, or $2.40 per diluted share.
• Originated loans and leases increased by $425.9 million (11.6%) in 2021.
• Non-interest-bearing deposits rose by $395.7 million (22.5%).
• Consolidation of six branches expected to save approximately $5.3 million annually.

Negative

• Net income decreased from $25.3 million in Q3 to $17.2 million in Q4 2021.
• Non-interest expense increased by $14.8 million (33.5%) in Q4 compared to Q3.
• Net charge-offs for Q4 were $4.3 million, a significant increase from Q3.

Select Full Year 2021 Financial Highlights

• Net income of $92.8 million, or $2.40 per diluted share
• Net interest margin of 3.84%
• Return on average assets of 1.40%
• Efficiency ratio of 57.27%
• Originated loans and leases increased $425.9 million, or 11.6%
• Non-interest-bearing deposits increased $395.7 million, or 22.5%
• Top SBA lender for Illinois and Wisconsin for the eighth consecutive year
• Returned $40.3 million capital to common stockholders through dividends and share repurchases

Select Fourth Quarter 2021 Financial Highlights

• Net income of $17.2 million, or $0.45 per diluted share
• Total revenue¹ of $80.7 million, including $61.7 million net interest income and $19.0 million non-interest income
• Net interest margin of 3.96%
• Return on average assets of 1.02%, as adjusted¹ 1.56%
• Total loan and lease production of $313.7 million
• Common Equity Tier 1 to risk weighted assets of 11.39%

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 $17.2 million, or $0.45 per diluted share, for the fourth quarter of 2021, compared with net income of $25.3 million, or $0.66 per diluted share, for the third quarter of 2021, and net income of $12.3 million, or $0.31 per diluted share, for the fourth quarter 2020. Adjusted net income¹ was $26.3 million, or $0.69 per adjusted diluted share, for the fourth quarter of 2021, compared with $26.4 million, or $0.69 per adjusted diluted share¹, for the third quarter of 2021, and $15.2 million, or $0.38 per adjusted diluted share, for the fourth quarter of 2020.

Roberto R. Herencia, Executive Chairman and Chief Executive Officer of Byline Bancorp, commented, “A lot has changed in the last year, and our fourth quarter and full year results highlight the value of our diversified business model, which allowed us to deliver strong results for our shareholders. This was an extraordinary year for the Byline franchise that brought both challenges and opportunities. I’m proud of how we came together to support our customers and communities while consistently executing on our strategic plan to drive organic loan and deposit growth resulting in a higher level of profitability. As we look ahead, I’m confident in our ability to create shareholder value as we continue to invest in talent and technology to drive revenue growth and efficiency improvement. We remain well positioned to support our continued growth and I want to thank all our employees for being flexible, for being resilient, and for bringing our core values to life for the benefit of our customers every day.”

Alberto J. Paracchini, President of Byline Bancorp, added, “We ended 2021 on a good note as our fourth quarter results were supported by continued strong inflows of commercial non-interest bearing deposits and annualized loan and lease growth of 6.6%, excluding PPP loans. During the quarter we announced the consolidation of six branch locations and the disposition of real estate in efforts to adapt to changes in customer behavior and improve operating efficiencies. During 2021, we returned $40.3 million of capital to shareholders through common dividends and share repurchases. As we moved through the year, we saw a favorable shift in our mix of earning assets and produced record earnings for the company. As we enter this new year in a strong position, we believe we continue to have a healthy loan pipeline and our focus remains on supporting new and existing customers, executing our strategy, and growing the value of our franchise.”

Board Approves Redemption of Series B Preferred Stock

On January 25, 2022, the Company's Board of Directors approved the redemption of all of the outstanding shares of the Company’s 7.50% fixed-to-floating, noncumulative perpetual preferred stock, Series B ("Series B Preferred Stock"), on March 31, 2022. The Company currently has 10,438 shares of Series B Preferred Stock, with a liquidation of preference of $1,000 per share, plus any declared and unpaid dividends from any prior dividend period.

Board Declares Cash Dividend of $0.09 per Share

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

Consolidation of Six Branches and Disposal of Real Estate

On December 10, 2021 Byline announced plans to continue to optimize its branch network, dispose of a portfolio of owned real estate properties and reduce the amount of office square footage it occupies as part of its efforts to adapt to changes in customer behavior and improve operating efficiencies. Byline Bank plans to consolidate six of its 44 full-service branches during the second quarter of 2022. The Company also plans to dispose of a real estate portfolio that includes former branch locations and other properties and reduce the amount of office square footage it occupies to accommodate current trends in remote working preferences. The impact of the branch consolidations and the strategic real estate reduction is expected to result in total charges of approximately $15.0 million, of which $13.0 million were incurred during the fourth quarter 2021, with the remainder to be incurred during the first half of 2022, and expects to generate approximately $5.3 million in annualized cost savings. We expect to reinvest approximately 70% of the anticipated annualized cost savings into talent and technology that will further enhance our digital banking capabilities.

(1)

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

STATEMENTS OF OPERATIONS

Net Interest Income

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

														December 31, 2021
		Three Months Ended												Change from
		December 31,				September 30,				December 31,				September 30,				December 31,
(dollars in thousands)		2021				2021				2020				2021				2020
INTEREST AND DIVIDEND INCOME
Interest and fees on loans and leases		$	58,570			$	56,291			$	53,441				4.0	%			9.6	%
Interest on securities			5,619				5,534				6,252				1.5	%			(10.1	)%
Other interest and dividend income			495				947				232				(47.8	)%			113.2	%
Total interest and dividend income			64,684				62,772				59,925				3.0	%			7.9	%
INTEREST EXPENSE
Deposits			1,037				986				1,814				5.2	%			(42.8	)%
Other borrowings			330				349				480				(5.8	)%			(31.4	)%
Subordinated notes and debentures			1,589				1,592				1,611				(0.2	)%			(1.4	)%
Total interest expense			2,956				2,927				3,905				1.0	%			(24.3	)%
Net interest income		$	61,728			$	59,845			$	56,020				3.1	%			10.2	%

