Byline Bancorp, Inc. Reports Second Quarter 2021 Financial Results

Rhea-AI Summary

Byline Bancorp reported a net income of $28.5 million, or $0.73 per diluted share for Q2 2021, compared to $21.8 million or $0.56 per share in Q1 2021. Adjusted net income was $29.9 million or $0.77 per adjusted diluted share. The company announced a 200% increase in its quarterly cash dividend to $0.09 per share and an expanded stock repurchase program of 1,250,000 shares. Total loans increased at a 16.3% annualized growth rate excluding PPP loans. Total assets decreased to $6.5 billion as of June 30, 2021.

Positive

• Net income grew to $28.5 million in Q2 2021, up from $21.8 million in Q1 2021.
• Quarterly cash dividend increased by 200% to $0.09 per share.
• Expanded stock repurchase program authorizes acquisition of 1,250,000 additional shares.
• Total loans increased by 16.3% annualized, excluding PPP loans.
• Non-interest income rose by 33.4% to $21 million.
• Non-performing assets decreased to $39.9 million, down 7.2% from Q1 2021.

Negative

• Total assets decreased by $209.5 million from Q1 2021.
• Net charge-offs increased to $1.9 million in Q2 2021.

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 $28.5 million, or $0.73 per diluted share, for the second quarter of 2021, compared with net income of $21.8 million, or $0.56 per diluted share, for the first quarter of 2021 and net income of $9.1 million, or $0.24 per diluted share for the second quarter 2020. Adjusted net income¹ was $29.9 million, or $0.77 per adjusted diluted share, for the second quarter of 2021, compared with $22.2 million, or $0.57 per adjusted diluted share¹, for the first quarter of 2021 and $9.1 million, or $0.24 per adjusted diluted share for the second quarter of 2020.

Roberto R. Herencia, Executive Chairman and Chief Executive Officer of Byline Bancorp, commented, “Our second quarter results were indicative of the improving economic environment and continued execution of our strategic plan to generate a higher level of profitability. With the strong returns we are generating, we have increased the amount of capital we are returning to shareholders by increasing our quarterly cash dividend and expanding our current stock repurchase program. We have now increased our quarterly cash dividend by 200% since it was first initiated at the end of 2019. As we head into the second half of 2021, we remain well positioned to support our continued organic and acquisitive growth in the future. I want to thank our employees for their continued dedication to help our clients, communities, and shareholders.”

Alberto J. Paracchini, President of Byline Bancorp, added, “We believe increasing economic activity is driving strong inflows of commercial deposits, a higher level of loan growth, and improved asset quality. Excluding PPP loans, our total loans increased at a 16.3% annualized growth rate in the second quarter with balanced contributions coming from nearly all areas of lending. We also continue to see strong demand for government-guaranteed loans, which resulted in another quarter of significant gain on loan sale income. We continue to have a healthy loan pipeline, which is benefiting from the contributions of new banking talent we have added over the past couple of years, which should lead to continued growth and a favorable shift in our mix of earning assets going forward.”

(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.

Board Declares Cash Dividend of $0.09 per Share

On July 27, 2021, the Company's Board of Directors declared a cash dividend of $0.09 per share, payable on August 24, 2021, to stockholders of record of the Company's common stock as of August 10, 2021.

Board Authorizes Expansion of Share Repurchase Program

On July 27, 2021, the Company's Board of Directors authorized an expansion of its current stock repurchase program. Under the extended program, the Company is authorized to repurchase up to an additional 1,250,000 shares of the Company's outstanding common stock and will be in effect until December 31, 2022. The extended stock repurchase program does not require the Company to repurchase any specified number of shares of its common stock, and it may be discontinued, suspended, or restarted at any time at the Company’s discretion.

As of June 30, 2021, the Company has approximately 39.1 million shares of common stock issued and 38.1 million shares of common stock outstanding. The additional shares authorized for repurchase under the extended program represent approximately 3.2% of the Company’s issued shares and 3.3% of the Company’s outstanding shares of common stock. In connection with the previously announced stock repurchase program, the Company has repurchased 989,974 shares of common stock through June 30, 2021.

STATEMENTS OF OPERATIONS

Net Interest Income

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

														June 30, 2021
		Three Months Ended												Change from
		June 30,				March 31,				June 30,				March 31,				June 30,
(dollars in thousands)		2021				2021				2020				2021				2020
INTEREST AND DIVIDEND INCOME
Interest and fees on loans and leases		$	54,324			$	53,808			$	50,153				1.0	%			8.3	%
Interest on securities			6,359				6,089				7,530				4.4	%			(15.6	)%
Other interest and dividend income			628				262				222				140.3	%			183.0	%
Total interest and dividend income			61,311				60,159				57,905				1.9	%			5.9	%
INTEREST EXPENSE
Deposits			1,058				1,421				4,246				(25.6	)%			(75.1	)%
Other borrowings			482				502				476				(4.2	)%			1.2	%
Subordinated notes and debentures			1,597				1,596				574				0.1	%			178.1	%
Total interest expense			3,137				3,519				5,296				(10.9	)%			(40.8	)%
Net interest income		$	58,174			$	56,640			$	52,609				2.7	%			10.6	%

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
		June 30, 2021												March 31, 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		$	75,382			$	28				0.15	%		$	55,477			$	28				0.21	%
Loans and leases(1)			4,491,197				54,324				4.85	%			4,432,246				53,808				4.92	%
Taxable securities			1,477,070				5,947				1.62	%			1,430,625				5,379				1.52	%
Tax-exempt securities(2)			187,967				1,281				2.73	%			179,364				1,194				2.70	%
Total interest-earning assets		$	6,231,616			$	61,580				3.96	%		$	6,097,712			$	60,409				4.02	%
Allowance for loan and lease losses			(65,848	)											(66,989	)
All other assets			554,724												557,042
TOTAL ASSETS		$	6,720,492											$	6,587,765
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Interest checking		$	626,886			$	220				0.14	%		$	546,730			$	199				0.15	%
Money market accounts			1,052,223				279				0.11	%			1,124,101				381				0.14	%
Savings			607,035				72				0.05	%			577,504				67				0.05	%
Time deposits			717,795				487				0.27	%			777,266				774				0.40	%
Total interest-bearing deposits			3,003,939				1,058				0.14	%			3,025,601				1,421				0.19	%
Other borrowings			642,586				482				0.30	%			649,639				502				0.31	%
Subordinated notes and debentures			110,030				1,597				5.82	%			109,859				1,596				5.89	%
Total borrowings			752,616				2,079				1.11	%			759,498				2,098				1.12	%
Total interest-bearing liabilities		$	3,756,555			$	3,137				0.33	%		$	3,785,099			$	3,519				0.38	%
Non-interest-bearing demand deposits			2,085,358												1,924,178
Other liabilities			68,089												72,036
Total stockholders’ equity			810,490												806,452
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	6,720,492											$	6,587,765
Net interest spread(3)											3.63	%											3.64	%
Net interest income, fully taxable equivalent						$	58,443											$	56,890
Net interest margin, fully taxable equivalent(2)(4)											3.76	%											3.78	%
Tax-equivalent adjustment							(269	)			0.02	%							(250	)			0.01	%
Net interest income						$	58,174											$	56,640
Net interest margin(4)											3.74	%											3.77	%
Net loan accretion impact on margin						$	1,395				0.09	%						$	1,968				0.13	%

(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 second quarter of 2021 was $58.2 million, an increase of $1.5 million, or 2.7%, from the first quarter of 2021.

