Byline Bancorp, Inc. Reports Second Quarter 2022 Financial Results

Rhea-AI Summary

Byline Bancorp reported a net income of $20.3 million or $0.54 per diluted share for Q2 2022, down from $22.3 million in Q1 2022 and $28.5 million in Q2 2021. Total revenue reached $75.8 million, driven by net interest income of $61.6 million and non-interest income of $14.2 million. Loan and lease growth was strong at 34.2% annually, despite a slight dip in net interest margin to 3.76%. The company declared a $0.09 cash dividend per share, payable on August 23, 2022.

Positive

• Net income for Q2 2022 was $20.3 million, demonstrating resilience in a challenging market.
• Net interest income increased by 4.9% from Q1 2022, totaling $61.6 million.
• Loan and lease growth was remarkable at 34.2% annually, excluding PPP loans.
• Cash dividend of $0.09 per share declared, showing commitment to returning value to shareholders.

Negative

• Net income declined from $22.3 million in Q1 2022 and $28.5 million in Q2 2021.
• Non-interest income fell by 27.1% from Q1 2022, totaling $14.2 million, impacted by loan servicing asset revaluation charges.
• Provision for loan and lease losses increased to $5.9 million, indicating increased credit risks.

Select Second Quarter 2022 Financial Highlights

• Net income of $20.3 million, or $0.54 per diluted share
• Net interest income of $61.6 million and $14.2 million of non-interest income
  • Total revenue¹ of $75.8 million
• Net interest margin of 3.76%
• Return on average assets of 1.17%
• Efficiency ratio of 55.29%
• Non-interest bearing deposits totaled 40.5% of total deposits
• Originated loans and leases increased $425.1 million, loan and lease production, net of loan sales of $443.0 million
• Common Equity Tier 1 to risk weighted assets of 10.26%

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 $20.3 million, or $0.54 per diluted share, for the second quarter of 2022, compared with net income of $22.3 million, or $0.58 per diluted share, for the first quarter of 2022, and net income of $28.5 million, or $0.73 per diluted share, for the second quarter 2021.

Roberto R. Herencia, Executive Chairman and Chief Executive Officer of Byline Bancorp, Inc., commented, “We are pleased with our second quarter results as our team continued to move with agility and execute well in a highly dynamic environment. We continued to experience healthy growth in our loan and lease portfolio as we eclipsed $5.0 billion in loans and leases and surpassed $7.0 billion total assets. I want to thank our employees for their hard work and unwavering dedication to our business.”

Alberto J. Paracchini, President of Byline Bancorp, Inc. added, “Our second quarter results reflect the strength and durability of our business model as we posted strong growth in net interest income. Loan and lease growth exceeded our expectations with annualized growth of 34.2%, excluding PPP loans. Credit quality remains solid, and we continue to manage our operating expenses prudently. As we head into the second half of the year we face an uncertain economic environment. However, we believe we are well positioned for the range of possible outcomes given our strong liquidity and capital ratios, our diversified business mix, and our well-established risk management track record.”

Board Declares Cash Dividend of $0.09 per Share

On July 26, 2022, the Company's Board of Directors declared a cash dividend of $0.09 per share, payable on August 23, 2022, to stockholders of record of the Company's common stock as of August 9, 2022.

Company Completes Branch Consolidations

The Company continued to execute on its previously announced strategic efforts to optimize its branch network by consolidating six branches during the second quarter 2022, which resulted in a one-time charge of $267,000 during the quarter. These consolidations conclude the Company’s branch consolidation and real estate reduction strategic efforts announced on December 10, 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.

STATEMENTS OF OPERATIONS

Net Interest Income

The following table presents the average interest-earning assets and average interest-bearing liabilities for the periods indicated. Net interest income and margin are adjusted to reflect tax-exempt interest income on a tax-equivalent basis using tax rates effective as of the end of the period:

	For the Three Months Ended
	June 30, 2022												March 31, 2022												June 30, 2021
(dollars in thousands)	Average Balance(5)				Interest Inc / Exp				Avg. Yield / Rate				Average Balance(5)				Interest Inc / Exp				Avg. Yield / Rate				Average Balance(5)				Interest Inc / Exp				Avg. Yield / Rate
ASSETS
Cash and cash equivalents	$	66,034			$	74				0.45	%		$	74,822			$	29				0.16	%		$	75,382			$	28				0.15	%
Loans and leases(1)		5,009,077				59,674				4.78	%			4,670,070				55,426				4.81	%			4,491,197				54,324				4.85	%
Taxable securities		1,330,200				5,904				1.78	%			1,339,345				5,475				1.66	%			1,477,070				5,947				1.62	%
Tax-exempt securities(2)		168,567				1,131				2.69	%			169,652				1,124				2.69	%			187,967				1,281				2.73	%
Total interest-earning assets	$	6,573,878			$	66,783				4.07	%		$	6,253,889			$	62,054				4.02	%		$	6,231,616			$	61,580				3.96	%
Allowance for loan and lease losses		(59,883	)											(55,885	)											(65,848	)
All other assets		461,730												507,982												554,724
TOTAL ASSETS	$	6,975,725											$	6,705,986											$	6,720,492
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Interest checking	$	615,831			$	415				0.27	%		$	579,297			$	178				0.12	%		$	626,886			$	220				0.14	%
Money market accounts		1,307,320				1,194				0.37	%			1,255,431				474				0.15	%			1,052,223				279				0.11	%
Savings		664,954				83				0.05	%			649,269				76				0.05	%			607,035				72				0.05	%
Time deposits		627,199				436				0.28	%			662,080				359				0.22	%			717,795				487				0.27	%
Total interest-bearing deposits		3,215,304				2,128				0.27	%			3,146,077				1,087				0.14	%			3,003,939				1,058				0.14	%
Other borrowings		497,082				1,083				0.87	%			290,545				395				0.55	%			642,586				482				0.30	%
Federal funds purchased		2,527				14				2.32	%			—				—				0.00	%			—				—				0.00	%
Subordinated notes and debentures		110,649				1,694				6.14	%			110,490				1,600				5.87	%			110,030				1,597				5.82	%
Total borrowings		610,258				2,791				1.83	%			401,035				1,995				2.02	%			752,616				2,079				1.11	%
Total interest-bearing liabilities	$	3,825,562			$	4,919				0.52	%		$	3,547,112			$	3,082				0.35	%		$	3,756,555			$	3,137				0.33	%
Non-interest-bearing demand deposits		2,265,426												2,248,035												2,085,358
Other liabilities		104,085												78,678												68,089
Total stockholders’ equity		780,652												832,161												810,490
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	6,975,725											$	6,705,986											$	6,720,492
Net interest spread(3)										3.55	%											3.67	%											3.63	%
Net interest income, fully taxable equivalent					$	61,864											$	58,972											$	58,443
Net interest margin, fully taxable equivalent(2)(4)										3.77	%											3.82	%											3.76	%
Tax-equivalent adjustment						(237	)			0.01	%							(236	)			0.01	%							(269	)			0.02	%
Net interest income					$	61,627											$	58,736											$	58,174
Net interest margin(4)										3.76	%											3.81	%											3.74	%
Net loan accretion impact on margin					$	1,383				0.08	%						$	1,476				0.10	%						$	1,395				0.09	%