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
		December 31, 2021												September 30, 2021
(dollars in thousands)		Average Balance(5)				Interest Inc / Exp				Average Yield / Rate				Average Balance(5)				Interest Inc / Exp				Average Yield / Rate
ASSETS
Cash and cash equivalents		$	106,170			$	42				0.16	%		$	40,088			$	19				0.19	%
Loans and leases(1)			4,610,608				58,570				5.04	%			4,539,111				56,291				4.92	%
Taxable securities			1,288,969				5,111				1.57	%			1,309,802				5,472				1.66	%
Tax-exempt securities(2)			184,015				1,217				2.62	%			187,064				1,254				2.66	%
Total interest-earning assets		$	6,189,762			$	64,940				4.16	%		$	6,076,065			$	63,036				4.12	%
Allowance for loan and lease losses			(59,144	)											(61,528	)
All other assets			568,451												546,331
TOTAL ASSETS		$	6,699,069											$	6,560,868
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Interest checking		$	659,841			$	236				0.14	%		$	653,543			$	228				0.14	%
Money market accounts			1,089,398				345				0.13	%			1,031,009				280				0.11	%
Savings			633,469				75				0.05	%			625,037				75				0.05	%
Time deposits			688,154				381				0.22	%			709,805				403				0.23	%
Total interest-bearing deposits			3,070,862				1,037				0.13	%			3,019,394				986				0.13	%
Other borrowings			385,787				330				0.34	%			426,284				349				0.33	%
Subordinated notes and debentures			110,341				1,589				5.71	%			110,195				1,592				5.73	%
Total borrowings			496,128				1,919				1.53	%			536,479				1,941				1.44	%
Total interest-bearing liabilities		$	3,566,990			$	2,956				0.33	%		$	3,555,873			$	2,927				0.33	%
Non-interest-bearing demand deposits			2,222,583												2,106,189
Other liabilities			70,521												75,052
Total stockholders’ equity			838,975												823,754
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	6,699,069											$	6,560,868
Net interest spread(3)											3.83	%											3.79	%
Net interest income, fully taxable equivalent						$	61,984											$	60,109
Net interest margin, fully taxable equivalent(2)(4)											3.97	%											3.92	%
Tax-equivalent adjustment							(256	)			0.01	%							(264	)			0.01	%
Net interest income						$	61,728											$	59,845
Net interest margin(4)											3.96	%											3.91	%
Net loan accretion impact on margin						$	1,450				0.09	%						$	1,638				0.11	%

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

Net interest income for the fourth quarter of 2021 was $61.7 million, an increase of $1.9 million, or 3.1%, from the third quarter of 2021.

The increase in net interest income was primarily due to:

• An increase of $2.3 million in interest income on loans and leases, due to higher balances and yields on loans and leases.

Partially offset by:

• A decrease of $452,000 in other interest and dividend income due to lower dividends on equity investments.

Tax-equivalent net interest margin for the fourth quarter of 2021 was 3.97%, an increase of five basis points compared to the third quarter of 2021. Total net accretion income on acquired loans contributed nine basis points to the net interest margin for the fourth quarter of 2021 compared to 11 basis points for the third quarter of 2021, a decrease of two basis points. PPP loan interest income and net fee income combined contributed $4.5 million to net interest income for the fourth quarter of 2021 compared to $5.4 million for the third quarter of 2021.

The average cost of total deposits was 0.08% for the fourth quarter of 2021, flat compared to the third quarter of 2021. Average non-interest-bearing demand deposits increased $116.4 million, while average money market account deposits increased by $58.4 million. Average non-interest-bearing demand deposits were 42.0% of average total deposits for the fourth quarter of 2021 compared to 41.1% during the third quarter of 2021.

Provision for Loan and Lease Losses

The provision for loan and lease losses was a recapture of $1.3 million for the fourth quarter of 2021, a decrease of $1.6 million compared to a provision of $352,000 for the third quarter of 2021. The recapture of provision during the fourth quarter of 2021 was mainly driven by a decrease in non-performing loans and leases, and changes in qualitative factors due to continuing economic improvement.

Non-interest Income

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

		Three Months Ended												December 31, 2021 Change from
		December 31,				September 30,				December 31,				September 30,				December 31,
(dollars in thousands)		2021				2021				2020				2021				2020
NON-INTEREST INCOME
Fees and service charges on deposits		$	1,955			$	1,867			$	1,740				4.7	%			12.4	%
Loan servicing revenue			3,392				3,344				2,645				1.4	%			28.2	%
Loan servicing asset revaluation			(2,510	)			(2,650	)			(2,298	)			(5.3	)%			9.2	%
ATM and interchange fees			1,219				1,201				1,076				1.6	%			13.3	%
Net realized gains (losses) on securities available-for-sale			(21	)			130				2,889			NM				NM
Change in fair value of equity securities, net			(98	)			(275	)			428				(64.6	)%		NM
Net gains on sales of loans			12,924				12,761				9,449				1.3	%			36.8	%
Wealth management and trust income			764				815				710				(6.4	)%			7.5	%
Other non-interest income			1,389				1,302				1,051				6.7	%			32.1	%
Total non-interest income		$	19,014			$	18,495			$	17,690				2.8	%			7.5	%

Non-interest income for the fourth quarter of 2021 was $19.0 million, an increase of $519,000, or 2.8%, compared to $18.5 million for the third quarter of 2021.

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

• An increase of $178,000 in the fair value of equity securities, net, due to changes in the market value of securities; and
• An increase of $162,000 in net gains on sales of loans due to higher volume of loans sold.

Partially offset by:

• A decrease in net realized losses on securities available-for-sale of $152,000 due to sales of securities.

During the fourth quarter of 2021, we sold $113.9 million of U.S. government guaranteed loans compared to $104.2 million during the third quarter of 2021.

Non-interest Expense

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

		Three Months Ended												December 31, 2021 Change from
		December 31,				September 30,				December 31,				September 30,				December 31,
(dollars in thousands)		2021				2021				2020				2021				2020
NON-INTEREST EXPENSE
Salaries and employee benefits		$	28,850			$	25,978			$	22,559				11.1	%			27.9	%
Occupancy and equipment expense, net			4,995				4,982				6,854				0.3	%			(27.1	)%
Loan and lease related expenses			2,328				1,175				1,324				98.1	%			75.8	%
Legal, audit and other professional fees			2,376				2,710				1,336				(12.4	)%			77.8	%
Data processing			3,070				3,108				2,748				(1.2	)%			11.7	%
Net loss recognized on other real estate owned and other related expenses			26				42				495				(39.1	)%			(94.8	)%
Other intangible assets amortization expense			1,738				1,738				1,892				—				(8.2	)%
Other non-interest expense			15,585				4,447				9,813				250.6	%			58.8	%
Total non-interest expense		$	58,968			$	44,180			$	47,021				33.5	%			25.4	%

Non-interest expense for the fourth quarter of 2021 was $59.0 million, an increase of $14.8 million, or 33.5%, from $44.2 million for the third quarter of 2021.

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

• An increase of $11.1 million in other non-interest expense mainly due to $8.4 million of impairment charges on assets held for sale and $4.1 million on branch consolidation charges; and
• An increase of $2.9 million in salaries and employee benefits mainly related to increases in salary expense of $499,000 with new additional hires, increase of $1.5 million in commissions and incentive expense, and $573,000 related to branch consolidation charges; and
• An increase of $1.2 million in loan and lease related expenses mainly related to higher expenses associated with originations of government guaranteed loans.

Our efficiency ratio was 70.88% for the fourth quarter of 2021 compared to 54.18% for the third quarter of 2021. Excluding asset impairment charges, our adjusted efficiency ratio¹ was 55.46% for the fourth quarter of 2021, compared with 52.35% for the third quarter of 2021.

(1)

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

INCOME TAXES

We recorded income tax expense of $5.9 million during the fourth quarter of 2021, compared to $8.5 million during the third quarter of 2021. The effective tax rate was 25.5% and 25.1% for the fourth quarter and third quarter of 2021, respectively.

STATEMENTS OF FINANCIAL CONDITION

Total assets were $6.7 billion at December 31, 2021, a decrease of $8.3 million compared to $6.7 billion at September 30, 2021.

The current quarter decrease was primarily due to:

• A decrease in net loans and leases of $66.5 million due to PPP forgiveness.

Partially offset by:

• An increase in securities available for sale of $26.9 million due to purchases of securities.