The increase in net interest income was primarily due to:

• An increase of $516,000 in interest income on loans and leases, due to higher lease income and loan fees;
• An increase of $270,000 in interest income on securities, due to higher yields; and
• A decrease of $363,000 in interest expense on deposits, due to favorable changes in deposit mix.

Tax-equivalent net interest margin for the second quarter of 2021 was 3.76%, down two basis points compared to the first quarter of 2021. Total net accretion income on acquired loans contributed nine basis points to the net interest margin for the second quarter of 2021 compared to 13 basis points for the first quarter of 2021, a decrease of four basis points. Paycheck Protection Program ("PPP") interest income and net fee income combined contributed $4.5 million to net interest income for the second quarter of 2021 compared to $7.0 million for the first quarter of 2021 due to the timing of forgiveness of loans and the passing of the application deadline for the second round of PPP on May 4, 2021.

The average cost of total deposits was 0.08% for the second quarter of 2021, a decrease of four basis points compared to the first quarter of 2021, mainly due to a lower average cost of time deposits and money market accounts. Average non-interest-bearing demand deposits increased $161.2 million, while average time deposits decreased by $59.5 million. Average non-interest-bearing demand deposits were 41.0% of average total deposits for the second quarter of 2021 compared to 38.9% the first quarter of 2021, mainly due to increases in commercial non-interest bearing deposits.

Provision for Loan and Lease Losses

The provision for loan and lease losses was a release of $2.0 million for the second quarter of 2021, a decrease of $6.3 million compared to a $4.4 million provision for the first quarter of 2021. The release of provision during the second quarter of 2021 was mainly impacted by an improvement in the outlook related to COVID-19.

Non-interest Income

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

		Three Months Ended												Change from
		June 30,				March 31,				June 30,				March 31,				June 30,
(dollars in thousands)		2021				2021				2020				2021				2020
NON-INTEREST INCOME
Fees and service charges on deposits		$	1,768			$	1,664			$	1,455				6.2	%			21.5	%
Loan servicing revenue			3,188				2,769				2,980				15.2	%			7.0	%
Loan servicing asset revaluation			7				(1,505	)			(711	)		NM				NM
ATM and interchange fees			1,044				1,012				845				3.1	%			23.6	%
Net gains (losses) on sales of securities available-for-sale			(136	)			1,462				—			NM				NM
Change in fair value of equity securities, net			517				(206	)			766			NM					(32.5	)%
Net gains on sales of loans			12,270				8,319				6,456				47.5	%			90.1	%
Wealth management and trust income			722				768				608				(5.9	)%			19.0	%
Other non-interest income			1,622				1,459				430				11.1	%			275.3	%
Total non-interest income		$	21,002			$	15,742			$	12,829				33.4	%			63.7	%

Non-interest income for the second quarter of 2021 was $21.0 million, an increase of $5.3 million, or 33.4%, compared to $15.7 million for the first quarter of 2021.

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

• An increase of $4.0 million in net gains on sales of loans, mainly due to higher volume of loans sold and premiums received; and
• A decrease of $1.5 million for loan servicing asset revaluation charges, which was a $7,000 upward valuation for the current quarter compared to a charge of $1.5 million in the prior quarter due to favorable fair value adjustments based on decreased discount rates and lower prepayment speeds.

During the second quarter of 2021, we sold $100.6 million of U.S. government guaranteed loans compared to $73.9 million during the first quarter of 2021.

Non-interest Expense

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

		Three Months Ended												Change from
		June 30,				March 31,				June 30,				March 31,				June 30,
(dollars in thousands)		2021				2021				2020				2021				2020
NON-INTEREST EXPENSE
Salaries and employee benefits		$	24,588			$	21,806			$	19,405				12.8	%			26.7	%
Occupancy and equipment expense, net			4,856				5,779				5,359				(16.0	)%			(9.4	)%
Loan and lease related expenses			1,503				951				1,260				57.9	%			19.2	%
Legal, audit and other professional fees			2,898				2,214				2,078				30.9	%			39.4	%
Data processing			2,847				2,755				2,826				3.4	%			0.7	%
Net loss recognized on other real estate owned and other related expenses			389				621				456				(37.4	)%			(14.7	)%
Other intangible assets amortization expense			1,848				1,749				1,892				5.6	%			(2.4	)%
Other non-interest expense			4,052				2,967				3,777				36.6	%			7.4	%
Total non-interest expense		$	42,981			$	38,842			$	37,053				10.7	%			16.0	%

Non-interest expense for the second quarter of 2021 was $43.0 million, an increase of $4.1 million, or 10.7%, from $38.8 million for the first quarter of 2021.

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

• An increase of $2.8 million in salaries and employee benefits, primarily due to higher deferred costs related to the second round of PPP loans during the first quarter of 2021; and
• An increase of $1.1 million in other non-interest expense, mainly due to impairment charges on assets held for sale.

Partially offset by:

• A decrease of $923,000 in occupancy and equipment expense, net, mainly due to lower seasonal maintenance expense.

Our efficiency ratio was 51.95% for the second quarter of 2021 compared to 51.25% for the first quarter of 2021. Excluding impairment charges on assets held for sale, our adjusted efficiency ratio¹ was 49.50% for the second quarter of 2021, compared with 50.41% for the first quarter of 2021.

INCOME TAXES

We recorded income tax expense of $9.7 million during the second quarter of 2021, compared to $7.4 million during the first quarter of 2021. The effective tax rate for both periods was 25.3%.

STATEMENTS OF FINANCIAL CONDITION

Total assets were $6.5 billion at June 30, 2021, a decrease of $209.5 million compared to $6.8 billion at March 31, 2021.

The current quarter decrease was primarily due to:

• A decrease in securities of $178.1 million, as a result of sales of mortgage-backed securities and maturities and calls during the quarter; and
• A decrease in other assets of $18.3 million mainly due to the timing of settlement of government guaranteed loans and securities sold during the prior quarter.