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

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

														June 30, 2022
		Three Months Ended												Change from
		June 30,				March 31,				June 30,				March 31,				June 30,
(dollars in thousands)		2022				2022				2021				2022				2021
INTEREST AND DIVIDEND INCOME
Interest and fees on loans and leases		$	59,674			$	55,426			$	54,324				7.7	%			9.8	%
Interest on securities			6,264				6,155				6,359				1.8	%			(1.5	)%
Other interest and dividend income			608				237				628				157.2	%			(3.3	)%
Total interest and dividend income			66,546				61,818				61,311				7.6	%			8.5	%
INTEREST EXPENSE
Deposits			2,128				1,087				1,058				95.8	%			101.2	%
Other borrowings			1,097				395				482				178.0	%			128.0	%
Subordinated notes and debentures			1,694				1,600				1,597				5.9	%			6.0	%
Total interest expense			4,919				3,082				3,137				59.6	%			56.8	%
Net interest income		$	61,627			$	58,736			$	58,174				4.9	%			5.9	%

Net interest income for the second quarter of 2022 was $61.6 million, an increase of $2.9 million, or 4.9%, from the first quarter of 2022.

The increase in net interest income was primarily due to:

• An increase of $4.2 million in interest income on loans and leases, primarily due to loan and lease growth.

Partially offset by:

• An increase of $1.0 million in interest expense on deposits due to the rising interest rate environment.

Tax-equivalent net interest margin for the second quarter of 2022 was 3.77%, a decrease of five basis points compared to the first quarter of 2022. Total net accretion income on acquired loans contributed eight basis points to the net interest margin for the second quarter of 2022 compared to 10 basis points for the first quarter of 2022, a decrease of two basis points. PPP loan interest income and net fee income combined, contributed $746,000 to net interest income for the second quarter of 2022 compared to $2.7 million for the first quarter of 2022, a decrease of $1.9 million.

The average cost of total deposits was 0.16% for the second quarter of 2022, an increase of eight basis points compared to the first quarter of 2022. Average non-interest-bearing demand deposits were 41.3% of average total deposits for the second quarter of 2022 compared to 41.7% during the first quarter of 2022.

Provision for Loan and Lease Losses

The provision for loan and lease losses was $5.9 million for the second quarter of 2022, an increase of $913,000 compared to $5.0 million for the first quarter of 2022. The increase in provision during the second quarter of 2022 was mainly driven by changes to qualitative factors surrounding macroeconomic environment and rising interest rates, as well as growth in the loan and lease portfolio.

Non-interest Income

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

														June 30, 2022
		Three Months Ended												Change from
		June 30,				March 31,				June 30,				March 31,				June 30,
(dollars in thousands)		2022				2022				2021				2022				2021
NON-INTEREST INCOME
Fees and service charges on deposits		$	2,059			$	1,884			$	1,768				9.2	%			16.4	%
Loan servicing revenue			3,384				3,380				3,188				0.1	%			6.1	%
Loan servicing asset revaluation			(4,636	)			(1,231	)			7			NM				NM
ATM and interchange fees			1,131				1,049				1,044				7.9	%			8.4	%
Net realized gains (losses) on securities available-for-sale			52				—				(136	)		NM				NM
Change in fair value of equity securities, net			(697	)			(35	)			517			NM				NM
Net gains on sales of loans			9,983				10,827				12,270				(7.8	)%			(18.6	)%
Wealth management and trust income			900				1,048				722				(14.2	)%			24.5	%
Other non-interest income			1,985				2,504				1,622				(20.7	)%			22.4	%
Total non-interest income		$	14,161			$	19,426			$	21,002				(27.1	)%			(32.6	)%

Non-interest income for the second quarter of 2022 was $14.2 million, a decrease of $5.3 million or 27.1%, compared to $19.4 million for the first quarter of 2022

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

• An increase of $3.4 million in loan servicing asset revaluation charges due to higher downward asset revaluation adjustment resulting from unfavorable fair value adjustments due to increased discount rates; and
• A decrease of $844,000 in net gains on sales of loans due to lower premiums on government guaranteed loan sales.

During the second quarter of 2022, we sold $118.5 million of U.S. government guaranteed loans compared to $102.3 million during the first quarter of 2022.

Non-interest Expense

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

														June 30, 2022
		Three Months Ended												Change from
		June 30,				March 31,				June 30,				March 31,				June 30,
(dollars in thousands)		2022				2022				2021				2022				2021
NON-INTEREST EXPENSE
Salaries and employee benefits		$	27,697			$	28,959			$	24,588				(4.4	)%			12.6	%
Occupancy and equipment expense, net			4,409				5,128				4,856				(14.0	)%			(9.2	)%
Impairment charge on assets held for sale			—				—				1,943			NM				NM
Loan and lease related expenses			942				(891	)			1,503			NM					(37.4	)%
Legal, audit and other professional fees			1,820				2,600				2,898				(30.0	)%			(37.2	)%
Data processing			3,396				3,186				2,847				6.6	%			19.3	%
Net loss recognized on other real estate owned and other related expenses			158				54				389				189.5	%			(59.4	)%
Other intangible assets amortization expense			1,868				1,596				1,848				17.0	%			1.1	%
Other non-interest expense			3,483				3,923				2,109				(11.1	)%			65.1	%
Total non-interest expense		$	43,773			$	44,555			$	42,981				(1.8	)%			1.8	%

Non-interest expense for the second quarter of 2022 was $43.8 million, a decrease of $782,000, or 1.8%, from $44.6 million for the first quarter of 2022.

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

• A decrease of $1.3 million in salaries and employee benefits primarily due to lower payroll taxes and higher deferred salary costs related to loan and lease originations; and
• A decrease of $780,000 in legal, audit and other professional fees due to higher reimbursements of legal fees; and
• A decrease of $719,000 in occupancy and equipment expense due to the net effects of our branch consolidation and real estate strategy.

Partially offset by:

• An increase of $1.8 million in loan and lease related expenses due to second quarter loan and lease growth and recapture of government guaranteed loan expenses during the first quarter of 2022.

Our efficiency ratio was 55.29% for the second quarter of 2022 compared to 54.96% for the first quarter of 2022.

INCOME TAXES

We recorded income tax expense of $5.8 million during the second quarter of 2022, compared to $6.3 million during the first quarter of 2022. The effective tax rate was 22.3% and 22.0% for the second quarter of 2022 and first quarter of 2022, respectively. The effective tax rate is a result of tax benefits related to share-based compensation.

