Byline Bancorp, Inc. Reports Second Quarter 2024 Financial Results

Rhea-AI Summary

Byline Bancorp (NYSE: BY) reported strong Q2 2024 financial results, with net income of $29.7 million and diluted EPS of $0.68. Key highlights include:

- Net interest income increased 1.2% to $86.5 million
- Tax-equivalent net interest margin of 3.99%
- Non-interest expense decreased 1.1%
- Efficiency ratio of 52.19%
- Total loans and leases grew 6.1% annualized
- Total assets increased 9.5% annualized to $9.6 billion
- Non-performing assets decreased 24.0% to 0.67% of total assets

The company maintained a strong capital position and declared a cash dividend of $0.09 per share. Management expressed satisfaction with the overall performance and progress in becoming Chicago's preeminent commercial bank.

Positive

• Net income of $29.7 million, with diluted EPS of $0.68
• Net interest income increased 1.2% to $86.5 million
• Non-interest expense decreased 1.1%
• Total loans and leases grew 6.1% annualized
• Total assets increased 9.5% annualized to $9.6 billion
• Non-performing assets decreased 24.0% to 0.67% of total assets
• Maintained strong capital position with Common Equity Tier 1 ratio of 10.84%

Negative

• Net charge-offs increased to $9.5 million (0.56% of average loans and leases)
• Non-interest income decreased 17.0% to $12.8 million
• Efficiency ratio slightly increased to 52.19% from 51.94% in Q1 2024

Insights

Financial Analyst

Byline Bancorp's Q2 2024 results demonstrate solid performance with some notable strengths and areas of concern. Net income of $29.7 million and diluted EPS of $0.68 reflect steady profitability, though slightly down from Q1's $30.4 million and $0.70 EPS.

The bank's loan portfolio growth of $102.8 million (6.1% annualized) is encouraging, indicating strong demand and effective lending strategies. However, the flat deposit growth raises questions about funding stability and potential pressure on net interest margins.

The efficiency ratio of 52.19%, while slightly higher than Q1's 51.94%, remains commendable and reflects good cost management. The decrease in non-performing assets by $4.1 million (24.0% annualized) is a positive sign for asset quality.

A point of concern is the increase in net charge-offs to $9.5 million (0.56% of average loans annualized), up from $6.2 million in Q1. This warrants close monitoring, especially given the challenging economic environment.

Overall, Byline Bancorp shows resilience, but investors should watch for potential headwinds in deposit growth and credit quality in the coming quarters.

Market Research Analyst

Byline Bancorp's Q2 2024 results offer insights into broader banking sector trends. The bank's tax-equivalent net interest margin of 3.99%, down 2 basis points from Q1, reflects the ongoing industry-wide pressure on margins due to rising deposit costs and competition for funds.

The average cost of total deposits increasing by 7 basis points to 2.63% underscores the challenges banks face in a high-rate environment. This trend is likely to persist across the sector, potentially squeezing profitability.

Notably, non-interest-bearing demand deposits decreased to 25.0% of average total deposits from 25.9% in Q1. This shift towards interest-bearing accounts is a common theme in the current market, as customers seek higher yields.

The bank's strong loan growth amid economic uncertainties suggests resilience in commercial lending, particularly in the Chicago market. This could indicate broader economic strength in the region.

Byline's focus on expense management and branch consolidation (reducing branch footprint by ~60% since 2013) aligns with industry trends towards digital banking and operational efficiency. This strategy may provide a competitive edge in an increasingly challenging banking landscape.

Net income of $29.7 million, $0.68 diluted earnings per share

CHICAGO--(BUSINESS WIRE)-- Byline Bancorp, Inc. (NYSE: BY), today reported:

				For the quarter								Second Quarter Highlights (compared to 1Q24, unless otherwise specified)
			2Q24			1Q24			2Q23
Financial Results ($ in thousands)												• ROAA of 1.31%; PTPP ROAA of 2.03%(1)
	Net interest income		$	86,526		$	85,541		$	76,166
	Non-interest income			12,844			15,473			14,291		• TBV per share of $18.84(1), up 8.1% YoY
	Total Revenue(1)			99,370			101,014			90,457
	Non-interest expense (NIE)			53,210			53,809			49,328		• Named a "Best Company to Work For in the
	Pre-tax pre-provision net income (PTPP)(1)			46,160			47,205			41,129		Midwest" by US News and World Report
	Provision for credit losses			6,045			6,643			5,790
	Provision for income taxes			10,444			10,122			9,232		• Consolidated two branches, have reduced
	Net Income		$	29,671		$	30,440		$	26,107		branch footprint ~60% since 2013
Per Share												Income Statement
	Diluted EPS		$	0.68		$	0.70		$	0.70		• Net interest income of $86.5 million,
	Dividends declared per common share			0.09			0.09			0.09		up $985,000, or 1.2%
	Book value per share			23.38			22.88			21.56
	Tangible book value per share(1)			18.84			18.29			17.43		• Tax equivalent NIM of 3.99%(1)
Balance Sheet & Credit Quality ($ in thousands)												• NIE down 1.1%; NIE/AA 2.34%, down six bps
	Total deposits		$	7,347,181		$	7,350,202		$	5,917,092
	Total loans and leases			6,904,564			6,801,782			5,596,512		• Net gain on sales of loans of $6.0 million,
	Net charge-offs (NCO)			9,514			6,211			4,267		up $503,000, or 9.1%
	Allowance for credit losses (ACL)			99,730			102,366			92,665
	ACL to total loans and leases held for investment			1.45%			1.51%			1.66%		• Efficiency ratio of 52.19%(1)
Select Ratios (annualized where applicable)												Balance Sheet
	Efficiency ratio(1)			52.19%			51.94%			52.92%		• Total loans and leases grew $102.8 million,
	Return on average assets (ROAA)			1.31%			1.36%			1.41%		or 6.1%(2)
	Return on average stockholders' equity			11.83%			12.26%			12.99%
	Return on average tangible common equity(1)			15.27%			15.88%			16.78%		• Total assets grew $223.3 million, or 9.5%(2)
	Net Interest Margin (NIM)			3.98%			4.00%			4.32%
	Common equity to total assets			10.72%			10.72%			10.74%		• NPAs down $4.1 million, or 24.0%(2)
	Tangible common equity to tangible assets(1)			8.82%			8.76%			8.87%
	Common Equity Tier 1			10.84%			10.59%			10.58%		• Total deposits of $7.3 billion, flat QoQ

(1)	Represents non-GAAP financial measures. See “Reconciliation of non-GAAP Financial Measures” for a reconciliation to the most directly comparable GAAP financial measure.
(2)	Annualized

CEO/President Commentary

Roberto R. Herencia, Executive Chairman and CEO of Byline Bancorp, commented, "Our second quarter results remained strong, and we are pleased with our overall performance for the first half of the year. Our results continue to show the progress we are making in becoming the preeminent commercial bank in Chicago." Alberto J. Paracchini, President of Byline Bancorp, added, "We delivered another quarter of strong earnings, profitability, and continue to show discipline in managing expenses. We executed well on our commercial banking strategy driven by solid loan and relationship growth, which is benefiting from the contributions of new banking talent we've added over the past couple of years. I would like to thank all our employees, who again enabled our strong performance, for their dedication and hard work."

Board Declares Cash Dividend of $0.09 per Share

On July 23, 2024, the Company's Board of Directors declared a cash dividend of $0.09 per share, payable on August 20, 2024, to stockholders of record of the Company's common stock as of August 6, 2024.

STATEMENTS OF OPERATIONS HIGHLIGHTS

Net Interest Income

Net interest income for the second quarter of 2024 was $86.5 million, an increase of $985,000, or 1.2%, from the first quarter of 2024. The increase in net interest income was primarily due to a $2.7 million increase in interest and fees on loans and leases due to the growth in the loan and lease portfolio, partially offset by an increase of $1.6 million in deposit interest expense, primarily driven by higher rates paid on interest checking.

Tax-equivalent net interest margin⁽¹⁾ for the second quarter of 2024 was 3.99%, a decrease of two basis points compared to the first quarter of 2024. Net loan accretion income positively contributed 17 basis points to the net interest margin for the current quarter compared to 20 basis points for the prior quarter.

The average cost of total deposits was 2.63% for the second quarter of 2024, an increase of seven basis points compared to the first quarter of 2024, as a result of higher rates on interest checking accounts. Average non-interest-bearing demand deposits were 25.0% of average total deposits for the current quarter compared to 25.9% during the prior quarter.