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

		June 30, 2021								March 31, 2021								June 30, 2020
(dollars in thousands)		Amount				% of Total				Amount				% of Total				Amount				% of Total
Originated loans and leases
Commercial real estate		$	1,156,824				25.9	%		$	1,064,151				23.9	%		$	919,510				20.9	%
Residential real estate			389,758				8.7	%			399,958				9.0	%			480,692				10.9	%
Construction, land development, and other land			271,710				6.1	%			238,122				5.3	%			219,261				5.0	%
Commercial and industrial			1,350,471				30.2	%			1,285,759				28.9	%			1,200,996				27.4	%
Paycheck protection program			476,282				10.7	%			617,006				13.8	%			611,664				13.9	%
Installment and other			982				0.0	%			1,094				0.0	%			2,714				0.1	%
Leasing financing receivables			267,300				6.0	%			243,399				5.5	%			160,741				3.7	%
Total originated loans and leases		$	3,913,327				87.6	%		$	3,849,489				86.4	%		$	3,595,578				81.9	%
Acquired impaired loans
Commercial real estate		$	91,313				2.0	%		$	96,059				2.2	%		$	126,405				2.9	%
Residential real estate			67,401				1.5	%			74,283				1.7	%			90,784				2.1	%
Construction, land development, and other land			2,008				0.0	%			1,992				0.0	%			4,784				0.1	%
Commercial and industrial			7,444				0.2	%			8,842				0.2	%			13,485				0.3	%
Installment and other			180				0.0	%			191				0.0	%			226				0.0	%
Total acquired impaired loans		$	168,346				3.7	%		$	181,367				4.1	%		$	235,684				5.4	%
Acquired non-impaired loans and leases
Commercial real estate		$	254,739				5.6	%		$	271,458				6.0	%		$	305,041				6.9	%
Residential real estate			65,119				1.5	%			71,038				1.6	%			99,288				2.2	%
Construction, land development, and other land			208				0.0	%			210				0.0	%			21,958				0.5	%
Commercial and industrial			58,320				1.3	%			69,795				1.6	%			116,668				2.7	%
Installment and other			311				0.0	%			331				0.0	%			818				0.0	%
Leasing financing receivables			9,087				0.3	%			10,932				0.3	%			16,087				0.4	%
Total acquired non-impaired loans and leases		$	387,784				8.7	%		$	423,764				9.5	%		$	559,860				12.7	%
Total loans and leases		$	4,469,457				100.0	%		$	4,454,620				100.0	%		$	4,391,122				100.0	%
Allowance for loan and lease losses			(61,719	)							(65,590	)							(51,300	)
Total loans and leases, net of allowance for loan and lease losses		$	4,407,738							$	4,389,030							$	4,339,822

Loan and Lease Deferrals

In support of customers impacted by COVID-19 and keeping with regulatory guidance, we began offering relief through payment deferrals during the first quarter of 2020. The following table shows active deferrals by category at the dates indicated:

		Active Deferrals
		As of June 30, 2021												As of December 31, 2020												Change from December 31, 2020
(dollars in thousands)		Count				Amount				Percentage of Total Loans and Leases(2)				Count				Amount				Percentage of Total Loans and Leases(2)				Count				Amount
Commercial Banking			2			$	2,167				0.05	%			21			$	22,905				0.60	%			(19	)		$	(20,738	)
Consumer Loans			—				—				—				2				703				0.02	%			(2	)			(703	)
Leasing			3				118				—				30				1,528				0.04	%			(27	)			(1,410	)
Government Guaranteed Lending			7				1,436				0.04	%			262				75,444				1.97	%			(255	)			(74,008	)
Total			12			$	3,721				0.09	%			315			$	100,580				2.63	%			(303	)		$	(96,859	)
(2) Excludes PPP loans

Paycheck Protection Program

The following table presents the net PPP loans outstanding as of June 30, 2021:

		PPP Loan Size
(dollars in thousands)		First Round				Second Round				Total
Principal outstanding		$	150,646			$	337,523			$	488,169
Unearned processing fee			(2,162	)			(13,785	)			(15,947	)
Deferred cost			552				3,508				4,060
PPP loans, net		$	149,036			$	327,246			$	476,282
Number of loans			914				2,552				3,466

PPP loans decreased by $140.7 million in the second quarter of 2021 primarily as a result of forgiveness of PPP loans originated during the first round of PPP funding. As of June 30, 2021, approximately 75.1% of first round PPP loans have been forgiven, 10.2% of first round PPP loans are in the forgiveness review or submission process, and approximately 14.7% first round PPP loans have not applied for forgiveness.

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:

														Change from
(dollars in thousands)		June 30, 2021				March 31, 2021				June 30, 2020				March 31, 2021				June 30, 2020
Non-performing assets:
Non-accrual loans and leases		$	35,514			$	37,084			$	40,505				(4.2	)%			(12.3	)%
Past due loans and leases 90 days or more and still accruing interest			—				—				—			—		%		—		%
Total non-performing loans and leases		$	35,514			$	37,084			$	40,505				(4.2	)%			(12.3	)%
Other real estate owned			4,417				5,952				8,652				(25.8	)%			(48.9	)%
Total non-performing assets		$	39,931			$	43,036			$	49,157				(7.2	)%			(18.8	)%
Accruing troubled debt restructured loans (1)		$	2,395			$	2,719			$	3,151				(11.9	)%			(24.0	)%
Total non-performing loans and leases as a percentage of total loans and leases			0.79	%			0.83	%			0.92	%
Total non-performing assets as a percentage of total assets			0.61	%			0.64	%			0.77	%
Allowance for loan and lease losses as a percentage of non-performing loans and leases			173.79	%			176.87	%			126.65	%
Non-performing assets guaranteed by U.S. government:
Non-accrual loans guaranteed		$	5,847			$	3,388			$	3,755				72.6	%			55.7	%
Past due loans 90 days or more and still accruing interest guaranteed			—				—				—			—		%		—		%
Total non-performing loans guaranteed		$	5,847			$	3,388			$	3,755				72.6	%			55.7	%
Accruing troubled debt restructured loans guaranteed (1)		$	—			$	—			$	—			—		%		—		%
Total non-performing loans and leases not guaranteed as a percentage of total loans and leases			0.66	%			0.76	%			0.84	%
Total non-performing assets not guaranteed as a percentage of total assets			0.52	%			0.59	%			0.71	%

Variances in non-performing assets were:

• Non-performing loans and leases were $35.5 million at June 30, 2021, a decrease of $1.6 million from $37.1 million at March 31, 2021; and
• Other real estate owned was $4.4 million at June 30, 2021, a decrease of $1.5 million from $5.9 million at March 31, 2021 mainly 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
		June 30,				March 31,				June 30,
(dollars in thousands)		2021				2021				2020
Allowance for loan and lease losses, beginning of period		$	65,590			$	66,347			$	41,840
Provision for (release of) loan and lease losses			(1,969	)			4,367				15,518
Net charge-offs of loans and leases			(1,902	)			(5,124	)			(6,058	)
Allowance for loan and lease losses, end of period		$	61,719			$	65,590			$	51,300
Allowance for loan and lease losses to period end total loans and leases held for investment			1.38	%			1.47	%			1.17	%
Net charge-offs (annualized) to average loans and leases outstanding during the period			0.17	%			0.47	%			0.57	%
Provision for (release of) loan and lease losses to net charge-offs during the period		(1.04)x					0.85	x			2.56	x

The allowance for loan and lease losses as a percentage of total loans and leases held for investment decreased to 1.38% at June 30, 2021 compared to 1.47% at March 31, 2021. The allowance for loan and lease losses as a percentage of total loans and leases held for investment excluding PPP loans decreased to 1.55% at June 30, 2021 from 1.71% at March 31, 2021.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance on the recognition of credit losses, which replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses. In November 2019, the FASB delayed the effective date of the standard for smaller reporting companies, which includes emerging growth companies. Assuming we remain an emerging growth company, the standard is effective for fiscal years beginning after December 15, 2022. We are in the process of implementation and determining the impact that this new authoritative guidance will have on our consolidated financial statements.