STATEMENTS OF FINANCIAL CONDITION

Total assets were $7.1 billion at June 30, 2022, an increase of $297.1 million compared to $6.8 billion at March 31, 2022.

The current quarter increase was primarily due to:

• An increase in net loans and leases of $376.0 million primarily due to growth in originated commercial real estate and commercial and industrial loans.

Partially offset by:

• A decrease in securities available-for-sale of $96.2 million primarily due to changes in market values.

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

		June 30, 2022								March 31, 2022								June 30, 2021
(dollars in thousands)		Amount				% of Total				Amount				% of Total				Amount				% of Total
Originated loans and leases
Commercial real estate		$	1,672,438				32.4	%		$	1,527,920				31.9	%		$	1,156,824				25.9	%
Residential real estate			401,095				7.7	%			399,638				8.3	%			389,758				8.7	%
Construction, land development, and other land			434,132				8.4	%			351,519				7.3	%			271,710				6.1	%
Commercial and industrial			1,861,582				36.0	%			1,698,025				35.5	%			1,350,471				30.2	%
Paycheck Protection Program			10,391				0.2	%			36,260				0.8	%			476,282				10.7	%
Installment and other			926				0.0	%			945				0.0	%			982				0.0	%
Leasing financing receivables			438,379				8.5	%			379,527				7.9	%			267,300				6.0	%
Total originated loans and leases		$	4,818,943				93.2	%		$	4,393,834				91.7	%		$	3,913,327				87.6	%
Acquired impaired loans
Commercial real estate		$	60,075				1.2	%		$	67,092				1.4	%		$	91,313				2.0	%
Residential real estate			39,902				0.8	%			47,347				1.0	%			67,401				1.5	%
Construction, land development, and other land			1,184				0.0	%			1,357				0.0	%			2,008				0.0	%
Commercial and industrial			3,232				0.1	%			3,792				0.1	%			7,444				0.2	%
Installment and other			157				0.0	%			163				0.0	%			180				0.0	%
Total acquired impaired loans		$	104,550				2.1	%		$	119,751				2.5	%		$	168,346				3.7	%
Acquired non-impaired loans and leases
Commercial real estate		$	167,425				3.2	%		$	184,353				3.8	%		$	254,739				5.6	%
Residential real estate			40,174				0.8	%			47,735				1.0	%			65,119				1.5	%
Construction, land development, and other land			191				0.0	%			196				0.1	%			208				0.0	%
Commercial and industrial			32,569				0.6	%			37,794				0.8	%			58,320				1.3	%
Installment and other			227				0.0	%			248				0.0	%			311				0.0	%
Leasing financing receivables			3,992				0.1	%			5,157				0.1	%			9,087				0.3	%
Total acquired non-impaired loans and leases		$	244,578				4.7	%		$	275,483				5.8	%		$	387,784				8.7	%
Total loans and leases		$	5,168,071				100.0	%		$	4,789,068				100.0	%		$	4,469,457				100.0	%
Allowance for loan and lease losses			(62,436	)							(59,458	)							(61,719	)
Total loans and leases, net of allowance for loan and lease losses		$	5,105,635							$	4,729,610							$	4,407,738

PPP loans outstanding were $10.4 million as of June 30, 2022, compared with $36.3 million as of March 31, 2022. The decreased was as a result of forgiveness of PPP loans. Forgiveness for the second quarter 2022 was $25.9 million compared to $73.7 million for the first quarter of 2022. As of June 30, 2022, 115 PPP loans remain outstanding, and more than 97% of PPP loan balances have been forgiven.

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:

														June 30, 2022
														Change from
(dollars in thousands)		June 30, 2022				March 31, 2022				June 30, 2021				March 31, 2022				June 30, 2021
Non-performing assets:
Non-accrual loans and leases		$	33,944			$	20,277			$	35,514				67.4	%			(4.4	)%
Past due loans and leases 90 days or more and still accruing interest			—				—				—			—%				—%
Total non-performing loans and leases		$	33,944			$	20,277			$	35,514				67.4	%			(4.4	)%
Other real estate owned			4,749				2,221				4,417				113.8	%			7.5	%
Total non-performing assets		$	38,693			$	22,498			$	39,931				72.0	%			(3.1	)%
Accruing troubled debt restructured loans (1)		$	1,358			$	1,456			$	2,395				(6.7	)%			(43.3	)%
Total non-performing loans and leases as a percentage of total loans and leases			0.66	%			0.42	%			0.79	%
Total non-performing assets as a percentage of total assets			0.54	%			0.33	%			0.61	%
Allowance for loan and lease losses as a percentage of non-performing loans and leases			183.94	%			293.23	%			173.79	%
Non-performing assets guaranteed by U.S. government:
Non-accrual loans guaranteed		$	1,731			$	1,832			$	5,847				(5.5	)%			(70.4	)%
Past due loans 90 days or more and still accruing interest guaranteed			—				—				—			—%				—%
Total non-performing loans guaranteed		$	1,731			$	1,832			$	5,847				(5.5	)%			(70.4	)%
Accruing troubled debt restructured loans guaranteed (1)		$	—			$	—			$	—			—%				—%
Total non-performing loans and leases not guaranteed as a percentage of total loans and leases			0.62	%			0.39	%			0.66	%
Total non-performing assets not guaranteed as a percentage of total assets			0.52	%			0.30	%			0.52	%

(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 $33.9 million at June 30, 2022, an increase of $13.7 million from $20.3 million at March 31, 2022 primarily due to one conventional non-performing relationship.
• Other real estate owned was $4.7 million at June 30, 2022, an increase of $2.5 million from $2.2 million at March 31, 2022, primarily due to the transfer of one property into other real estate owned.

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)		2022				2022				2021
Allowance for loan and lease losses, beginning of period		$	59,458			$	55,012			$	65,590
Provision/(recapture) for loan and lease losses			5,908				4,995				(1,969	)
Net charge-offs of loans and leases			(2,930	)			(549	)			(1,902	)
Allowance for loan and lease losses, end of period		$	62,436			$	59,458			$	61,719
Allowance for loan and lease losses to period end total loans and leases held for investment			1.21	%			1.24	%			1.38	%
Net charge-offs to average total loans and leases held for investment, net before ALLL			0.24	%			0.05	%			0.17	%
Provision/(recapture) for loan and lease losses to net charge-offs during the period			2.02	x			9.09	x		(1.04)x

The allowance for loan and lease losses as a percentage of total loans and leases held for investment decreased to 1.21% at June 30, 2022 compared to 1.24% at March 31, 2022, primarily due to growth in the loan and lease portfolio, as well as the change in the mix of the portfolio.

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. 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 second quarter of 2022 were $2.9 million, or 0.23% of average loans and leases, on an annualized basis, an increase of $2.4 million compared to $549,000, or 0.05% of average loans and leases, during the first quarter of 2022, and an increase of $1.0 million from $1.9 million or 0.17% of average loans and leases from the comparable period a year ago.