Provision for Credit Losses

The provision for credit losses was $6.0 million for the second quarter of 2024, a decrease of $598,000 compared to $6.6 million for the first quarter of 2024, mainly attributed to improvements in the collectively assessed portfolio, partially offset by an increase in the allocation for individually assessed government guaranteed loans. The provision for credit losses for the quarter is comprised of a provision for loan and lease losses of $6.9 million and a recapture of the provision for unfunded commitments of $833,000.

Non-interest Income

Non-interest income for the second quarter of 2024 was $12.8 million, a decrease of $2.6 million, or 17.0%, compared to $15.5 million for the first quarter of 2024. The decrease in total non-interest income was primarily due to a $1.8 million increase in the downward revaluation of the loan servicing asset due to a decline in overall serviced loan balances and higher prepayment speeds.

Net gains on sales of loans were $6.0 million for the current quarter, an increase of $503,000, or 9.1% compared to the prior quarter. During the second quarter of 2024, we sold $73.9 million of U.S. government guaranteed loans compared to $72.5 million during the first quarter of 2024.

Non-interest Expense

Non-interest expense for the second quarter of 2024 was $53.2 million, a decrease of $599,000, or 1.1%, from $53.8 million for the first quarter of 2024. The decrease in non-interest expense was mainly due to a decrease of $884,000 in other non-interest expense, mainly due to branch consolidation charges taken in the first quarter, and a $645,000 decrease in occupancy and equipment expense, net, due to lower seasonal expenses compared to the prior quarter. These decreases were offset by a $989,000 increase in legal, audit, and other professional fees primarily due to professional services associated with our strategic growth planning and initiatives.

Our efficiency ratio was 52.19% for the second quarter of 2024 compared to 51.94% for the first quarter of 2024, an increase of 25 basis points.

Income Taxes

We recorded income tax expense of $10.4 million during the second quarter of 2024, compared to $10.1 million during the first quarter of 2024. The effective tax rates were 26.0% and 25.0% for the second quarter of 2024 and first quarter of 2024, respectively. The increase in the effective tax rate was due to higher income tax benefits on share-based compensation recorded in the first quarter of 2024.

(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 FINANCIAL CONDITION HIGHLIGHTS

Assets

Total assets were $9.6 billion as of June 30, 2024, an increase of $223.3 million, or 2.4%, compared to $9.4 billion at March 31, 2024. The increase was primarily due to an increase in net loans and leases held for investment of $115.6 million, mainly due to increases in the commercial and industrial and commercial real estate portfolios, and an increase in cash and cash equivalents of $93.6 million, primarily due to increases to balances held at the Federal Reserve Bank.

Asset and Credit Quality

The ACL was $99.7 million as of June 30, 2024, a decrease of $2.6 million, or 2.6%, from $102.4 million at March 31, 2024. Net charge-offs of loans and leases during the second quarter of 2024 were $9.5 million, or 0.56% of average loans and leases, on an annualized basis. This was an increase of $3.3 million compared to net charge-offs of $6.2 million, or 0.37% of average loans and leases, during the first quarter of 2024. The increase is primarily due to an acquired commercial and industrial loan relationship, as well as increased net charge-offs in our originated commercial and industrial portfolio.

Non-performing assets were $64.6 million, or 0.67% of total assets, as of June 30, 2024, a decrease of $4.1 million from $68.7 million, or 0.73% of total assets, at March 31, 2024. The decrease was primarily the result of changes in the commercial and industrial portfolio. The government guaranteed portion of non-performing loans was $6.6 million at June 30, 2024 compared to $7.1 million at March 31, 2024.

Deposits and Other Liabilities

Total deposits decreased $3.0 million to $7.3 billion at June 30, 2024 compared to $7.4 billion at March 31, 2024. The decrease in deposits in the current quarter was mainly due to reduced reliance on brokered deposits.

Total borrowings and other liabilities were $1.3 billion at June 30, 2024, an increase of $202.4 million from $1.1 billion at March 31, 2024, primarily driven by a $200.0 million increase in Federal Home Loan Bank advances.