Net Charge-Offs

Net charge-offs during the second quarter of 2021 were $1.9 million, or 0.17% of average loans and leases, on an annualized basis, a decrease of $3.2 million compared to $5.1 million or 0.47% of average loans and leases, during the first quarter of 2021, and a decrease of $4.2 million from $6.1 million or 0.57% of average loans and leases from the comparable period a year ago.

Net charge-offs for the second quarter of 2021 included $1.6 million in the unguaranteed portion of U.S. government guaranteed loans, while net charge-offs for the first quarter of 2021 and second quarter of 2020 included $3.3 million and $2.0 million in the unguaranteed portion of U.S. government guaranteed loans, respectively.

Deposits and Other Liabilities

The following table presents the composition of deposits at the dates indicated:

														Change from
(dollars in thousands)		June 30, 2021				March 31, 2021				June 30, 2020				March 31, 2021				June 30, 2020
Non-interest-bearing demand deposits		$	2,089,455			$	2,015,643			$	1,768,675				3.7	%			18.1	%
Interest-bearing checking accounts			653,558				567,660				503,909				15.1	%			29.7	%
Money market demand accounts			1,023,675				1,075,330				1,233,748				(4.8	)%			(17.0	)%
Other savings			613,136				600,725				525,043				2.1	%			16.8	%
Time deposits (below $250,000)			567,469				579,682				710,429				(2.1	)%			(20.1	)%
Time deposits ($250,000 and above)			144,902				185,500				216,541				(21.9	)%			(33.1	)%
Total deposits		$	5,092,195			$	5,024,540			$	4,958,345				1.3	%			2.7	%

Total deposits were $5.1 billion at June 30, 2021, an increase of $67.7 million, or 1.3%, compared to $5.0 billion at March 31, 2021. Non-interest-bearing deposits were 41.0% and 40.1% of total deposits at June 30, 2021 and March 31, 2021, respectively.

The increase in the current quarter was primarily due to:

• An increase in non-interest-bearing deposits of $73.8 million, due to increases in commercial deposits; and
• An increase in interest-bearing checking accounts of $85.9 million, mostly due to increases in personal accounts.

Partially offset by:

• A decrease in money market demand accounts of $51.7 million, principally driven by decreases in public funds and in money market deposits; and
• A decrease in time deposits ($250,000 and above) of $40.6 million, primarily consisting of brokered deposits.

Total borrowings and other liabilities were $631.3 million at June 30, 2021, a decrease of $300.5 million from $931.8 million at March 31, 2021, primarily driven by a decrease in Federal Home Loan Bank advances of $217.0 million. The Paycheck Protection Program Liquidity Facility decreased $82.9 million to $304.7 million at June 30, 2021 from $387.6 million at March 31, 2021.

Stockholders’ Equity

Total stockholders’ equity was $817.1 million at June 30, 2021, an increase of $23.3 million from $793.8 million at March 31, 2021. The increase was primarily due to an increase in retained earnings and an increase in the fair value of available-for-sale securities, offset by repurchases of common stock.

Under its stock repurchase program announced in the fourth quarter of 2020, the Company repurchased an aggregate of 538,744 shares at an average price per share of $22.45 during the second quarter, and 871,488 shares at an average price of $21.18 year-to-date.

The following table presents the actual regulatory capital dollar amounts and ratios of the Company and Byline Bank as of June 30, 2021:

		Actual								Minimum Capital Required								Required to be Considered Well Capitalized
June 30, 2021		Amount				Ratio				Amount				Ratio				Amount				Ratio
Total capital to risk weighted assets:
Company		$	808,088				15.74	%		$	410,628				8.00	%		N/A				N/A
Bank			727,418				14.22	%			409,099				8.00	%		$	511,374				10.00	%
Tier 1 capital to risk weighted assets:
Company		$	669,765				13.05	%		$	307,971				6.00	%		N/A				N/A
Bank		$	664,095				12.99	%			306,824				6.00	%		$	409,099				8.00	%
Common Equity Tier 1 (CET1) to risk weighted assets:
Company		$	614,327				11.97	%		$	230,978				4.50	%		N/A				N/A
Bank			664,095				12.99	%			230,118				4.50	%		$	332,393				6.50	%
Tier 1 capital to average assets:
Company		$	669,765				10.82	%		$	247,646				4.00	%		N/A				N/A
Bank			664,095				10.73	%			247,596				4.00	%		$	309,495				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, July 30, 2021 to discuss our quarterly financial results. Analysts and investors may participate in the question-and-answer session. The call can be accessed via telephone at (877) 512-8755. A recorded replay can be accessed through August 13, 2021 by dialing (877) 344-7529; passcode: 10158447.

A slide presentation relating to our second 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 $6.5 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)
(dollars in thousands)		June 30,				March 31,				December 31,				September 30,				June 30,
		2021				2021				2020				2020				2020
ASSETS
Cash and due from banks		$	50,558			$	47,101			$	41,432			$	47,433			$	51,818
Interest bearing deposits with other banks			52,138				66,038				41,988				53,645				88,113
Cash and cash equivalents			102,696				113,139				83,420				101,078				139,931
Equity and other securities, at fair value			10,575				8,557				8,764				8,335				8,181
Securities available-for-sale, at fair value			1,495,789				1,675,907				1,447,230				1,509,211				1,426,871
Securities held-to-maturity, at amortized cost			3,890				3,892				4,395				4,400				4,404
Restricted stock, at cost			11,927				19,057				10,507				9,652				6,232
Loans held for sale			25,046				28,584				7,924				49,049				3,031
Loans and leases:
Loans and leases			4,469,457				4,454,620				4,340,535				4,374,517				4,391,122
Allowance for loan and lease losses			(61,719	)			(65,590	)			(66,347	)			(61,258	)			(51,300	)
Net loans and leases			4,407,738				4,389,030				4,274,188				4,313,259				4,339,822
Servicing assets, at fair value			24,683				22,140				22,042				21,267				18,351
Premises and equipment, net			80,482				85,182				86,728				94,638				95,546
Other real estate owned, net			4,417				5,952				6,350				8,150				8,652
Goodwill and other intangible assets, net			169,034				170,882				172,631				174,523				176,470
Bank-owned life insurance			60,628				60,258				10,009				9,952				9,896
Deferred tax assets, net			43,127				48,662				40,181				35,945				37,082
Accrued interest receivable and other assets			100,570				118,883				216,283				157,054				119,049
Total assets		$	6,540,602			$	6,750,125			$	6,390,652			$	6,496,513			$	6,393,518
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Non-interest-bearing demand deposits		$	2,089,455			$	2,015,643			$	1,762,676			$	1,718,682			$	1,768,675
Interest-bearing deposits			3,002,740				3,008,897				2,989,355				3,091,563				3,189,670
Total deposits			5,092,195				5,024,540				4,752,031				4,810,245				4,958,345
Other borrowings			446,836				749,719				647,901				710,560				510,414
Subordinated notes, net			73,429				73,386				73,342				73,299				48,777
Junior subordinated debentures issued to capital trusts, net			36,682				36,565				36,451				36,331				36,206
Accrued expenses and other liabilities			74,387				72,120				75,463				71,382				58,841
Total liabilities			5,723,529				5,956,330				5,585,188				5,701,817				5,612,583
STOCKHOLDERS’ EQUITY
Preferred stock			10,438				10,438				10,438				10,438				10,438
Common stock			385				385				384				383				381
Additional paid-in capital			590,422				589,209				587,165				586,057				583,307
Retained earnings			236,363				210,385				191,098				180,162				168,444
Treasury stock			(20,712	)			(8,275	)			(1,668	)			(1,668	)			(1,668	)
Accumulated other comprehensive income (loss), net of tax			177				(8,347	)			18,047				19,324				20,033
Total stockholders’ equity			817,073				793,795				805,464				794,696				780,935
Total liabilities and stockholders’ equity		$	6,540,602			$	6,750,125			$	6,390,652			$	6,496,513			$	6,393,518