Net charge-offs for the second quarter of 2022 included $2.7 million in the unguaranteed portion of U.S. government guaranteed loans, while net charge-offs for the first quarter of 2022 and second quarter of 2021 included $362,000 and $1.6 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:

														June 30, 2022 Change from
(dollars in thousands)		June 30, 2022				March 31, 2022				June 30, 2021				March 31, 2022				June 30, 2021
Non-interest-bearing demand deposits		$	2,180,927			$	2,281,612			$	2,089,455				(4.4	)%			4.4	%
Interest-bearing checking accounts			535,856				596,497				653,558				(10.2	)%			(18.0	)%
Money market demand accounts			1,323,287				1,357,679				1,023,675				(2.5	)%			29.3	%
Other savings			669,164				659,218				613,136				1.5	%			9.1	%
Time deposits (below $250,000)			544,759				505,141				567,469				7.8	%			(4.0	)%
Time deposits ($250,000 and above)			134,384				129,955				144,902				3.4	%			(7.3	)%
Total deposits		$	5,388,377			$	5,530,102			$	5,092,195				(2.6	)%			5.8	%

Total deposits decreased to $5.4 billion at June 30, 2022 compared to $5.5 billion at March 31, 2022. Non-interest-bearing deposits were 40.5% and 41.3% of total deposits at June 30, 2022 and March 31, 2022, respectively.

The decrease in the current quarter was primarily due to:

• A decrease in non-interest-bearing deposits of $100.7 million, primarily due to decreases in commercial deposits; and
• A decrease in interest-bearing checking accounts of $60.6 million, driven primarily by decreases in business accounts.

Partially offset by:

• An increase in time deposits of $44.0 million, principally driven by an increase in brokered deposits.

Total borrowings and other liabilities were $978.2 million at June 30, 2022, an increase of $462.3 million from $515.9 million at March 31, 2022, primarily driven by a $370.0 million increase in FHLB advances and a $45.0 million increase in federal funds purchased.

Stockholders’ Equity

Total stockholders’ equity was $765.2 million at June 30, 2022, a decrease of $23.5 million from $788.7 million at March 31, 2022. The decrease was primarily due to an increase in accumulated other comprehensive loss, and the repurchase of shares of our common stock under the Company's stock repurchase program. These were offset by an increase to retained earnings.

Under its stock repurchase program, the Company repurchased an aggregate 232,000 shares of its common stock at an average price of $23.84 per share during the second quarter of 2022.

The following table presents actual regulatory capital dollar amounts and ratios of the Company and Byline Bank as of June 30, 2022:

		Actual								Minimum Capital Required								Required to be Considered Well Capitalized
June 30, 2022		Amount				Ratio				Amount				Ratio				Amount				Ratio
Total capital to risk weighted assets:
Company		$	853,822				13.09	%		$	521,687				8.00	%		N/A				N/A
Bank			801,925				12.34	%			519,994				8.00	%		$	649,992				10.00	%
Tier 1 capital to risk weighted assets:
Company		$	714,195				10.95	%		$	391,265				6.00	%		N/A				N/A
Bank		$	737,298				11.34	%			389,995				6.00	%		$	519,994				8.00	%
Common Equity Tier 1 (CET1) to risk weighted assets:
Company		$	669,195				10.26	%		$	293,449				4.50	%		N/A				N/A
Bank			737,298				11.34	%			292,496				4.50	%		$	422,495				6.50	%
Tier 1 capital to average assets:
Company		$	714,195				10.34	%		$	276,366				4.00	%		N/A				N/A
Bank			737,298				10.68	%		$	276,159				4.00	%		$	345,199				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 29, 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 761227. A recorded replay can be accessed through August 12, 2022 by dialing (866) 813-9403; passcode: 015913.

A slide presentation relating to our second quarter 2022 results will be accessible prior to the conference call. The slide presentation and webcast of the conference call can be accessed on our investor relations website at www.bylinebancorp.com.

About Byline Bancorp, Inc.

Headquartered in Chicago, Byline Bancorp, Inc. is the parent company for Byline Bank, a full service commercial bank serving small- and medium-sized businesses, financial sponsors, and consumers. Byline Bank has approximately $7.1 billion in assets and operates more than 30 full service branch locations throughout the Chicago and Milwaukee metropolitan areas. Byline Bank offers a broad range of commercial and retail banking products and services including small ticket equipment leasing solutions and is one of the top 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.

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

Certain risks and important factors that could affect Byline’s future results are identified in our Annual Report on Form 10-K and other reports we file with the Securities and Exchange Commission, including among other things under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021. Any forward-looking statement speaks only as of the date on which it is made, and Byline undertakes no obligation to update any forward-looking statement, whether to reflect events or circumstances after the date on which the statement is made, to reflect new information or the occurrence of unanticipated events, or otherwise unless required under the federal securities laws.

BYLINE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)
		June 30,				March 31,				December 31,				September 30,				June 30,
(dollars in thousands)		2022				2022				2021				2021				2021
ASSETS
Cash and due from banks		$	58,844			$	48,015			$	35,247			$	46,900			$	50,558
Interest bearing deposits with other banks			83,057				105,564				122,684				95,978				52,138
Cash and cash equivalents			141,901				153,579				157,931				142,878				102,696
Equity and other securities, at fair value			7,860				10,677				10,578				10,299				10,575
Securities available-for-sale, at fair value			1,273,138				1,369,368				1,454,542				1,427,605				1,495,789
Securities held-to-maturity, at amortized cost			3,880				3,882				3,885				3,887				3,890
Restricted stock, at cost			30,002				13,977				22,002				15,927				11,927
Loans held for sale			17,284				39,520				64,460				48,372				25,046
Loans and leases:
Loans and leases			5,168,071				4,789,068				4,537,128				4,609,228				4,469,457
Allowance for loan and lease losses			(62,436	)			(59,458	)			(55,012	)			(60,598	)			(61,719	)
Net loans and leases			5,105,635				4,729,610				4,482,116				4,548,630				4,407,738
Servicing assets, at fair value			22,155				24,497				23,744				23,597				24,683
Premises and equipment, net			60,773				62,281				62,548				76,995				80,482
Other real estate owned, net			4,749				2,221				2,112				3,033				4,417
Goodwill and other intangible assets, net			162,094				163,962				165,558				167,296				169,034
Bank-owned life insurance			81,100				80,604				80,039				60,992				60,628
Deferred tax assets, net			78,950				67,335				50,329				45,165				43,127
Accrued interest receivable and other assets			142,196				113,123				116,328				129,775				100,570
Total assets		$	7,131,717			$	6,834,636			$	6,696,172			$	6,704,451			$	6,540,602
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Non-interest-bearing demand deposits		$	2,180,927			$	2,281,612			$	2,158,420			$	2,117,749			$	2,089,455
Interest-bearing deposits			3,207,450				3,248,490				2,996,627				3,040,529				3,002,740
Total deposits			5,388,377				5,530,102				5,155,047				5,158,278				5,092,195
Other borrowings			748,092				311,450				519,723				539,119				446,836
Subordinated notes, net			73,604				73,560				73,517				73,473				73,429
Junior subordinated debentures issued to capital trusts, net			37,123				37,011				36,906				36,796				36,682
Accrued expenses and other liabilities			119,360				93,842				74,597				72,367				74,387
Total liabilities			6,366,556				6,045,965				5,859,790				5,880,033				5,723,529
STOCKHOLDERS’ EQUITY
Preferred stock			—				—				10,438				10,438				10,438
Common stock			388				388				387				386				385
Additional paid-in capital			595,938				595,006				593,753				592,192				590,422
Retained earnings			307,278				290,397				271,676				258,077				236,363
Treasury stock			(47,181	)			(40,732	)			(31,570	)			(31,161	)			(20,712	)
Accumulated other comprehensive income (loss), net of tax			(91,262	)			(56,388	)			(8,302	)			(5,514	)			177
Total stockholders’ equity			765,161				788,671				836,382				824,418				817,073
Total liabilities and stockholders’ equity		$	7,131,717			$	6,834,636			$	6,696,172			$	6,704,451			$	6,540,602