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

		December 31, 2021								September 30, 2021								December 31, 2020
(dollars in thousands)		Amount				% of Total				Amount				% of Total				Amount				% of Total
Originated loans and leases
Commercial real estate		$	1,379,000				30.4	%		$	1,298,454				28.2	%		$	1,017,587				23.5	%
Residential real estate			379,796				8.4	%			387,578				8.4	%			414,220				9.6	%
Construction, land development, and other land			323,886				7.1	%			336,460				7.3	%			226,408				5.2	%
Commercial and industrial			1,534,745				33.8	%			1,480,076				32.1	%			1,276,527				29.4	%
Paycheck Protection Program			123,712				2.7	%			268,081				5.8	%			517,815				11.9	%
Installment and other			940				0.0	%			998				0.0	%			1,267				0.0	%
Leasing financing receivables			352,247				7.8	%			331,149				7.2	%			214,636				4.9	%
Total originated loans and leases		$	4,094,326				90.2	%		$	4,102,796				89.0	%		$	3,668,460				84.5	%
Acquired impaired loans
Commercial real estate		$	72,160				1.6	%		$	84,821				1.8	%		$	108,484				2.5	%
Residential real estate			49,401				1.1	%			61,893				1.3	%			78,840				1.9	%
Construction, land development, and other land			1,312				0.0	%			1,746				0.1	%			4,113				0.1	%
Commercial and industrial			4,014				0.1	%			6,651				0.1	%			10,178				0.2	%
Installment and other			164				0.0	%			169				0.0	%			202				0.0	%
Total acquired impaired loans		$	127,051				2.8	%		$	155,280				3.3	%		$	201,817				4.7	%
Acquired non-impaired loans and leases
Commercial real estate		$	214,588				4.7	%		$	235,103				5.1	%		$	295,599				6.8	%
Residential real estate			51,317				1.1	%			58,283				1.3	%			79,211				1.8	%
Construction, land development, and other land			201				0.1	%			206				0.0	%			212				0.0	%
Commercial and industrial			43,202				1.0	%			49,678				1.1	%			82,195				1.9	%
Installment and other			264				0.0	%			275				0.0	%			536				0.0	%
Leasing financing receivables			6,179				0.1	%			7,607				0.2	%			12,505				0.3	%
Total acquired non-impaired loans and leases		$	315,751				7.0	%		$	351,152				7.7	%		$	470,258				10.8	%
Total loans and leases		$	4,537,128				100.0	%		$	4,609,228				100.0	%		$	4,340,535				100.0	%
Allowance for loan and lease losses			(55,012	)							(60,598	)							(66,347	)
Total loans and leases, net of allowance for loan and lease losses		$	4,482,116							$	4,548,630							$	4,274,188

Paycheck Protection Program

The following table presents the net PPP loans outstanding as of December 31, 2021:

		PPP Loans Outstanding
(dollars in thousands)		First Round				Second Round				Total
Principal outstanding		$	3,637			$	123,547			$	127,184
Unearned processing fee			(46	)			(4,303	)			(4,349	)
Deferred cost			11				866				877
PPP loans, net		$	3,602			$	120,110			$	123,712
Number of loans outstanding			62				710				772
Forgiven			97.1	%			67.5	%			87.0	%
In review or submission process			0.3	%			7.7	%			2.8	%
Not applied for forgiveness			2.6	%			24.8	%			10.2	%

PPP loans decreased by $144.4 million in the fourth quarter of 2021 primarily as a result of forgiveness of PPP loans. Forgiveness for the fourth quarter 2021 was $160.3 million compared to $202.4 million for the third quarter of 2021.

ASSET QUALITY

Non-Performing Assets

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

														December 31, 2021 Change from
(dollars in thousands)		December 31, 2021				September 30, 2021				December 31, 2020				September 30, 2021				December 31, 2020
Non-performing assets:
Non-accrual loans and leases		$	23,130			$	34,465			$	41,103				(32.9	)%			(43.7	)%
Past due loans and leases 90 days or more and still accruing interest			—				—				—			—%				—%
Total non-performing loans and leases		$	23,130			$	34,465			$	41,103				(32.9	)%			(43.7	)%
Other real estate owned			2,112				3,033				6,350				(30.4	)%			(66.7	)%
Total non-performing assets		$	25,242			$	37,498			$	47,453				(32.7	)%			(46.8	)%
Accruing troubled debt restructured loans (1)		$	1,927			$	2,366			$	2,495				(18.5	)%			(22.8	)%
Total non-performing loans and leases as a percentage of total loans and leases			0.51	%			0.75	%			0.95	%
Total non-performing assets as a percentage of total assets			0.38	%			0.56	%			0.74	%
Allowance for loan and lease losses as a percentage of non-performing loans and leases			237.84	%			175.82	%			161.42	%
Non-performing assets guaranteed by U.S. government:
Non-accrual loans guaranteed		$	3,270			$	6,326			$	3,645				(48.3	)%			(10.3	)%
Past due loans 90 days or more and still accruing interest guaranteed			—				—				—			—%				—%
Total non-performing loans guaranteed		$	3,270			$	6,326			$	3,645				(48.3	)%			(10.3	)%
Accruing troubled debt restructured loans guaranteed (1)		$	—			$	—			$	—			—%				—%
Total non-performing loans and leases not guaranteed as a percentage of total loans and leases			0.44	%			0.61	%			0.86	%
Total non-performing assets not guaranteed as a percentage of total assets			0.33	%			0.46	%			0.69	%

(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 $23.1 million at December 31, 2021, a decrease of $11.3 million from $34.5 million at September 30, 2021 primarily due to payoffs and resolutions; and
• Other real estate owned was $2.1 million at December 31, 2021, a decrease of $921,000 from $3.0 million at September 30, 2021 due to sales.

Allowance for Loan and Lease Losses

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

		Three Months Ended
		December 31,				September 30,				December 31,
(dollars in thousands)		2021				2021				2020
Allowance for loan and lease losses, beginning of period		$	60,598			$	61,719			$	61,258
Provision/(recapture) for loan and lease losses			(1,293	)			352				10,236
Net charge-offs of loans and leases			(4,293	)			(1,473	)			(5,147	)
Allowance for loan and lease losses, end of period		$	55,012			$	60,598			$	66,347
Allowance for loan and lease losses to period end total loans and leases held for investment			1.21	%			1.31	%			1.53	%
Net charge-offs (annualized) to average loans and leases outstanding during the period			0.37	%			0.13	%			0.47	%
Provision/(recapture) for loan and lease losses to net charge-offs during the period		(0.30)		x			0.24	x			1.99	x

The allowance for loan and lease losses as a percentage of total loans and leases held for investment decreased to 1.21% at December 31, 2021 compared to 1.31% at September 30, 2021. The allowance for loan and lease losses as a percentage of total loans and leases held for investment excluding PPP loans decreased to 1.25% at December 31, 2021 from 1.40% at September 30, 2021.

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

Net Charge-Offs

Net charge-offs during the fourth quarter of 2021 were $4.3 million, or 0.37% of average loans and leases, on an annualized basis, an increase of $2.8 million compared to $1.5 million, or 0.13% of average loans and leases, during the third quarter of 2021, and a decrease of $854,000 from $5.1 million or 0.47% of average loans and leases from the comparable period a year ago.