BYLINE BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
		Three Months Ended																					Six Months Ended
(dollars in thousands, except per share data)		June 30,				March 31,				December 31,				September 30,					June 30,				June 30,				June 30,
		2021				2021				2020				2020					2020				2021				2020
INTEREST AND DIVIDEND INCOME
Interest and fees on loans and leases		$	54,324			$	53,808			$	53,441			$	51,036				$	50,153			$	108,132			$	104,311
Interest on securities			6,359				6,089				6,252				7,070					7,530				12,448				15,546
Other interest and dividend income			628				262				232				128					222				890				1,214
Total interest and dividend income			61,311				60,159				59,925				58,234					57,905				121,470				121,071
INTEREST EXPENSE
Deposits			1,058				1,421				1,814				2,760					4,246				2,479				12,050
Other borrowings			482				502				480				465					476				984				2,373
Subordinated notes and debentures			1,597				1,596				1,611				1,485					574				3,193				1,214
Total interest expense			3,137				3,519				3,905				4,710					5,296				6,656				15,637
Net interest income			58,174				56,640				56,020				53,524					52,609				114,814				105,434
PROVISION FOR (RELEASE OF) LOAN AND LEASE LOSSES			(1,969	)			4,367				10,236				15,740					15,518				2,398				29,973
Net interest income after provision for (release of) loan and lease losses			60,143				52,273				45,784				37,784					37,091				112,416				75,461
NON-INTEREST INCOME
Fees and service charges on deposits			1,768				1,664				1,740				1,603					1,455				3,432				3,128
Loan servicing revenue			3,188				2,769				2,645				2,936					2,980				5,957				5,738
Loan servicing asset revaluation			7				(1,505	)			(2,298	)			1,122					(711	)			(1,498	)			(3,775	)
ATM and interchange fees			1,044				1,012				1,076				1,028					845				2,056				2,061
Net gains (losses) on sales of securities available-for-sale			(136	)			1,462				2,889				1,037					—				1,326				1,375
Change in fair value of equity securities, net			517				(206	)			428				154					766				311				147
Net gains on sales of loans			12,270				8,319				9,449				12,671					6,456				20,589				11,229
Wealth management and trust income			722				768				710				693					608				1,490				1,277
Other non-interest income			1,622				1,459				1,051				990					430				3,081				956
Total non-interest income			21,002				15,742				17,690				22,234					12,829				36,744				22,136
NON-INTEREST EXPENSE
Salaries and employee benefits			24,588				21,806				22,559				23,126					19,405				46,394				44,071
Occupancy and equipment expense, net			4,856				5,779				6,854				5,220					5,359				10,635				10,883
Loan and lease related expenses			1,503				951				1,324				2,053					1,260				2,454				2,578
Legal, audit, and other professional fees			2,898				2,214				1,336				2,390					2,078				5,112				4,412
Data processing			2,847				2,755				2,748				2,661					2,826				5,602				5,491
Net loss recognized on other real estate owned and other related expenses			389				621				495				349					456				1,010				975
Other intangible assets amortization expense			1,848				1,749				1,892				1,947					1,892				3,597				3,785
Other non-interest expense			4,052				2,967				9,813				3,941					3,777				7,019				8,519
Total non-interest expense			42,981				38,842				47,021				41,687					37,053				81,823				80,714
INCOME BEFORE PROVISION FOR INCOME TAXES			38,164				29,173				16,453				18,331					12,867				67,337				16,883
PROVISION FOR INCOME TAXES			9,672				7,375				4,162				5,260					3,728				17,047				4,778
NET INCOME			28,492				21,798				12,291				13,071					9,139				50,290				12,105
Dividends on preferred shares			195				196				196				196					195				391				391
INCOME AVAILABLE TO COMMON STOCKHOLDERS		$	28,297			$	21,602			$	12,095			$	12,875				$	8,944			$	49,899			$	11,714
EARNINGS PER COMMON SHARE
Basic		$	0.75			$	0.57			$	0.32			$	0.34				$	0.24			$	1.31			$	0.31
Diluted		$	0.73			$	0.56			$	0.31			$	0.34				$	0.24			$	1.29			$	0.31