BYLINE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
		Three Months Ended																				Six Months Ended
(dollars in thousands,		June 30,				March 31,				December 31,				September 30,				June 30,				June 30,				June 30,
except per share data)		2022				2022				2021				2021				2021				2022				2021
INTEREST AND DIVIDEND INCOME
Interest and fees on loans and leases		$	59,674			$	55,426			$	58,570			$	56,291			$	54,324			$	115,100			$	108,132
Interest on securities			6,264				6,155				5,619				5,534				6,359				12,419				12,448
Other interest and dividend income			608				237				495				947				628				845				890
Total interest and dividend income			66,546				61,818				64,684				62,772				61,311				128,364				121,470
INTEREST EXPENSE
Deposits			2,128				1,087				1,037				986				1,058				3,215				2,479
Other borrowings			1,097				395				330				349				482				1,492				984
Subordinated notes and debentures			1,694				1,600				1,589				1,592				1,597				3,294				3,193
Total interest expense			4,919				3,082				2,956				2,927				3,137				8,001				6,656
Net interest income			61,627				58,736				61,728				59,845				58,174				120,363				114,814
PROVISION/(RECAPTURE) FOR LOAN AND LEASE LOSSES			5,908				4,995				(1,293	)			352				(1,969	)			10,903				2,398
Net interest income after provision/(recapture) for loan and lease losses			55,719				53,741				63,021				59,493				60,143				109,460				112,416
NON-INTEREST INCOME
Fees and service charges on deposits			2,059				1,884				1,955				1,867				1,768				3,943				3,432
Loan servicing revenue			3,384				3,380				3,392				3,344				3,188				6,764				5,957
Loan servicing asset revaluation			(4,636	)			(1,231	)			(2,510	)			(2,650	)			7				(5,867	)			(1,498	)
ATM and interchange fees			1,131				1,049				1,219				1,201				1,044				2,180				2,056
Net realized gains (losses) on securities available-for-sale			52				—				(21	)			130				(136	)			52				1,326
Change in fair value of equity securities, net			(697	)			(35	)			(98	)			(275	)			517				(732	)			311
Net gains on sales of loans			9,983				10,827				12,924				12,761				12,270				20,810				20,589
Wealth management and trust income			900				1,048				764				815				722				1,948				1,490
Other non-interest income			1,985				2,504				1,389				1,302				1,622				4,489				3,081
Total non-interest income			14,161				19,426				19,014				18,495				21,002				33,587				36,744
NON-INTEREST EXPENSE
Salaries and employee benefits			27,697				28,959				28,850				25,978				24,588				56,656				46,394
Occupancy and equipment expense, net			4,409				5,128				4,995				4,982				4,856				9,537				10,635
Impairment charge on assets held for sale			—				—				8,351				1,434				1,943				—				2,547
Loan and lease related expenses			942				(891	)			2,328				1,175				1,503				51				2,454
Legal, audit, and other professional fees			1,820				2,600				2,376				2,710				2,898				4,420				5,112
Data processing			3,396				3,186				3,070				3,108				2,847				6,582				5,602
Net loss recognized on other real estate owned and other related expenses			158				54				26				42				389				212				1,010
Other intangible assets amortization expense			1,868				1,596				1,738				1,738				1,848				3,464				3,597
Other non-interest expense			3,483				3,923				7,234				3,013				2,109				7,406				4,472
Total non-interest expense			43,773				44,555				58,968				44,180				42,981				88,328				81,823
INCOME BEFORE PROVISION FOR INCOME TAXES			26,107				28,612				23,067				33,808				38,164				54,719				67,337
PROVISION FOR INCOME TAXES			5,824				6,301				5,878				8,502				9,672				12,125				17,047
NET INCOME			20,283				22,311				17,189				25,306				28,492				42,594				50,290
Dividends on preferred shares			—				196				196				196				195				196				391
INCOME AVAILABLE TO COMMON STOCKHOLDERS		$	20,283			$	22,115			$	16,993			$	25,110			$	28,297			$	42,398			$	49,899
EARNINGS PER COMMON SHARE
Basic		$	0.55			$	0.60			$	0.46			$	0.68			$	0.75			$	1.14			$	1.31
Diluted		$	0.54			$	0.58			$	0.45			$	0.66			$	0.73			$	1.12			$	1.29