Net charge-offs for the fourth quarter of 2021 included $1.5 million in the unguaranteed portion of U.S. government guaranteed loans, while net charge-offs for the third quarter of 2021 and fourth quarter of 2020 included $1.3 million and $5.0 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, 2021 Change from
(dollars in thousands)		December 31, 2021				September 30, 2021				December 31, 2020				September 30, 2021				December 31, 2020
Non-interest-bearing demand deposits		$	2,158,420			$	2,117,749			$	1,762,676				1.9	%			22.5	%
Interest-bearing checking accounts			572,426				652,824				494,424				(12.3	)%			15.8	%
Money market demand accounts			1,106,272				1,057,419				1,142,709				4.6	%			(3.2	)%
Other savings			638,218				627,294				564,700				1.7	%			13.0	%
Time deposits (below $250,000)			532,589				553,364				600,810				(3.8	)%			(11.4	)%
Time deposits ($250,000 and above)			147,122				149,628				186,712				(1.7	)%			(21.2	)%
Total deposits		$	5,155,047			$	5,158,278			$	4,752,031				(0.1	)%			8.5	%

Total deposits remained at $5.2 billion at December 31, 2021 compared to September 30, 2021. Non-interest-bearing deposits were 41.9% and 41.1% of total deposits at December 31, 2021 and September 30, 2021, respectively.

The decrease in the current quarter was primarily due to:

• A decrease in interest bearing checking deposits of $80.4 million primarily due to decreases in public funds deposits.

Partially offset by:

• An increase in non-interest-bearing deposits of $40.7 million, due to increases in consumer deposits; and
• An increase in money market demand accounts of $48.9 million, principally driven by business accounts.

Total borrowings and other liabilities were $704.7 million at December 31, 2021, a decrease of $17.1 million from $721.8 million at September 30, 2021, primarily driven by the repayment of the Paycheck Protection Program Liquidity Facility of $156.4 million, offset by increases in Federal Home Loan Bank advances of $135.0 million.

Stockholders’ Equity

Total stockholders’ equity was $836.4 million at December 31, 2021, an increase of $12.0 million from $824.4 million at September 30, 2021. The increase was primarily due to an increase in retained earnings, offset by a decrease in the fair value of available-for-sale securities.

Under its stock repurchase program, the Company repurchased an aggregate 1,331,708 shares at an average price of $21.68 during 2021. The Company did not repurchase any shares during the fourth quarter.

The following table presents actual regulatory capital dollar amounts and ratios of the Company and Byline Bank as of December 31, 2021:

		Actual								Minimum Capital Required								Required to be Considered Well Capitalized
December 31, 2021		Amount				Ratio				Amount				Ratio				Amount				Ratio
Total capital to risk weighted assets:
Company		$	830,262				14.70	%		$	451,903				8.00	%		N/A				N/A
Bank			753,480				13.38	%			450,470				8.00	%		$	563,087				10.00	%
Tier 1 capital to risk weighted assets:
Company		$	698,846				12.37	%		$	338,927				6.00	%		N/A				N/A
Bank		$	697,064				12.38	%			337,852				6.00	%		$	450,470				8.00	%
Common Equity Tier 1 (CET1) to risk weighted assets:
Company		$	643,408				11.39	%		$	254,195				4.50	%		N/A				N/A
Bank			697,064				12.38	%			253,389				4.50	%		$	366,007				6.50	%
Tier 1 capital to average assets:
Company		$	698,846				10.89	%		$	256,657				4.00	%		N/A				N/A
Bank			697,064				10.87	%			256,478				4.00	%		$	320,597				5.00	%

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

Conference Call, Webcast and Slide Presentation

We will host a conference call and webcast at 9:00 a.m. Central Time on Friday, January 28, 2022 to discuss our quarterly financial results. Analysts and investors may participate in the question-and-answer session. The call can be accessed via telephone at (844) 200-6205; passcode 337883. A recorded replay can be accessed through February 11, 2022 by dialing (866) 813-9403; passcode: 531731.

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

About Byline Bancorp, Inc.

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

Forward-Looking Statements

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

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

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

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

BYLINE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)
		December 31,				September 30,				June 30,				March 31,				December 31,
(dollars in thousands)		2021				2021				2021				2021				2020
ASSETS
Cash and due from banks		$	35,247			$	46,900			$	50,558			$	47,101			$	41,432
Interest bearing deposits with other banks			122,684				95,978				52,138				66,038				41,988
Cash and cash equivalents			157,931				142,878				102,696				113,139				83,420
Equity and other securities, at fair value			10,578				10,299				10,575				8,557				8,764
Securities available-for-sale, at fair value			1,454,542				1,427,605				1,495,789				1,675,907				1,447,230
Securities held-to-maturity, at amortized cost			3,885				3,887				3,890				3,892				4,395
Restricted stock, at cost			22,002				15,927				11,927				19,057				10,507
Loans held for sale			64,460				48,372				25,046				28,584				7,924
Loans and leases:
Loans and leases			4,537,128				4,609,228				4,469,457				4,454,620				4,340,535
Allowance for loan and lease losses			(55,012	)			(60,598	)			(61,719	)			(65,590	)			(66,347	)
Net loans and leases			4,482,116				4,548,630				4,407,738				4,389,030				4,274,188
Servicing assets, at fair value			23,744				23,597				24,683				22,140				22,042
Premises and equipment, net			62,548				76,995				80,482				85,182				86,728
Other real estate owned, net			2,112				3,033				4,417				5,952				6,350
Goodwill and other intangible assets, net			165,558				167,296				169,034				170,882				172,631
Bank-owned life insurance			80,039				60,992				60,628				60,258				10,009
Deferred tax assets, net			50,329				45,165				43,127				48,662				40,181
Accrued interest receivable and other assets			116,328				129,775				100,570				118,883				216,283
Total assets		$	6,696,172			$	6,704,451			$	6,540,602			$	6,750,125			$	6,390,652
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Non-interest-bearing demand deposits		$	2,158,420			$	2,117,749			$	2,089,455			$	2,015,643			$	1,762,676
Interest-bearing deposits			2,996,627				3,040,529				3,002,740				3,008,897				2,989,355
Total deposits			5,155,047				5,158,278				5,092,195				5,024,540				4,752,031
Other borrowings			519,723				539,119				446,836				749,719				647,901
Subordinated notes, net			73,517				73,473				73,429				73,386				73,342
Junior subordinated debentures issued to capital trusts, net			36,906				36,796				36,682				36,565				36,451
Accrued expenses and other liabilities			74,597				72,367				74,387				72,120				75,463
Total liabilities			5,859,790				5,880,033				5,723,529				5,956,330				5,585,188
STOCKHOLDERS’ EQUITY
Preferred stock			10,438				10,438				10,438				10,438				10,438
Common stock			387				386				385				385				384
Additional paid-in capital			593,753				592,192				590,422				589,209				587,165
Retained earnings			271,676				258,077				236,363				210,385				191,098
Treasury stock			(31,570	)			(31,161	)			(20,712	)			(8,275	)			(1,668	)
Accumulated other comprehensive income (loss), net of tax			(8,302	)			(5,514	)			177				(8,347	)			18,047
Total stockholders’ equity			836,382				824,418				817,073				793,795				805,464
Total liabilities and stockholders equity		$	6,696,172			$	6,704,451			$	6,540,602			$	6,750,125			$	6,390,652