BYLINE BANCORP, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (unaudited)
		As of or For the Three Months Ended																				As of or For the Six Months Ended
(dollars in thousands, except share and per share data)		June 30,				March 31,				December 31,				September 30,				June 30,				June 30,				June 30,
		2021				2021				2020				2020				2020				2021				2020
Common Share Data
Summary of Operations
Earnings per Common Share
Basic earnings per common share		$	0.75			$	0.57			$	0.32			$	0.34			$	0.24			$	1.31			$	0.31
Diluted earnings per common share		$	0.73			$	0.56			$	0.31			$	0.34			$	0.24			$	1.29			$	0.31
Adjusted diluted earnings per common share(2)(3)(4)		$	0.77			$	0.57			$	0.38			$	0.34			$	0.24			$	1.34			$	0.32
Weighted average common shares outstanding (basic)			37,965,658				38,164,201				38,202,665				38,057,350				37,919,480				38,064,381				37,931,406
Weighted average common shares outstanding (diluted)			38,696,036				38,915,482				38,574,129				38,249,335				38,027,289				38,773,018				38,350,064
Common shares outstanding			38,094,972				38,641,851				38,618,054				38,568,916				38,383,217				38,094,972				38,388,217
Cash dividends per common share		$	0.06			$	0.06			$	0.03			$	0.03			$	0.03			$	0.12			$	0.06
Dividend payout ratio on common stock			8.22	%			10.71	%			9.68	%			8.82	%			12.50	%			9.30	%			19.35	%
Tangible book value per common share(1)		$	16.74			$	15.85			$	16.12			$	15.81			$	15.47			$	16.74			$	15.47
Key Ratios and Performance Metrics (annualized where applicable)
Net interest margin, fully taxable equivalent (1)(5)			3.76	%			3.78	%			3.78	%			3.61	%			3.72	%			3.77	%			3.94	%
Average cost of deposits			0.08	%			0.12	%			0.15	%			0.22	%			0.36	%			0.10	%			0.54	%
Efficiency ratio(2)			51.95	%			51.25	%			61.22	%			52.46	%			53.73	%			51.61	%			60.30	%
Adjusted efficiency ratio(1)(2)(3)			49.50	%			50.41	%			55.77	%			52.42	%			53.73	%			49.93	%			59.74	%
Non-interest expense to average assets			2.57	%			2.39	%			2.92	%			2.59	%			2.41	%			2.48	%			2.76	%
Adjusted non-interest expense to average assets(1)(3)			2.45	%			2.35	%			2.67	%			2.59	%			2.41	%			2.40	%			2.74	%
Return on average stockholders' equity			14.10	%			10.96	%			6.07	%			6.57	%			4.74	%			12.54	%			3.16	%
Adjusted return on average stockholders' equity(1)(3)(4)			14.80	%			11.18	%			7.50	%			6.58	%			4.74	%			13.01	%			3.29	%
Return on average assets			1.70	%			1.34	%			0.76	%			0.81	%			0.59	%			1.52	%			0.41	%
Adjusted return on average assets(1)(3)(4)			1.78	%			1.37	%			0.94	%			0.81	%			0.59	%			1.58	%			0.43	%
Non-interest income to total revenues(1)			26.53	%			21.75	%			24.00	%			29.35	%			19.61	%			24.24	%			17.35	%
Pre-tax pre-provision return on average assets(1)			2.16	%			2.06	%			1.66	%			2.12	%			1.85	%			2.11	%			1.60	%
Adjusted pre-tax pre-provision return on average assets(1)(3)			2.28	%			2.10	%			1.91	%			2.12	%			1.85	%			2.19	%			1.63	%
Return on average tangible common stockholders' equity(1)			18.87	%			14.86	%			8.61	%			9.39	%			7.05	%			16.88	%			4.99	%
Adjusted return on average tangible common stockholders' equity(1)(3)			19.77	%			15.15	%			10.47	%			9.40	%			7.05	%			17.48	%			5.17	%
Non-interest-bearing deposits to total deposits			41.03	%			40.12	%			37.09	%			35.73	%			35.67	%			41.03	%			35.67	%
Loans and leases held for sale and loans and lease held for investment to total deposits			88.26	%			89.23	%			91.51	%			91.96	%			88.62	%			88.26	%			88.62	%
Deposits to total liabilities			88.97	%			84.36	%			85.08	%			84.36	%			88.34	%			88.97	%			88.34	%
Deposits per branch		$	115,732			$	109,229			$	103,305			$	84,390			$	86,989			$	115,732			$	86,989
Asset Quality Ratios
Non-performing loans and leases to total loans and leases held for investment, net before ALLL			0.79	%			0.83	%			0.95	%			0.99	%			0.92	%			0.79	%			0.92	%
ALLL to total loans and leases held for investment, net before ALLL			1.38	%			1.47	%			1.53	%			1.40	%			1.17	%			1.38	%			1.17	%
Net charge-offs to average total loans and leases held for investment, net before ALLL			0.17	%			0.47	%			0.47	%			0.53	%			0.57	%			0.32	%			0.53	%
Acquisition accounting adjustments(4)		$	9,393			$	10,424			$	13,389			$	17,133			$	19,324			$	9,393			$	19,324
Capital Ratios
Common equity to total assets			12.33	%			11.61	%			12.44	%			12.07	%			12.05	%			12.33	%			12.05	%
Tangible common equity to tangible assets(1)			10.01	%			9.31	%			10.01	%			9.64	%			9.55	%			10.01	%			9.55	%
Leverage ratio			10.82	%			10.93	%			11.12	%			10.93	%			10.29	%			10.82	%			10.29	%
Common equity tier 1 capital ratio			11.97	%			12.09	%			12.20	%			12.55	%			12.33	%			11.97	%			12.33	%
Tier 1 capital ratio			13.05	%			13.20	%			13.36	%			13.77	%			13.56	%			13.05	%			13.56	%
Total capital ratio			15.74	%			15.96	%			16.18	%			16.67	%			15.86	%			15.74	%			15.86	%

(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 June 30,
		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		$	75,382			$	28				0.15	%		$	58,971			$	25				0.17	%
Loans and leases(1)			4,491,197				54,324				4.85	%			4,283,654				50,153				4.71	%
Taxable securities			1,477,070				5,947				1.62	%			1,243,604				7,021				2.27	%
Tax-exempt securities(2)			187,967				1,281				2.73	%			117,340				894				3.06	%
Total interest-earning assets		$	6,231,616			$	61,580				3.96	%		$	5,703,569			$	58,093				4.10	%
Allowance for loan and lease losses			(65,848	)											(43,009	)
All other assets			554,724												526,414
TOTAL ASSETS		$	6,720,492											$	6,186,974
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Interest checking		$	626,886			$	220				0.14	%		$	392,070			$	165				0.17	%
Money market accounts			1,052,223				279				0.11	%			1,214,713				946				0.31	%
Savings			607,035				72				0.05	%			511,049				61				0.05	%
Time deposits			717,795				487				0.27	%			976,710				3,074				1.27	%
Total interest-bearing deposits			3,003,939				1,058				0.14	%			3,094,542				4,246				0.00	%
Other borrowings			642,586				482				0.30	%			534,766				476				0.36	%
Subordinated notes and debentures			110,030				1,597				5.82	%			40,180				574				5.75	%
Total borrowings			752,616				2,079				1.11	%			574,946				1,050				0.73	%
Total interest-bearing liabilities		$	3,756,555			$	3,137				0.33	%		$	3,669,488			$	5,296				0.58	%
Non-interest-bearing demand deposits			2,085,358												1,692,723
Other liabilities			68,089												48,884
Total stockholders’ equity			810,490												775,879
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	6,720,492											$	6,186,974
Net interest spread(3)											3.63	%											3.52	%
Net interest income, fully taxable equivalent						$	58,443											$	52,797
Net interest margin, fully taxable equivalent(2)(4)											3.76	%											3.72	%
Tax-equivalent adjustment							(269	)			0.02	%							(188	)			0.01	%
Net interest income						$	58,174											$	52,609
Net interest margin(4)											3.74	%											3.71	%
Net loan accretion impact on margin						$	1,395				0.09	%						$	3,172				0.22	%