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	June 30,				March 31,				December 31,				September 30,				June 30,				June 30,				June 30,
and per share data)	2022				2022				2021				2021				2021				2022				2021
Earnings per Common Share
Basic earnings per common share	$	0.55			$	0.60			$	0.46			$	0.68			$	0.75			$	1.14			$	1.31
Diluted earnings per common share	$	0.54			$	0.58			$	0.45			$	0.66			$	0.73			$	1.12			$	1.29
Adjusted diluted earnings per common share(2)(3)(4)	$	0.54			$	0.58			$	0.69			$	0.69			$	0.77			$	1.12			$	1.34
Weighted average common shares outstanding (basic)		37,064,795				37,123,161				37,124,176				37,200,778				37,965,658				37,093,816				38,064,381
Weighted average common shares outstanding (diluted)		37,612,268				38,042,822				37,999,401				38,018,301				38,696,036				37,740,682				38,773,018
Common shares outstanding		37,669,102				37,811,582				37,713,903				37,690,087				38,094,972				37,669,102				38,094,972
Cash dividends per common share	$	0.09			$	0.09			$	0.09			$	0.09			$	0.06			$	0.18			$	0.12
Dividend payout ratio on common stock		16.67	%			15.52	%			20.00	%			13.64	%			8.22	%			16.07	%			9.30	%
Tangible book value per common share(1)	$	16.01			$	16.52			$	17.51			$	17.16			$	16.74			$	16.01			$	16.74
Key Ratios and Performance Metrics (annualized where applicable)
Net interest margin, fully taxable equivalent (1)(5)		3.77	%			3.82	%			3.97	%			3.92	%			3.76	%			3.80	%			3.77	%
Average cost of deposits		0.16	%			0.08	%			0.08	%			0.08	%			0.08	%			0.12	%			0.10	%
Efficiency ratio(2)		55.29	%			54.96	%			70.88	%			54.18	%			51.95	%			55.12	%			51.61	%
Adjusted efficiency ratio(1)(2)(3)		55.29	%			54.96	%			55.46	%			52.35	%			49.50	%			55.12	%			49.93	%
Non-interest expense to average assets		2.52	%			2.69	%			3.49	%			2.67	%			2.57	%			2.60	%			2.48	%
Adjusted non-interest expense to average assets(1)(3)		2.52	%			2.69	%			2.76	%			2.58	%			2.45	%			2.60	%			2.40	%
Return on average stockholders' equity		10.42	%			10.87	%			8.13	%			12.19	%			14.10	%			10.65	%			12.54	%
Adjusted return on average stockholders' equity(1)(3)(4)		10.42	%			10.87	%			12.42	%			12.69	%			14.80	%			10.65	%			13.01	%
Return on average assets		1.17	%			1.35	%			1.02	%			1.53	%			1.70	%			1.26	%			1.52	%
Adjusted return on average assets(1)(3)(4)		1.17	%			1.35	%			1.56	%			1.59	%			1.78	%			1.26	%			1.58	%
Non-interest income to total revenues(1)		18.69	%			24.85	%			23.55	%			23.61	%			26.53	%			21.82	%			24.24	%
Pre-tax pre-provision return on average assets(1)		1.84	%			2.03	%			1.29	%			2.07	%			2.16	%			1.93	%			2.11	%
Adjusted pre-tax pre-provision return on average assets(1)(3)		1.84	%			2.03	%			2.03	%			2.15	%			2.28	%			1.93	%			2.19	%
Return on average tangible common stockholders' equity(1)		14.06	%			14.36	%			10.94	%			16.22	%			18.87	%			14.21	%			16.88	%
Adjusted return on average tangible common stockholders' equity(1)(3)		14.06	%			14.36	%			16.38	%			16.86	%			19.77	%			14.21	%			17.48	%
Non-interest-bearing deposits to total deposits		40.47	%			41.26	%			41.87	%			41.06	%			41.03	%			40.47	%			41.03	%
Loans and leases held for sale and loans and lease held for investment to total deposits		96.23	%			87.31	%			89.26	%			90.29	%			88.26	%			96.23	%			88.26	%
Deposits to total liabilities		84.64	%			91.47	%			87.97	%			87.73	%			88.97	%			84.64	%			88.97	%
Deposits per branch	$	141,799			$	125,684			$	117,160			$	117,234			$	115,732			$	141,799			$	115,732
Asset Quality Ratios
Non-performing loans and leases to total loans and leases held for investment, net before ALLL		0.66	%			0.42	%			0.51	%			0.75	%			0.79	%			0.66	%			0.79	%
ALLL to total loans and leases held for investment, net before ALLL		1.21	%			1.24	%			1.21	%			1.31	%			1.38	%			1.21	%			1.38	%
Net charge-offs to average total loans and leases held for investment, net before ALLL		0.24	%			0.05	%			0.37	%			0.13	%			0.17	%			0.15	%			0.32	%
Acquisition accounting adjustments(4)	$	3,050			$	3,364			$	4,769			$	6,327			$	9,393			$	3,050			$	9,393
Capital Ratios
Common equity to total assets		10.73	%			11.54	%			12.33	%			12.14	%			12.33	%			10.73	%			12.33	%
Tangible common equity to tangible assets(1)		8.65	%			9.36	%			10.11	%			9.89	%			10.01	%			8.65	%			10.01	%
Leverage ratio		10.34	%			10.70	%			10.89	%			11.21	%			10.82	%			10.34	%			10.82	%
Common equity tier 1 capital ratio		10.26	%			10.75	%			11.39	%			11.32	%			11.97	%			10.26	%			11.97	%
Tier 1 capital ratio		10.95	%			11.49	%			12.37	%			12.32	%			13.05	%			10.95	%			13.05	%
Total capital ratio		13.09	%			13.72	%			14.70	%			14.78	%			15.74	%			13.09	%			15.74	%

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

BYLINE BANCORP, INC. AND SUBSIDIARIES
YEAR-TO-DATE STATEMENT OF AVERAGE INTEREST-EARNING ASSETS AND AVERAGE INTEREST-BEARING LIABILITIES (unaudited)
		For the Six Months Ended June 30,
		2022												2021
(dollars in thousands)		Average Balance(5)				Interest Inc / Exp				Average Yield / Rate				Average Balance(5)				Interest Inc / Exp				Average Yield / Rate
ASSETS
Cash and cash equivalents		$	70,404			$	103				0.29	%		$	65,484			$	56				0.17	%
Loans and leases(1)			4,840,510				115,100				4.80	%			4,461,884				108,132				4.89	%
Taxable securities			1,334,747				11,379				1.72	%			1,453,976				11,326				1.57	%
Tax-exempt securities(2)			169,107				2,255				2.69	%			183,689				2,475				2.72	%
Total interest-earning assets		$	6,414,768			$	128,837				4.05	%		$	6,165,033			$	121,989				3.99	%
Allowance for loan and lease losses			(57,895	)											(66,415	)
All other assets			484,728												555,877
TOTAL ASSETS		$	6,841,601											$	6,654,495
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Interest checking		$	597,665			$	593				0.20	%		$	587,030			$	419				0.14	%
Money market accounts			1,281,519				1,668				0.26	%			1,087,964				660				0.12	%
Savings			657,155				159				0.05	%			592,350				139				0.05	%
Time deposits			644,543				795				0.25	%			747,366				1,261				0.34	%
Total interest-bearing deposits			3,180,882				3,215				0.20	%			3,014,710				2,479				0.17	%
Other borrowings			394,385				1,478				0.76	%			646,093				984				0.31	%
Federal funds purchased			1,271				14				2.32	%			—				—				0.00	%
Subordinated notes and debentures			110,570				3,294				6.01	%			109,945				3,193				5.86	%
Total borrowings			506,226				4,786				1.91	%			756,038				4,177				1.11	%
Total interest-bearing liabilities		$	3,687,108			$	8,001				0.44	%		$	3,770,748			$	6,656				0.36	%
Non-interest-bearing demand deposits			2,256,778												2,005,213
Other liabilities			91,451												70,052
Total stockholders’ equity			806,264												808,482
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	6,841,601											$	6,654,495
Net interest spread(3)											3.61	%											3.63	%
Net interest income, fully taxable equivalent						$	120,836											$	115,333
Net interest margin, fully taxable equivalent(2)(4)											3.80	%											3.77	%
Tax-equivalent adjustment							(473	)			0.02	%							(519	)			0.01	%
Net interest income						$	120,363											$	114,814
Net interest margin(4)											3.78	%											3.76	%
Net loan accretion impact on margin						$	2,859				0.09	%						$	3,363				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.