Stockholders’ Equity

Total stockholders’ equity was $1.0 billion at June 30, 2024, and increase of $24.0 million from March 31, 2024, primarily due to retained earnings from net income.

(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.

Conference Call, Webcast and Slide Presentation

We will host a conference call and webcast at 9:00 a.m. Central Time on Friday, July 26, 2024, 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 (833) 470-1428; passcode 298462. A recorded replay can be accessed through August 9, 2024, by dialing (866) 813-9403; passcode: 804686.

A slide presentation relating to our second quarter 2024 results will be accessible prior to the conference call. The slide presentation and webcast of the conference call can be accessed on our investor relations website at www.bylinebancorp.com.

About Byline Bancorp, Inc.

Headquartered in Chicago, Byline Bancorp, Inc. is the parent company of Byline Bank, a full service commercial bank serving small- and medium-sized businesses, financial sponsors, and consumers. Byline Bank has approximately $9.6 billion in assets and operates 46 branch locations throughout the Chicago and Milwaukee metropolitan areas. Byline Bank offers a broad range of commercial and community banking products and services including small ticket equipment leasing solutions and is one of the top Small Business Administration lenders in the United States.

Forward-Looking Statements

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

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

Certain risks and important factors that could affect Byline’s future results are identified in our Annual Report on Form 10-K and other reports we file with the Securities and Exchange Commission, including among other things under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023. 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,				June 30,
(dollars in thousands)		2024				2024				2023
ASSETS
Cash and due from banks		$	68,251			$	58,640			$	59,564
Interest bearing deposits with other banks			662,206				578,197				260,621
Cash and cash equivalents			730,457				636,837				320,185
Equity and other securities, at fair value			8,745				9,135				18,473
Securities available-for-sale, at fair value			1,386,827				1,379,147				1,125,700
Securities held-to-maturity, at amortized cost			606				1,156				2,158
Restricted stock, at cost			31,775				22,793				24,377
Loans held for sale			13,360				23,568				25,995
Loans and leases:
Loans and leases			6,891,204				6,778,214				5,570,517
Allowance for credit losses - loans and leases			(99,730	)			(102,366	)			(92,665	)
Net loans and leases			6,791,474				6,675,848				5,477,852
Servicing assets, at fair value			19,617				20,992				21,715
Premises and equipment, net			63,919				64,466				56,304
Goodwill and other intangible assets, net			200,788				202,133				155,977
Bank-owned life insurance			98,519				97,748				83,222
Deferred tax assets, net			48,888				53,029				66,895
Accrued interest receivable and other assets			238,840				223,651				196,837
Total assets		$	9,633,815			$	9,410,503			$	7,575,690
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Non-interest-bearing demand deposits		$	1,762,891			$	1,851,727			$	1,793,749
Interest-bearing deposits			5,584,290				5,498,475				4,123,343
Total deposits			7,347,181				7,350,202				5,917,092
Other borrowings			918,738				721,173				574,922
Subordinated notes, net			73,953				73,909				73,778
Junior subordinated debentures issued to capital trusts, net			70,675				70,567				37,557
Accrued interest payable and other liabilities			190,254				185,603				158,399
Total liabilities			8,600,801				8,401,454				6,761,748
STOCKHOLDERS’ EQUITY
Common stock			452				452				391
Additional paid-in capital			710,792				708,844				599,718
Retained earnings			481,232				455,532				379,078
Treasury stock			(47,993	)			(48,869	)			(50,383	)
Accumulated other comprehensive loss, net of tax			(111,469	)			(106,910	)			(114,862	)
Total stockholders’ equity			1,033,014				1,009,049				813,942
Total liabilities and stockholders’ equity		$	9,633,815			$	9,410,503			$	7,575,690