(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 Six Months Ended June 30,
		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		$	65,484			$	56				0.17	%		$	48,952			$	182				0.75	%
Loans and leases(1)			4,461,884				108,132				4.89	%			4,041,433				104,311				5.19	%
Taxable securities			1,453,976				11,326				1.57	%			1,209,362				15,337				2.55	%
Tax-exempt securities(2)			183,689				2,475				2.72	%			101,010				1,571				3.13	%
Total interest-earning assets		$	6,165,033			$	121,989				3.99	%		$	5,400,757			$	121,401				4.52	%
Allowance for loan and lease losses			(66,415	)											(38,336	)
All other assets			555,877												514,042
TOTAL ASSETS		$	6,654,495											$	5,876,463
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Interest checking		$	587,030			$	419				0.14	%		$	365,487			$	425				0.23	%
Money market accounts			1,087,964				660				0.12	%			1,088,459				3,160				0.58	%
Savings			592,350				139				0.05	%			495,660				122				0.05	%
Time deposits			747,366				1,261				0.34	%			1,045,153				8,343				1.61	%
Total interest-bearing deposits			3,014,710				2,479				0.17	%			2,994,759				12,050				0.81	%
Other borrowings			646,093				984				0.31	%			527,937				2,373				0.90	%
Subordinated notes and debentures			109,945				3,193				5.86	%			38,782				1,214				6.30	%
Total borrowings			756,038				4,177				1.11	%			566,719				3,587				1.27	%
Total interest-bearing liabilities		$	3,770,748			$	6,656				0.36	%		$	3,561,478			$	15,637				0.88	%
Non-interest-bearing demand deposits			2,005,213												1,495,761
Other liabilities			70,052												48,571
Total stockholders’ equity			808,482												770,653
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	6,654,495											$	5,876,463
Net interest spread(3)											3.63	%											3.64	%
Net interest income, fully taxable equivalent						$	115,333											$	105,764
Net interest margin, fully taxable equivalent(2)(4)											3.77	%											3.94	%
Tax-equivalent adjustment							(519	)			0.01	%							(330	)			0.01	%
Net interest income						$	114,814											$	105,434
Net interest margin(4)											3.76	%											3.93	%
Net loan accretion impact on margin						$	3,363				0.11	%						$	6,843				0.25	%

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

BYLINE BANCORP, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)
Non-GAAP Financial Measures
This release contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These measures include adjusted net income, adjusted diluted earnings per share, adjusted efficiency ratio, adjusted non-interest expense to average assets, tax-equivalent net interest margin, 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 Six Months Ended
(dollars in thousands, except per share data)		June 30, 2021				March 31, 2021				December 31, 2020				September 30, 2020				June 30, 2020				June 30, 2021				June 30, 2020
Net income and earnings per share excluding significant items
Reported Net Income		$	28,492			$	21,798			$	12,291			$	13,071			$	9,139			$	50,290			$	12,105
Significant items:
Impairment charges on assets held for sale			1,942				604				4,022				32				—				2,546				715
Tax benefit			(529	)			(165	)			(1,120	)			(9	)			—				(694	)			(199	)
Adjusted Net Income		$	29,905			$	22,237			$	15,193			$	13,094			$	9,139			$	52,142			$	12,621
Reported Diluted Earnings per Share		$	0.73			$	0.56			$	0.31			$	0.34			$	0.24			$	1.29			$	0.31
Significant items:
Impairment charges on assets held for sale			0.05				0.02				0.10				—				—				0.07				0.02
Tax benefit			(0.01	)			(0.01	)			(0.03	)			—				—				(0.02	)			(0.01	)
Adjusted Diluted Earnings per Share		$	0.77			$	0.57			$	0.38			$	0.34			$	0.24			$	1.34			$	0.32

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 Six Months Ended
(dollars in thousands, except per share data, ratios annualized, where applicable)		June 30, 2021				March 31, 2021				December 31, 2020				September 30, 2020				June 30, 2020				June 30, 2021				June 30, 2020
Adjusted non-interest expense:
Non-interest expense		$	42,981			$	38,842			$	47,021			$	41,687			$	37,053			$	81,823			$	80,714
Less: Significant items
Impairment charges on assets held for sale			1,942				604				4,022				32				—				2,546				715
Adjusted non-interest expense		$	41,039			$	38,238			$	42,999			$	41,655			$	37,053			$	79,277			$	79,999
Adjusted non-interest expense excluding amortization of intangible assets:
Adjusted non-interest expense		$	41,039			$	38,238			$	42,999			$	41,655			$	37,053			$	79,277			$	79,999
Less: Amortization of intangible assets			1,848				1,749				1,892				1,947				1,892				3,597				3,785
Adjusted non-interest expense excluding amortization of intangible assets		$	39,191			$	36,489			$	41,107			$	39,708			$	35,161			$	75,680			$	76,214
Pre-tax pre-provision net income:
Pre-tax income		$	38,164			$	29,173			$	16,453			$	18,331			$	12,867			$	67,337			$	16,883
Add: Provision for loan and lease losses			(1,969	)			4,367				10,236				15,740				15,518				2,398				29,973
Pre-tax pre-provision net income		$	36,195			$	33,540			$	26,689			$	34,071			$	28,385			$	69,735			$	46,856
Adjusted pre-tax pre-provision net income:
Pre-tax pre-provision net income		$	36,195			$	33,540			$	26,689			$	34,071			$	28,385			$	69,735			$	46,856
Impairment charges on assets held for sale			1,942				604				4,022				32				—				2,546				715
Adjusted pre-tax pre-provision net income		$	38,137			$	34,144			$	30,711			$	34,103			$	28,385			$	72,281			$	47,571
Tax Equivalent Net Interest Income
Net interest income		$	58,174			$	56,640			$	56,020			$	53,524			$	52,609			$	114,814			$	105,434
Add: Tax-equivalent adjustment			269				250				240				222				188				519				330
Net interest income, fully taxable equivalent		$	58,443			$	56,890			$	56,260			$	53,746			$	52,797			$	115,333			$	105,764
Total revenues:
Net interest income		$	58,174			$	56,640			$	56,020			$	53,524			$	52,609			$	114,814			$	105,434
Add: Non-interest income			21,002				15,742				17,690				22,234				12,829				36,744				22,136
Total revenues		$	79,176			$	72,382			$	73,710			$	75,758			$	65,438			$	151,558			$	127,570
Tangible common stockholders' equity:
Total stockholders' equity		$	817,073			$	793,795			$	805,464			$	794,696			$	780,935			$	817,073			$	780,935
Less: Preferred stock			10,438				10,438				10,438				10,438				10,438				10,438				10,438
Less: Goodwill and other intangibles			169,034				170,882				172,631				174,523				176,470				169,034				176,470
Tangible common stockholders' equity		$	637,601			$	612,475			$	622,395			$	609,735			$	594,027			$	637,601			$	594,027
Tangible assets:
Total assets		$	6,540,602			$	6,750,125			$	6,390,652			$	6,496,513			$	6,393,518			$	6,540,602			$	6,393,518
Less: Goodwill and other intangibles			169,034				170,882				172,631				174,523				176,470				169,034				176,470
Tangible assets		$	6,371,568			$	6,579,243			$	6,218,021			$	6,321,990			$	6,217,048			$	6,371,568			$	6,217,048
Average tangible common stockholders' equity:
Average total stockholders' equity		$	810,490			$	806,452			$	805,593			$	791,111			$	775,879			$	808,482			$	770,653
Less: Average preferred stock			10,438				10,438				10,438				10,438				10,438				10,438				10,438
Less: Average goodwill and other intangibles			169,906				171,795				173,536				175,443				177,440				170,845				178,428
Average tangible common stockholders' equity		$	630,146			$	624,219			$	621,619			$	605,230			$	588,001			$	627,199			$	581,787
Average tangible assets:
Average total assets		$	6,720,492			$	6,587,765			$	6,400,621			$	6,401,290			$	6,186,974			$	6,654,495			$	5,876,463
Less: Average goodwill and other intangibles			169,906				171,795				173,536				175,443				177,440				170,845				178,428
Average tangible assets		$	6,550,586			$	6,415,970			$	6,227,085			$	6,225,847			$	6,009,534			$	6,483,650			$	5,698,035
Tangible net income available to common stockholders:
Net income available to common stockholders		$	28,297			$	21,602			$	12,095			$	12,875			$	8,944			$	49,899			$	11,714
Add: After-tax intangible asset amortization			1,344				1,272				1,365				1,405				1,365				2,616				2,731
Tangible net income available to common stockholders		$	29,641			$	22,874			$	13,460			$	14,280			$	10,309			$	52,515			$	14,445
Adjusted tangible net income available to common stockholders:
Tangible net income available to common stockholders		$	29,641			$	22,874			$	13,460			$	14,280			$	10,309			$	52,515			$	14,445
Impairment charges on assets held for sale			1,942				604				4,022				32				—				2,546				715
Tax benefit on significant items			(529	)			(165	)			(1,120	)			(9	)			—				(694	)			(199	)
Adjusted tangible net income available to common stockholders		$	31,054			$	23,313			$	16,362			$	14,303			$	10,309			$	54,367			$	14,961