BYLINE BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)

Non-GAAP Financial Measures

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

		As of or For the Three Months Ended																				As of or For the Six Months Ended
		June 30,				March 31,				December 31,				September 30,				June 30,				June 30,				June 30,
(dollars in thousands, except per share data)		2022				2022				2021				2021				2021				2022				2021
Net income and earnings per share excluding significant items
Reported Net Income		$	20,283			$	22,311			$	17,189			$	25,306			$	28,492			$	42,594			$	50,290
Significant items:
Impairment charges on assets held for sale and ROU asset			—				—				12,449				1,434				1,943				—				2,547
Tax benefit			—				—				(3,377	)			(390	)			(530	)			—				(695	)
Adjusted Net Income		$	20,283			$	22,311			$	26,261			$	26,350			$	29,905			$	42,594			$	52,142
Reported Diluted Earnings per Share		$	0.54			$	0.58			$	0.45			$	0.66			$	0.73			$	1.12			$	1.29
Significant items:
Impairment charges on assets held for sale and ROU asset			—				—				0.33				0.04				0.05				—				0.07
Tax benefit			—				—				(0.09	)			(0.01	)			(0.01	)			—				(0.02	)
Adjusted Diluted Earnings per Share		$	0.54			$	0.58			$	0.69			$	0.69			$	0.77			$	1.12			$	1.34

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,		June 30,				March 31,				December 31,				September 30,				June 30,				June 30,				June 30,
ratios annualized, where applicable)		2022				2022				2021				2021				2021				2022				2021
Adjusted non-interest expense:
Non-interest expense		$	43,773			$	44,555			$	58,968			$	44,180			$	42,981			$	88,328			$	81,823
Less: Significant items
Impairment charges on assets held for sale and ROU asset			—				—				12,449				1,434				1,943				—				2,547
Adjusted non-interest expense		$	43,773			$	44,555			$	46,519			$	42,746			$	41,038			$	88,328			$	79,276
Adjusted non-interest expense excluding amortization of intangible assets:
Adjusted non-interest expense		$	43,773			$	44,555			$	46,519			$	42,746			$	41,038			$	88,328			$	79,276
Less: Amortization of intangible assets			1,868				1,596				1,738				1,738				1,848				3,464				3,597
Adjusted non-interest expense excluding amortization of intangible assets		$	41,905			$	42,959			$	44,781			$	41,008			$	39,190			$	84,864			$	75,679
Pre-tax pre-provision net income:
Pre-tax income		$	26,107			$	28,612			$	23,067			$	33,808			$	38,164			$	54,719			$	67,337
Add: Provision/(recapture) for loan and lease losses			5,908				4,995				(1,293	)			352				(1,969	)			10,903				2,398
Pre-tax pre-provision net income		$	32,015			$	33,607			$	21,774			$	34,160			$	36,195			$	65,622			$	69,735
Adjusted pre-tax pre-provision net income:
Pre-tax pre-provision net income		$	32,015			$	33,607			$	21,774			$	34,160			$	36,195			$	65,622			$	69,735
Impairment charges on assets held for sale and ROU asset			—				—				12,449				1,434				1,943				—				2,547
Adjusted pre-tax pre-provision net income		$	32,015			$	33,607			$	34,223			$	35,594			$	38,138			$	65,622			$	72,282
Tax equivalent net interest income
Net interest income		$	61,627			$	58,736			$	61,728			$	59,845			$	58,174			$	120,363			$	114,814
Add: Tax-equivalent adjustment			237				236				256				264				269				473				519
Net interest income, fully taxable equivalent		$	61,864			$	58,972			$	61,984			$	60,109			$	58,443			$	120,836			$	115,333
Total revenue:
Net interest income		$	61,627			$	58,736			$	61,728			$	59,845			$	58,174			$	120,363			$	114,814
Add: Non-interest income			14,161				19,426				19,014				18,495				21,002				33,587				36,744
Total revenue		$	75,788			$	78,162			$	80,742			$	78,340			$	79,176			$	153,950			$	151,558
Tangible common stockholders' equity:
Total stockholders' equity		$	765,161			$	788,671			$	836,382			$	824,418			$	817,073			$	765,161			$	817,073
Less: Preferred stock			—				—				10,438				10,438				10,438				—				10,438
Less: Goodwill and other intangibles			162,094				163,962				165,558				167,296				169,034				162,094				169,034
Tangible common stockholders' equity		$	603,067			$	624,709			$	660,386			$	646,684			$	637,601			$	603,067			$	637,601
Tangible assets:
Total assets		$	7,131,717			$	6,834,636			$	6,696,172			$	6,704,451			$	6,540,602			$	7,131,717			$	6,540,602
Less: Goodwill and other intangibles			162,094				163,962				165,558				167,296				169,034				162,094				169,034
Tangible assets		$	6,969,623			$	6,670,674			$	6,530,614			$	6,537,155			$	6,371,568			$	6,969,623			$	6,371,568
Average tangible common stockholders' equity:
Average total stockholders' equity		$	780,652			$	832,161			$	838,975			$	823,754			$	810,490			$	806,264			$	808,482
Less: Average preferred stock			—				9,974				10,438				10,438				10,438				4,959				10,438
Less: Average goodwill and other intangibles			163,068				164,837				166,396				168,140				169,906				163,948				170,845
Average tangible common stockholders' equity		$	617,584			$	657,350			$	662,141			$	645,176			$	630,146			$	637,357			$	627,199
Average tangible assets:
Average total assets		$	6,975,725			$	6,705,986			$	6,699,069			$	6,560,868			$	6,720,492			$	6,841,601			$	6,654,495
Less: Average goodwill and other intangibles			163,068				164,837				166,396				168,140				169,906				163,948				170,845
Average tangible assets		$	6,812,657			$	6,541,149			$	6,532,673			$	6,392,728			$	6,550,586			$	6,677,653			$	6,483,650
Tangible net income available to common stockholders:
Net income available to common stockholders		$	20,283			$	22,115			$	16,993			$	25,110			$	28,297			$	42,398			$	49,899
Add: After-tax intangible asset amortization			1,361				1,163				1,266				1,265				1,344				2,524				2,616
Tangible net income available to common stockholders		$	21,644			$	23,278			$	18,259			$	26,375			$	29,641			$	44,922			$	52,515
Adjusted tangible net income available to common stockholders:
Tangible net income available to common stockholders		$	21,644			$	23,278			$	18,259			$	26,375			$	29,641			$	44,922			$	52,515
Impairment charges on assets held for sale and ROU asset			—				—				12,449				1,434				1,943				—				2,547
Tax benefit on significant items			—				—				(3,377	)			(390	)			(530	)			—				(695	)
Adjusted tangible net income available to common stockholders		$	21,644			$	23,278			$	27,331			$	27,419			$	31,054			$	44,922			$	54,367