BYLINE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
		Three Months Ended
		June 30,				March 31,				June 30,
(dollars in thousands, except per share data)		2024				2024				2023
INTEREST AND DIVIDEND INCOME
Interest and fees on loans and leases		$	126,523			$	123,792			$	99,134
Interest on securities			10,514				9,734				6,559
Other interest and dividend income			4,532				4,795				1,579
Total interest and dividend income			141,569				138,321				107,272
INTEREST EXPENSE
Deposits			47,603				45,962				24,723
Other borrowings			4,460				3,824				4,241
Subordinated notes and debentures			2,980				2,994				2,142
Total interest expense			55,043				52,780				31,106
Net interest income			86,526				85,541				76,166
PROVISION FOR CREDIT LOSSES			6,045				6,643				5,790
Net interest income after provision for credit losses			80,481				78,898				70,376
NON-INTEREST INCOME
Fees and service charges on deposits			2,548				2,427				2,233
Loan servicing revenue			3,216				3,364				3,377
Loan servicing asset revaluation			(2,468	)			(703	)			(865	)
ATM and interchange fees			1,163				1,075				1,112
Change in fair value of equity securities, net			(390	)			392				193
Net gains on sales of loans			6,036				5,533				5,704
Wealth management and trust income			942				1,157				1,039
Other non-interest income			1,797				2,228				1,498
Total non-interest income			12,844				15,473				14,291
NON-INTEREST EXPENSE
Salaries and employee benefits			33,911				33,953				29,642
Occupancy and equipment expense, net			4,639				5,284				4,404
Loan and lease related expenses			741				685				488
Legal, audit, and other professional fees			3,708				2,719				3,675
Data processing			4,036				4,145				4,272
Net (gain) loss recognized on other real estate owned and other related expenses			(62	)			(98	)			288
Other intangible assets amortization expense			1,345				1,345				1,455
Other non-interest expense			4,892				5,776				5,104
Total non-interest expense			53,210				53,809				49,328
INCOME BEFORE PROVISION FOR INCOME TAXES			40,115				40,562				35,339
PROVISION FOR INCOME TAXES			10,444				10,122				9,232
NET INCOME		$	29,671			$	30,440			$	26,107
EARNINGS PER COMMON SHARE
Basic		$	0.68			$	0.70			$	0.70
Diluted		$	0.68			$	0.70			$	0.70

BYLINE BANCORP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA (unaudited)
	As of or For the Three Months Ended
(dollars in thousands, except share	June 30,				March 31,				June 30,
and per share data)	2024				2024				2023
Earnings per Common Share
Basic earnings per common share	$	0.68			$	0.70			$	0.70
Diluted earnings per common share	$	0.68			$	0.70			$	0.70
Adjusted diluted earnings per common share(1)(3)	$	0.68			$	0.70			$	0.73
Weighted average common shares outstanding (basic)		43,361,516				43,258,087				37,034,626
Weighted average common shares outstanding (diluted)		43,741,840				43,727,344				37,337,906
Common shares outstanding		44,180,829				44,108,387				37,752,002
Cash dividends per common share	$	0.09			$	0.09			$	0.09
Dividend payout ratio on common stock		13.24	%			12.86	%			12.86	%
Book value per common share	$	23.38			$	22.88			$	21.56
Tangible book value per common share(1)	$	18.84			$	18.29			$	17.43
Key Ratios and Performance Metrics (annualized where applicable)
Net interest margin		3.98	%			4.00	%			4.32	%
Net interest margin, fully taxable equivalent (1)(4)		3.99	%			4.01	%			4.33	%
Average cost of deposits		2.63	%			2.56	%			1.70	%
Efficiency ratio(1)(2)		52.19	%			51.94	%			52.92	%
Adjusted efficiency ratio(1)(2)(3)		52.19	%			51.75	%			51.39	%
Non-interest income to total revenues(1)		12.93	%			15.32	%			15.80	%
Non-interest expense to average assets		2.34	%			2.40	%			2.67	%
Adjusted non-interest expense to average assets(1)(3)		2.34	%			2.39	%			2.60	%
Return on average stockholders' equity		11.83	%			12.26	%			12.99	%
Adjusted return on average stockholders' equity(1)(3)		11.83	%			12.31	%			13.56	%
Return on average assets		1.31	%			1.36	%			1.41	%
Adjusted return on average assets(1)(3)		1.31	%			1.36	%			1.48	%
Pre-tax pre-provision return on average assets(1)		2.03	%			2.10	%			2.23	%
Adjusted pre-tax pre-provision return on average assets(1)(3)		2.03	%			2.11	%			2.30	%
Return on average tangible common stockholders' equity(1)		15.27	%			15.88	%			16.78	%
Adjusted return on average tangible common stockholders' equity(1)(3)		15.27	%			15.95	%			17.50	%
Non-interest-bearing deposits to total deposits		23.99	%			25.19	%			30.31	%
Loans and leases held for sale and loans and lease held for investment to total deposits		93.98	%			92.54	%			94.58	%
Deposits to total liabilities		85.42	%			87.49	%			87.51	%
Deposits per branch	$	159,721			$	153,129			$	155,713
Asset Quality Ratios
Non-performing loans and leases to total loans and leases held for investment, net before ACL		0.93	%			1.00	%			0.69	%
Total non-performing assets as a percentage of total assets		0.67	%			0.73	%			0.54	%
ACL to total loans and leases held for investment, net before ACL		1.45	%			1.51	%			1.66	%
Net charge-offs (annualized) to average total loans and leases held for investment, net before ACL - loans and leases		0.56	%			0.37	%			0.31	%
Capital Ratios
Common equity to total assets		10.72	%			10.72	%			10.74	%
Tangible common equity to tangible assets(1)		8.82	%			8.76	%			8.87	%
Leverage ratio		11.08	%			10.91	%			10.74	%
Common equity tier 1 capital ratio		10.84	%			10.59	%			10.58	%
Tier 1 capital ratio		11.86	%			11.62	%			11.22	%
Total capital ratio		13.86	%			13.66	%			13.52	%