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 Six Months Ended
(dollars in thousands, except share and per share data, ratios annualized, where applicable)		June 30, 2021				March 31, 2021				December 31, 2020				September 30, 2020				June 30, 2020				June 30, 2021				June 30, 2020
Pre-tax pre-provision return on average assets:
Pre-tax pre-provision net income		$	36,195			$	33,540			$	26,689			$	34,071			$	28,385			$	69,735			$	46,856
Average total assets			6,720,492				6,587,765				6,400,621				6,401,290				6,186,974				6,654,495				5,876,463
Pre-tax pre-provision return on average assets			2.16	%			2.06	%			1.66	%			2.12	%			1.85	%			2.11	%			1.60	%
Adjusted pre-tax pre-provision return on average assets:
Adjusted pre-tax pre-provision net income		$	38,137			$	34,144			$	30,711			$	34,103			$	28,385			$	72,281			$	47,571
Average total assets			6,720,492				6,587,765				6,400,621				6,401,290				6,186,974				6,654,495				5,876,463
Adjusted pre-tax pre-provision return on average assets			2.28	%			2.10	%			1.91	%			2.12	%			1.85	%			2.19	%			1.63	%
Net interest margin, fully taxable equivalent
Net interest income, fully taxable equivalent		$	58,443			$	56,890			$	56,260			$	53,746			$	52,797			$	115,333			$	105,764
Total average interest-earning assets			6,231,616				6,097,712				5,913,746				5,916,554				5,703,569				6,165,033				5,400,757
Net interest margin, fully taxable equivalent			3.76	%			3.78	%			3.78	%			3.61	%			3.72	%			3.77	%			3.94	%
Non-interest income to total revenues:
Non-interest income		$	21,002			$	15,742			$	17,690			$	22,234			$	12,829			$	36,744			$	22,136
Total revenues			79,176				72,382				73,710				75,758				65,438				151,558				127,570
Non-interest income to total revenues			26.53	%			21.75	%			24.00	%			29.35	%			19.61	%			24.24	%			17.35	%
Adjusted non-interest expense to average assets:
Adjusted non-interest expense		$	41,039			$	38,238			$	42,999			$	41,655			$	37,053			$	79,277			$	79,999
Average total assets			6,720,492				6,587,765				6,400,621				6,401,290				6,186,974				6,654,495				5,876,463
Adjusted non-interest expense to average assets			2.45	%			2.35	%			2.67	%			2.59	%			2.41	%			2.40	%			2.74	%
Adjusted efficiency ratio:
Adjusted non-interest expense excluding amortization of intangible assets		$	39,191			$	36,489			$	41,107			$	39,708			$	35,161			$	75,680			$	76,214
Total revenues			79,176				72,382				73,710				75,758				65,438				151,558				127,570
Adjusted efficiency ratio			49.50	%			50.41	%			55.77	%			52.42	%			53.73	%			49.93	%			59.74	%
Adjusted return on average assets:
Adjusted net income		$	29,905			$	22,237			$	15,193			$	13,094			$	9,139			$	52,142			$	12,621
Average total assets			6,720,492				6,587,765				6,400,621				6,401,290				6,186,974				6,654,495				5,876,463
Adjusted return on average assets			1.78	%			1.37	%			0.94	%			0.81	%			0.59	%			1.58	%			0.43	%
Adjusted return on average stockholders' equity:
Adjusted net income		$	29,905			$	22,237			$	15,193			$	13,094			$	9,139			$	52,142			$	12,621
Average stockholders' equity			810,490				806,452				805,593				791,111				775,879				808,482				770,653
Adjusted return on average stockholders' equity			14.80	%			11.18	%			7.50	%			6.58	%			4.74	%			13.01	%			3.29	%
Tangible common equity to tangible assets:
Tangible common equity		$	637,601			$	612,475			$	622,395			$	609,735			$	594,027			$	637,601			$	594,027
Tangible assets			6,371,568				6,579,243				6,218,021				6,321,990				6,217,048				6,371,568				6,217,048
Tangible common equity to tangible assets			10.01	%			9.31	%			10.01	%			9.64	%			9.55	%			10.01	%			9.55	%
Return on average tangible common stockholders' equity:
Tangible net income available to common stockholders		$	29,641			$	22,874			$	13,460			$	14,280			$	10,309			$	52,515			$	14,445
Average tangible common stockholders' equity			630,146				624,219				621,619				605,230				588,001				627,199				581,787
Return on average tangible common stockholders' equity			18.87	%			14.86	%			8.61	%			9.39	%			7.05	%			16.88	%			4.99	%
Adjusted return on average tangible common stockholders' equity:
Adjusted tangible net income available to common stockholders		$	31,054			$	23,313			$	16,362			$	14,303			$	10,309			$	54,367			$	14,961
Average tangible common stockholders' equity			630,146				624,219				621,619				605,230				588,001				627,199				581,787
Adjusted return on average tangible common stockholders' equity			19.77	%			15.15	%			10.47	%			9.40	%			7.05	%			17.48	%			5.17	%
Tangible book value per share:
Tangible common equity		$	637,601			$	612,475			$	622,395			$	609,735			$	594,027			$	637,601			$	594,027
Common shares outstanding			38,094,972				38,641,851				38,618,054				38,568,916				38,383,217				38,094,972				38,388,217
Tangible book value per share		$	16.74			$	15.85			$	16.12			$	15.81			$	15.47			$	16.74			$	15.47

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210729006134/en/

FAQ

What was Byline Bancorp's net income for Q2 2021?

Byline Bancorp reported a net income of $28.5 million for Q2 2021.

What is the cash dividend declared by Byline Bancorp?

Byline Bancorp declared a cash dividend of $0.09 per share.

What is the annualized growth rate of loans at Byline Bancorp?

Total loans increased at a 16.3% annualized growth rate excluding PPP loans.

When is the stock repurchase program for Byline Bancorp effective until?

The expanded stock repurchase program is effective until December 31, 2022.

What were the non-performing assets for Byline Bancorp as of June 30, 2021?

Non-performing assets were $39.9 million as of June 30, 2021.