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,				March 31,				December 31,				September 30,				June 30,				June 30,				June 30,
		2022				2022				2021				2021				2021				2022				2021
Pre-tax pre-provision return on average assets:
Pre-tax pre-provision net income		$	32,015			$	33,607			$	21,774			$	34,160			$	36,195			$	65,622			$	69,735
Average total assets			6,975,725				6,705,986				6,699,069				6,560,868				6,720,492				6,841,601				6,654,495
Pre-tax pre-provision return on average assets			1.84	%			2.03	%			1.29	%			2.07	%			2.16	%			1.93	%			2.11	%
Adjusted pre-tax pre-provision return on average assets:
Adjusted pre-tax pre-provision net income		$	32,015			$	33,607			$	34,223			$	35,594			$	38,138			$	65,622			$	72,282
Average total assets			6,975,725				6,705,986				6,699,069				6,560,868				6,720,492				6,841,601				6,654,495
Adjusted pre-tax pre-provision return on average assets			1.84	%			2.03	%			2.03	%			2.15	%			2.28	%			1.93	%			2.19	%
Net interest margin, fully taxable equivalent
Net interest income, fully taxable equivalent		$	61,864			$	58,972			$	61,984			$	60,109			$	58,443			$	120,836			$	115,333
Total average interest-earning assets			6,573,878				6,253,889				6,189,762				6,076,065				6,231,616				6,414,768				6,165,033
Net interest margin, fully taxable equivalent			3.77	%			3.82	%			3.97	%			3.92	%			3.76	%			3.80	%			3.77	%
Non-interest income to total revenues:
Non-interest income		$	14,161			$	19,426			$	19,014			$	18,495			$	21,002			$	33,587			$	36,744
Total revenues			75,788				78,162				80,742				78,340				79,176				153,950				151,558
Non-interest income to total revenues			18.69	%			24.85	%			23.55	%			23.61	%			26.53	%			21.82	%			24.24	%
Adjusted non-interest expense to average assets:
Adjusted non-interest expense		$	43,773			$	44,555			$	46,519			$	42,746			$	41,038			$	88,328			$	79,276
Average total assets			6,975,725				6,705,986				6,699,069				6,560,868				6,720,492				6,841,601				6,654,495
Adjusted non-interest expense to average assets			2.52	%			2.69	%			2.76	%			2.58	%			2.45	%			2.60	%			2.40	%
Adjusted efficiency ratio:
Adjusted non-interest expense excluding amortization of intangible assets		$	41,905			$	42,959			$	44,781			$	41,008			$	39,190			$	84,864			$	75,679
Total revenues			75,788				78,162				80,742				78,340				79,176				153,950				151,558
Adjusted efficiency ratio			55.29	%			54.96	%			55.46	%			52.35	%			49.50	%			55.12	%			49.93	%
Adjusted return on average assets:
Adjusted net income		$	20,283			$	22,311			$	26,261			$	26,350			$	29,905			$	42,594			$	52,142
Average total assets			6,975,725				6,705,986				6,699,069				6,560,868				6,720,492				6,841,601				6,654,495
Adjusted return on average assets			1.17	%			1.35	%			1.56	%			1.59	%			1.78	%			1.26	%			1.58	%
Adjusted return on average stockholders' equity:
Adjusted net income		$	20,283			$	22,311			$	26,261			$	26,350			$	29,905			$	42,594			$	52,142
Average stockholders' equity			780,652				832,161				838,975				823,754				810,490				806,264				808,482
Adjusted return on average stockholders' equity			10.42	%			10.87	%			12.42	%			12.69	%			14.80	%			10.65	%			13.01	%
Tangible common equity to tangible assets:
Tangible common equity		$	603,067			$	624,709			$	660,386			$	646,684			$	637,601			$	603,067			$	637,601
Tangible assets			6,969,623				6,670,674				6,530,614				6,537,155				6,371,568				6,969,623				6,371,568
Tangible common equity to tangible assets			8.65	%			9.36	%			10.11	%			9.89	%			10.01	%			8.65	%			10.01	%
Return on average tangible common stockholders' equity:
Tangible net income available to common stockholders		$	21,644			$	23,278			$	18,259			$	26,375			$	29,641			$	44,922			$	52,515
Average tangible common stockholders' equity			617,584				657,350				662,141				645,176				630,146				637,357				627,199
Return on average tangible common stockholders' equity			14.06	%			14.36	%			10.94	%			16.22	%			18.87	%			14.21	%			16.88	%
Adjusted return on average tangible common stockholders' equity:
Adjusted tangible net income available to common stockholders		$	21,644			$	23,278			$	27,331			$	27,419			$	31,054			$	44,922			$	54,367
Average tangible common stockholders' equity			617,584				657,350				662,141				645,176				630,146				637,357				627,199
Adjusted return on average tangible common stockholders' equity			14.06	%			14.36	%			16.38	%			16.86	%			19.77	%			14.21	%			17.48	%
Tangible book value per share:
Tangible common equity		$	603,067			$	624,709			$	660,386			$	646,684			$	637,601			$	603,067			$	637,601
Common shares outstanding			37,669,102				37,811,582				37,713,903				37,690,087				38,094,972				37,669,102				38,094,972
Tangible book value per share		$	16.01			$	16.52			$	17.51			$	17.16			$	16.74			$	16.01			$	16.74

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220728005955/en/

Investors:

Brooks Rennie

Investor Relations Director

312-660-5805

brennie@bylinebank.com

Media:

Erin O’Neill

Marketing Director

773-475-2901

eoneill@bylinebank.com

Source: Byline Bancorp, Inc.

FAQ

What were Byline Bancorp's earnings results for Q2 2022?

Byline Bancorp reported a net income of $20.3 million, or $0.54 per diluted share, for Q2 2022.

How did Byline Bancorp's total revenue perform in Q2 2022?

Total revenue amounted to $75.8 million in Q2 2022, combining $61.6 million in net interest income and $14.2 million in non-interest income.

What is the status of Byline Bancorp's dividend declaration?

The Board declared a cash dividend of $0.09 per share, payable on August 23, 2022.

What was the loan and lease growth rate for Byline Bancorp in Q2 2022?

Loan and lease growth was strong at 34.2% annually, excluding PPP loans.

What challenges did Byline Bancorp face in Q2 2022?

The company experienced a decline in net income and a significant drop in non-interest income due to loan servicing asset revaluation charges.