BYLINE BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
	Three Months Ended																				Year Ended
(dollars in thousands, except per share data)	December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
	2021				2021				2021				2021				2020				2021				2020
INTEREST AND DIVIDEND INCOME
Interest and fees on loans and leases	$	58,570			$	56,291			$	54,324			$	53,808			$	53,441			$	222,993			$	208,788
Interest on securities		5,619				5,534				6,359				6,089				6,252				23,601				28,868
Other interest and dividend income		495				947				628				262				232				2,332				1,574
Total interest and dividend income		64,684				62,772				61,311				60,159				59,925				248,926				239,230
INTEREST EXPENSE
Deposits		1,037				986				1,058				1,421				1,814				4,502				16,624
Other borrowings		330				349				482				502				480				1,663				3,318
Subordinated notes and debentures		1,589				1,592				1,597				1,596				1,611				6,374				4,310
Total interest expense		2,956				2,927				3,137				3,519				3,905				12,539				24,252
Net interest income		61,728				59,845				58,174				56,640				56,020				236,387				214,978
PROVISION/(RECAPTURE) FOR LOAN AND LEASE LOSSES		(1,293	)			352				(1,969	)			4,367				10,236				1,457				55,949
Net interest income after provision/(recapture) for loan and lease losses		63,021				59,493				60,143				52,273				45,784				234,930				159,029
NON-INTEREST INCOME
Fees and service charges on deposits		1,955				1,867				1,768				1,664				1,740				7,254				6,471
Loan servicing revenue		3,392				3,344				3,188				2,769				2,645				12,693				11,319
Loan servicing asset revaluation		(2,510	)			(2,650	)			7				(1,505	)			(2,298	)			(6,658	)			(4,951	)
ATM and interchange fees		1,219				1,201				1,044				1,012				1,076				4,476				4,165
Net realized gains (losses) on securities available-for-sale		(21	)			130				(136	)			1,462				2,889				1,435				5,301
Change in fair value of equity securities, net		(98	)			(275	)			517				(206	)			428				(62	)			729
Net gains on sales of loans		12,924				12,761				12,270				8,319				9,449				46,274				33,349
Wealth management and trust income		764				815				722				768				710				3,069				2,680
Other non-interest income		1,389				1,302				1,622				1,459				1,051				5,772				2,997
Total non-interest income		19,014				18,495				21,002				15,742				17,690				74,253				62,060
NON-INTEREST EXPENSE
Salaries and employee benefits		28,850				25,978				24,588				21,806				22,559				101,222				89,756
Occupancy and equipment expense, net		4,995				4,982				4,856				5,779				6,854				20,612				22,957
Loan and lease related expenses		2,328				1,175				1,503				951				1,324				5,957				5,955
Legal, audit, and other professional fees		2,376				2,710				2,898				2,214				1,336				10,198				8,138
Data processing		3,070				3,108				2,847				2,755				2,748				11,780				10,900
Net loss recognized on other real estate owned and other related expenses		26				42				389				621				495				1,078				1,819
Other intangible assets amortization expense		1,738				1,738				1,848				1,749				1,892				7,073				7,624
Other non-interest expense		15,585				4,447				4,052				2,967				9,813				27,051				22,273
Total non-interest expense		58,968				44,180				42,981				38,842				47,021				184,971				169,422
INCOME BEFORE PROVISION FOR INCOME TAXES		23,067				33,808				38,164				29,173				16,453				124,212				51,667
PROVISION FOR INCOME TAXES		5,878				8,502				9,672				7,375				4,162				31,427				14,200
NET INCOME		17,189				25,306				28,492				21,798				12,291				92,785				37,467
Dividends on preferred shares		196				196				195				196				196				783				783
INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	16,993			$	25,110			$	28,297			$	21,602			$	12,095			$	92,002			$	36,684
EARNINGS PER COMMON SHARE
Basic	$	0.46			$	0.68			$	0.75			$	0.57			$	0.32			$	2.45			$	0.96
Diluted	$	0.45			$	0.66			$	0.73			$	0.56			$	0.31			$	2.40			$	0.96

BYLINE BANCORP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA (unaudited)
	As of or For the Three Months Ended																				As of or For the Year Ended
(dollars in thousands, except share and per share data)	December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
	2021				2021				2021				2021				2020				2021				2020
Earnings per Common Share
Basic earnings per common share	$	0.46			$	0.68			$	0.75			$	0.57			$	0.32			$	2.45			$	0.96
Diluted earnings per common share	$	0.45			$	0.66			$	0.73			$	0.56			$	0.31			$	2.40			$	0.96
Adjusted diluted earnings per common share(2)(3)(4)	$	0.69			$	0.69			$	0.77			$	0.57			$	0.38			$	2.71			$	1.05
Weighted average common shares outstanding (basic)		37,124,176				37,200,778				37,965,658				38,164,201				38,202,665				37,609,723				38,031,250
Weighted average common shares outstanding (diluted)		37,999,401				38,018,301				38,696,036				38,915,482				38,574,129				38,369,067				38,312,608
Common shares outstanding		37,713,903				37,690,087				38,094,972				38,641,851				38,618,054				37,713,903				38,618,054
Cash dividends per common share	$	0.09			$	0.09			$	0.06			$	0.06			$	0.03			$	0.30			$	0.12
Dividend payout ratio on common stock		20.00	%			13.64	%			8.22	%			10.71	%			9.68	%			12.50	%			12.50	%
Tangible book value per common share(1)	$	17.51			$	17.16			$	16.74			$	15.85			$	16.12			$	17.51			$	16.12
Key Ratios and Performance Metrics (annualized where applicable)
Net interest margin, fully taxable equivalent (1)(5)		3.97	%			3.92	%			3.76	%			3.78	%			3.78	%			3.86	%			3.81	%
Average cost of deposits		0.08	%			0.08	%			0.08	%			0.12	%			0.15	%			0.09	%			0.35	%
Efficiency ratio(2)		70.88	%			54.18	%			51.95	%			51.25	%			61.22	%			57.27	%			58.40	%
Adjusted efficiency ratio(1)(2)(3)		55.46	%			52.35	%			49.50	%			50.41	%			55.77	%			51.98	%			56.68	%
Non-interest expense to average assets		3.49	%			2.67	%			2.57	%			2.39	%			2.92	%			2.78	%			2.76	%
Adjusted non-interest expense to average assets(1)(3)		2.76	%			2.58	%			2.45	%			2.35	%			2.67	%			2.54	%			2.68	%
Return on average stockholders' equity		8.13	%			12.19	%			14.10	%			10.96	%			6.07	%			11.31	%			4.78	%
Adjusted return on average stockholders' equity(1)(3)(4)		12.42	%			12.69	%			14.80	%			11.18	%			7.50	%			12.77	%			5.21	%
Return on average assets		1.02	%			1.53	%			1.70	%			1.34	%			0.76	%			1.40	%			0.61	%
Adjusted return on average assets(1)(3)(4)		1.56	%			1.59	%			1.78	%			1.37	%			0.94	%			1.58	%			0.67	%
Non-interest income to total revenues(1)		23.55	%			23.61	%			26.53	%			21.75	%			24.00	%			23.90	%			22.40	%
Pre-tax pre-provision return on average assets(1)		1.29	%			2.07	%			2.16	%			2.06	%			1.66	%			1.89	%			1.75	%
Adjusted pre-tax pre-provision return on average assets(1)(3)		2.03	%			2.15	%			2.28	%			2.10	%			1.91	%			2.14	%			1.83	%
Return on average tangible common stockholders' equity(1)		10.94	%			16.22	%			18.87	%			14.86	%			8.61	%			15.17	%			7.06	%
Adjusted return on average tangible common stockholders' equity(1)(3)		16.38	%			16.86	%			19.77	%			15.15	%			10.47	%			17.04	%			7.63	%
Non-interest-bearing deposits to total deposits		41.87	%			41.06	%			41.03	%			40.12	%			37.09	%			41.87	%			37.09	%
Loans and leases held for sale and loans and lease held for investment to total deposits		89.26	%			90.29	%			88.26	%			89.23	%			91.51	%			89.26	%			91.51	%
Deposits to total liabilities		87.97	%			87.73	%			88.97	%			84.36	%			85.08	%			87.97	%			85.08	%
Deposits per branch	$	117,160			$	117,234			$	115,732			$	109,229			$	103,305			$	117,160			$	103,305
Asset Quality Ratios
Non-performing loans and leases to total loans and leases held for investment, net before ALLL		0.51	%			0.75	%			0.79	%			0.83	%			0.95	%			0.51	%			0.95	%
ALLL to total loans and leases held for investment, net before ALLL		1.21	%			1.31	%			1.38	%			1.47	%			1.53	%			1.21	%			1.53	%
Net charge-offs to average total loans and leases held for investment, net before ALLL		0.37	%			0.13	%			0.17	%			0.47	%			0.47	%			0.28	%			0.51	%
Acquisition accounting adjustments(4)	$	4,769			$	6,327			$	9,393			$	10,424			$	13,389			$	4,769			$	13,389
Capital Ratios
Common equity to total assets		12.33	%			12.14	%			12.33	%			11.61	%			12.44	%			12.33	%			12.44	%
Tangible common equity to tangible assets(1)		10.11	%			9.89	%			10.01	%			9.31	%			10.01	%			10.11	%			10.01	%
Leverage ratio		10.89	%			11.21	%			10.82	%			10.93	%			11.12	%			10.89	%			11.12	%
Common equity tier 1 capital ratio		11.39	%			11.32	%			11.97	%			12.09	%			12.20	%			11.39	%			12.20	%
Tier 1 capital ratio		12.37	%			12.32	%			13.05	%			13.20	%			13.36	%			12.37	%			13.36	%
Total capital ratio		14.70	%			14.78	%			15.74	%			15.96	%			16.18	%			14.70	%			16.18	%

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

BYLINE BANCORP, INC. AND SUBSIDIARIES
QUARTER-TO-DATE STATEMENT OF AVERAGE INTEREST-EARNING ASSETS AND AVERAGE INTEREST-BEARING LIABILITIES (unaudited)
		For the Three Months Ended December 31,
		2021												2020
(dollars in thousands)		Average Balance(5)				Interest Inc / Exp				Average Yield / Rate				Average Balance(5)				Interest Inc / Exp				Average Yield / Rate
ASSETS
Cash and cash equivalents		$	106,170			$	42				0.16	%		$	39,500			$	21				0.22	%
Loans and leases(1)			4,610,608				58,570				5.04	%			4,340,388				53,441				4.90	%
Taxable securities			1,288,969				5,111				1.57	%			1,364,980				5,555				1.62	%
Tax-exempt securities(2)			184,015				1,217				2.62	%			168,878				1,148				2.71	%
Total interest-earning assets		$	6,189,762			$	64,940				4.16	%		$	5,913,746			$	60,165				4.05	%
Allowance for loan and lease losses			(59,144	)											(63,891	)
All other assets			568,451												550,766
TOTAL ASSETS		$	6,699,069											$	6,400,621
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Interest checking		$	659,841			$	236				0.14	%		$	578,520			$	287				0.20	%
Money market accounts			1,089,398				345				0.13	%			1,152,012				444				0.15	%
Savings			633,469				75				0.05	%			554,633				66				0.05	%
Time deposits			688,154				381				0.22	%			802,409				1,017				0.50	%
Total interest-bearing deposits			3,070,862				1,037				0.13	%			3,087,574				1,814				0.23	%
Other borrowings			385,787				330				0.34	%			577,309				480				0.33	%
Subordinated notes and debentures			110,341				1,589				5.71	%			109,704				1,611				5.84	%
Total borrowings			496,128				1,919				1.53	%			687,013				2,091				1.21	%
Total interest-bearing liabilities		$	3,566,990			$	2,956				0.33	%		$	3,774,587			$	3,905				0.41	%
Non-interest-bearing demand deposits			2,222,583												1,761,902
Other liabilities			70,521												58,539
Total stockholders’ equity			838,975												805,593
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	6,699,069											$	6,400,621
Net interest spread(3)											3.83	%											3.64	%
Net interest income, fully taxable equivalent						$	61,984											$	56,260
Net interest margin, fully taxable equivalent(2)(4)											3.97	%											3.78	%
Tax-equivalent adjustment							(256	)			0.01	%							(240	)			0.01	%
Net interest income						$	61,728											$	56,020
Net interest margin(4)											3.96	%											3.77	%
Net loan accretion impact on margin						$	1,450				0.09	%						$	2,304				0.16	%

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

BYLINE BANCORP, INC. AND SUBSIDIARIES
YEAR-TO-DATE STATEMENT OF AVERAGE INTEREST-EARNING ASSETS AND AVERAGE INTEREST-BEARING LIABILITIES (unaudited)
		For the Year Ended December 31,
		2021												2020
(dollars in thousands)		Average Balance(5)				Interest Inc / Exp				Average Yield / Rate				Average Balance(5)				Interest Inc / Exp				Average Yield / Rate
ASSETS
Cash and cash equivalents		$	69,338			$	117				0.17	%		$	46,508			$	228				0.49	%
Loans and leases(1)			4,518,836				222,993				4.93	%			4,196,708				208,788				4.98	%
Taxable securities			1,376,045				21,909				1.59	%			1,287,480				27,233				2.12	%
Tax-exempt securities(2)			184,622				4,946				2.68	%			128,664				3,773				2.93	%
Total interest-earning assets		$	6,148,841			$	249,965				4.07	%		$	5,659,360			$	240,022				4.24	%
Allowance for loan and lease losses			(63,351	)											(48,688	)
All other assets			556,641												529,471
TOTAL ASSETS		$	6,642,131											$	6,140,143
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Interest checking		$	622,147			$	883				0.14	%		$	469,418			$	938				0.20	%
Money market accounts			1,073,970				1,285				0.12	%			1,132,978				4,238				0.37	%
Savings			610,953				289				0.05	%			520,472				252				0.05	%
Time deposits			722,974				2,045				0.28	%			940,165				11,196				1.19	%
Total interest-bearing deposits			3,030,044				4,502				0.15	%			3,063,033				16,624				0.54	%
Other borrowings			525,078				1,663				0.32	%			542,937				3,318				0.61	%
Subordinated notes and debentures			110,108				6,374				5.79	%			72,188				4,310				5.97	%
Total borrowings			635,186				8,037				1.27	%			615,125				7,628				1.24	%
Total interest-bearing liabilities		$	3,665,230			$	12,539				0.34	%		$	3,678,158			$	24,252				0.66	%
Non-interest-bearing demand deposits			2,085,454												1,624,754
Other liabilities			71,430												52,653
Total stockholders’ equity			820,017												784,578
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	6,642,131											$	6,140,143
Net interest spread(3)											3.73	%											3.58	%
Net interest income, fully taxable equivalent						$	237,426											$	215,770
Net interest margin, fully taxable equivalent(2)(4)											3.86	%											3.81	%
Tax-equivalent adjustment							(1,039	)			0.02	%							(792	)			0.01	%
Net interest income						$	236,387											$	214,978
Net interest margin(4)											3.84	%											3.80	%
Net loan accretion impact on margin						$	6,451				0.10	%						$	13,058				0.23	%

(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 divided by total average earning assets.
(5)		Average balances are average daily balances.

BYLINE BANCORP, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)

Non-GAAP Financial Measures

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

	As of or For the Three Months Ended																				As of or For the Year Ended
(dollars in thousands, except per share data)	December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
	2021				2021				2021				2021				2020				2021				2020
Net income and earnings per share excluding significant items
Reported Net Income	$	17,189			$	25,306			$	28,492			$	21,798			$	12,291			$	92,785			$	37,467
Significant items:
Impairment charges on assets held for sale and ROU asset		12,449				1,435				1,942				604				4,022				16,430				4,769
Tax benefit		(3,377	)			(391	)			(529	)			(165	)			(1,120	)			(4,462	)			(1,328	)
Adjusted Net Income	$	26,261			$	26,350			$	29,905			$	22,237			$	15,193			$	104,753			$	40,908
Reported Diluted Earnings per Share	$	0.45			$	0.66			$	0.73			$	0.56			$	0.31			$	2.40			$	0.96
Significant items:
Impairment charges on assets held for sale and ROU asset		0.33				0.04				0.05				0.02				0.10				0.43				0.12
Tax benefit		(0.09	)			(0.01	)			(0.01	)			(0.01	)			(0.03	)			(0.12	)			(0.03	)
Adjusted Diluted Earnings per Share	$	0.69			$	0.69			$	0.77			$	0.57			$	0.38			$	2.71			$	1.05

BYLINE BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited)
	As of or For the Three Months Ended																				As of or For the Year Ended
(dollars in thousands, except per share data, ratios annualized, where applicable)	December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
	2021				2021				2021				2021				2020				2021				2020
Adjusted non-interest expense:
Non-interest expense	$	58,968			$	44,180			$	42,981			$	38,842			$	47,021			$	184,971			$	169,422
Less: Significant items
Impairment charges on assets held for sale and ROU asset		12,449				1,435				1,942				604				4,022				16,430				4,769
Adjusted non-interest expense	$	46,519			$	42,745			$	41,039			$	38,238			$	42,999			$	168,541			$	164,653
Adjusted non-interest expense excluding amortization of intangible assets:
Adjusted non-interest expense	$	46,519			$	42,745			$	41,039			$	38,238			$	42,999			$	168,541			$	164,653
Less: Amortization of intangible assets		1,738				1,738				1,848				1,749				1,892				7,073				7,624
Adjusted non-interest expense excluding amortization of intangible assets	$	44,781			$	41,007			$	39,191			$	36,489			$	41,107			$	161,468			$	157,029
Pre-tax pre-provision net income:
Pre-tax income	$	23,067			$	33,808			$	38,164			$	29,173			$	16,453			$	124,212			$	51,667
Add: Provision/(recapture) for loan and lease losses		(1,293	)			352				(1,969	)			4,367				10,236				1,457				55,949
Pre-tax pre-provision net income	$	21,774			$	34,160			$	36,195			$	33,540			$	26,689			$	125,669			$	107,616
Adjusted pre-tax pre-provision net income:
Pre-tax pre-provision net income	$	21,774			$	34,160			$	36,195			$	33,540			$	26,689			$	125,669			$	107,616
Impairment charges on assets held for sale and ROU asset		12,449				1,435				1,942				604				4,022				16,430				4,769
Adjusted pre-tax pre-provision net income	$	34,223			$	35,595			$	38,137			$	34,144			$	30,711			$	142,099			$	112,385
Tax equivalent net interest income
Net interest income	$	61,728			$	59,845			$	58,174			$	56,640			$	56,020			$	236,387			$	214,978
Add: Tax-equivalent adjustment		256				264				269				250				240				1,039				792
Net interest income, fully taxable equivalent	$	61,984			$	60,109			$	58,443			$	56,890			$	56,260			$	237,426			$	215,770
Total revenue:
Net interest income	$	61,728			$	59,845			$	58,174			$	56,640			$	56,020			$	236,387			$	214,978
Add: Non-interest income		19,014				18,495				21,002				15,742				17,690				74,253				62,060
Total revenue	$	80,742			$	78,340			$	79,176			$	72,382			$	73,710			$	310,640			$	277,038
Tangible common stockholders' equity:
Total stockholders' equity	$	836,382			$	824,418			$	817,073			$	793,795			$	805,464			$	836,382			$	805,464
Less: Preferred stock		10,438				10,438				10,438				10,438				10,438				10,438				10,438
Less: Goodwill and other intangibles		165,558				167,296				169,034				170,882				172,631				165,558				172,631
Tangible common stockholders' equity	$	660,386			$	646,684			$	637,601			$	612,475			$	622,395			$	660,386			$	622,395
Tangible assets:
Total assets	$	6,696,172			$	6,704,451			$	6,540,602			$	6,750,125			$	6,390,652			$	6,696,172			$	6,390,652
Less: Goodwill and other intangibles		165,558				167,296				169,034				170,882				172,631				165,558				172,631
Tangible assets	$	6,530,614			$	6,537,155			$	6,371,568			$	6,579,243			$	6,218,021			$	6,530,614			$	6,218,021
Average tangible common stockholders' equity:
Average total stockholders' equity	$	838,975			$	823,754			$	810,490			$	806,452			$	805,593			$	820,017			$	784,578
Less: Average preferred stock		10,438				10,438				10,438				10,438				10,438				10,438				10,438
Less: Average goodwill and other intangibles		166,396				168,140				169,906				171,795				173,536				169,042				176,448
Average tangible common stockholders' equity	$	662,141			$	645,176			$	630,146			$	624,219			$	621,619			$	640,537			$	597,692
Average tangible assets:
Average total assets	$	6,699,069			$	6,560,868			$	6,720,492			$	6,587,765			$	6,400,621			$	6,642,131			$	6,140,143
Less: Average goodwill and other intangibles		166,396				168,140				169,906				171,795				173,536				169,042				176,448
Average tangible assets	$	6,532,673			$	6,392,728			$	6,550,586			$	6,415,970			$	6,227,085			$	6,473,089			$	5,963,695
Tangible net income available to common stockholders:
Net income available to common stockholders	$	16,993			$	25,110			$	28,297			$	21,602			$	12,095			$	92,002			$	36,684
Add: After-tax intangible asset amortization		1,266				1,265				1,344				1,272				1,365				5,147				5,501
Tangible net income available to common stockholders	$	18,259			$	26,375			$	29,641			$	22,874			$	13,460			$	97,149			$	42,185
Adjusted tangible net income available to common stockholders:
Tangible net income available to common stockholders	$	18,259			$	26,375			$	29,641			$	22,874			$	13,460			$	97,149			$	42,185
Impairment charges on assets held for sale and ROU asset		12,449				1,435				1,942				604				4,022				16,430				4,769
Tax benefit on significant items		(3,377	)			(391	)			(529	)			(165	)			(1,120	)			(4,462	)			(1,328	)
Adjusted tangible net income available to common stockholders	$	27,331			$	27,419			$	31,054			$	23,313			$	16,362			$	109,117			$	45,626

BYLINE BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited)
	As of or For the Three Months Ended																				As of or For the Year Ended
(dollars in thousands, except share and per share data, ratios annualized, where applicable)	December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
	2021				2021				2021				2021				2020				2021				2020
Pre-tax pre-provision return on average assets:
Pre-tax pre-provision net income	$	21,774			$	34,160			$	36,195			$	33,540			$	26,689			$	125,669			$	107,616
Average total assets		6,699,069				6,560,868				6,720,492				6,587,765				6,400,621				6,642,131				6,140,143
Pre-tax pre-provision return on average assets		1.29	%			2.07	%			2.16	%			2.06	%			1.66	%			1.89	%			1.75	%
Adjusted pre-tax pre-provision return on average assets:
Adjusted pre-tax pre-provision net income	$	34,223			$	35,595			$	38,137			$	34,144			$	30,711			$	142,099			$	112,385
Average total assets		6,699,069				6,560,868				6,720,492				6,587,765				6,400,621				6,642,131				6,140,143
Adjusted pre-tax pre-provision return on average assets		2.03	%			2.15	%			2.28	%			2.10	%			1.91	%			2.14	%			1.83	%
Net interest margin, fully taxable equivalent
Net interest income, fully taxable equivalent	$	61,984			$	60,109			$	58,443			$	56,890			$	56,260			$	237,426			$	215,770
Total average interest-earning assets		6,189,762				6,076,065				6,231,616				6,097,712				5,913,746				6,148,841				5,659,360
Net interest margin, fully taxable equivalent		3.97	%			3.92	%			3.76	%			3.78	%			3.78	%			3.86	%			3.81	%
Non-interest income to total revenues:
Non-interest income	$	19,014			$	18,495			$	21,002			$	15,742			$	17,690			$	74,253			$	62,060
Total revenues		80,742				78,340				79,176				72,382				73,710				310,640				277,038
Non-interest income to total revenues		23.55	%			23.61	%			26.53	%			21.75	%			24.00	%			23.90	%			22.40	%
Adjusted non-interest expense to average assets:
Adjusted non-interest expense	$	46,519			$	42,745			$	41,039			$	38,238			$	42,999			$	168,541			$	164,653
Average total assets		6,699,069				6,560,868				6,720,492				6,587,765				6,400,621				6,642,131				6,140,143
Adjusted non-interest expense to average assets		2.76	%			2.58	%			2.45	%			2.35	%			2.67	%			2.54	%			2.68	%
Adjusted efficiency ratio:
Adjusted non-interest expense excluding amortization of intangible assets	$	44,781			$	41,007			$	39,191			$	36,489			$	41,107			$	161,468			$	157,029
Total revenues		80,742				78,340				79,176				72,382				73,710				310,640				277,038
Adjusted efficiency ratio		55.46	%			52.35	%			49.50	%			50.41	%			55.77	%			51.98	%			56.68	%
Adjusted return on average assets:
Adjusted net income	$	26,261			$	26,350			$	29,905			$	22,237			$	15,193			$	104,753			$	40,908
Average total assets		6,699,069				6,560,868				6,720,492				6,587,765				6,400,621				6,642,131				6,140,143
Adjusted return on average assets		1.56	%			1.59	%			1.78	%			1.37	%			0.94	%			1.58	%			0.67	%
Adjusted return on average stockholders' equity:
Adjusted net income	$	26,261			$	26,350			$	29,905			$	22,237			$	15,193			$	104,753			$	40,908
Average stockholders' equity		838,975				823,754				810,490				806,452				805,593				820,017				784,578
Adjusted return on average stockholders' equity		12.42	%			12.69	%			14.80	%			11.18	%			7.50	%			12.77	%			5.21	%
Tangible common equity to tangible assets:
Tangible common equity	$	660,386			$	646,684			$	637,601			$	612,475			$	622,395			$	660,386			$	622,395
Tangible assets		6,530,614				6,537,155				6,371,568				6,579,243				6,218,021				6,530,614				6,218,021
Tangible common equity to tangible assets		10.11	%			9.89	%			10.01	%			9.31	%			10.01	%			10.11	%			10.01	%
Return on average tangible common stockholders' equity:
Tangible net income available to common stockholders	$	18,259			$	26,375			$	29,641			$	22,874			$	13,460			$	97,149			$	42,185
Average tangible common stockholders' equity		662,141				645,176				630,146				624,219				621,619				640,537				597,692
Return on average tangible common stockholders' equity		10.94	%			16.22	%			18.87	%			14.86	%			8.61	%			15.17	%			7.06	%
Adjusted return on average tangible common stockholders' equity:
Adjusted tangible net income available to common stockholders	$	27,331			$	27,419			$	31,054			$	23,313			$	16,362			$	109,117			$	45,626
Average tangible common stockholders' equity		662,141				645,176				630,146				624,219				621,619				640,537				597,692
Adjusted return on average tangible common stockholders' equity		16.38	%			16.86	%			19.77	%			15.15	%			10.47	%			17.04	%			7.63	%
Tangible book value per share:
Tangible common equity	$	660,386			$	646,684			$	637,601			$	612,475			$	622,395			$	660,386			$	622,395
Common shares outstanding		37,713,903				37,690,087				38,094,972				38,641,851				38,618,054				37,713,903				38,618,054
Tangible book value per share	$	17.51			$	17.16			$	16.74			$	15.85			$	16.12			$	17.51			$	16.12

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220127005904/en/

Investors:

Brooks Rennie

Investor Relations Manager

312-660-5805

brennie@bylinebank.com

Media:

Erin O’Neill

Director of Marketing

773-475-2901

eoneill@bylinebank.com

Source: Byline Bancorp, Inc.

FAQ

What were Byline Bancorp's Q4 2021 financial results?

Byline Bancorp reported a net income of $17.2 million, or $0.45 per diluted share, for Q4 2021.

How much capital did Byline Bancorp return to shareholders in 2021?

Byline Bancorp returned $40.3 million to common stockholders through dividends and share repurchases in 2021.

What is Byline Bancorp's net interest margin for Q4 2021?

The net interest margin for Q4 2021 was 3.96%.

How did Byline Bancorp's loans and leases perform in 2021?

Originated loans and leases increased by $425.9 million, or 11.6%, in 2021.

What operational changes are planned by Byline Bancorp for 2022?

Byline Bancorp plans to consolidate six branches in Q2 2022 to improve operating efficiencies.