(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 merger-related expenses and impairment charges on ROU assets.
(4)	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, 2024												March 31, 2024												June 30, 2023
(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	$	305,873			$	3,315				4.36	%		$	339,449			$	3,828				4.54	%		$	135,003			$	1,041				3.09	%
Loans and leases(1)		6,807,934				126,523				7.47	%			6,681,488				123,792				7.45	%			5,535,593				99,134				7.18	%
Taxable securities		1,473,000				10,869				2.97	%			1,422,661				9,822				2.78	%			1,250,780				6,324				2.03	%
Tax-exempt securities(2)		156,655				1,091				2.80	%			159,984				1,112				2.80	%			151,205				980				2.60	%
Total interest-earning assets	$	8,743,462			$	141,798				6.52	%		$	8,603,582			$	138,554				6.48	%		$	7,072,581			$	107,479				6.10	%
Allowance for credit losses - loans and leases		(103,266	)											(102,256	)											(92,804	)
All other assets		500,540												529,615												424,122
TOTAL ASSETS	$	9,140,736											$	9,030,941											$	7,403,899
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Interest checking	$	717,513			$	4,096				2.30	%		$	590,406			$	2,429				1.65	%		$	541,036			$	2,175				1.61	%
Money market accounts		2,270,231				19,978				3.54	%			2,237,324				19,660				3.53	%			1,534,463				10,799				2.82	%
Savings		514,192				194				0.15	%			531,912				197				0.15	%			575,254				220				0.15	%
Time deposits		1,951,448				23,335				4.81	%			1,992,357				23,676				4.78	%			1,328,679				11,529				3.48	%
Total interest-bearing deposits		5,453,384				47,603				3.51	%			5,351,999				45,962				3.45	%			3,979,432				24,723				2.49	%
Other borrowings		521,545				4,439				3.42	%			472,644				3,824				3.25	%			509,419				4,241				3.34	%
Federal funds purchased		1,401				21				6.05	%			—				—				0.00	%			—				—				0.00	%
Subordinated notes and debentures		144,548				2,980				8.29	%			144,387				2,994				8.34	%			111,255				2,142				7.72	%
Total borrowings		667,494				7,440				4.48	%			617,031				6,818				4.44	%			620,674				6,383				4.12	%
Total interest-bearing liabilities	$	6,120,878			$	55,043				3.62	%		$	5,969,030			$	52,780				3.56	%		$	4,600,106			$	31,106				2.71	%
Non-interest-bearing demand deposits		1,817,133												1,874,322												1,848,538
Other liabilities		193,923												188,783												148,983
Total stockholders’ equity		1,008,802												998,806												806,272
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	9,140,736											$	9,030,941											$	7,403,899
Net interest spread(3)										2.90	%											2.92	%											3.39	%
Net interest income, fully taxable equivalent					$	86,755											$	85,774											$	76,373
Net interest margin, fully taxable equivalent(2)(4)										3.99	%											4.01	%											4.33	%
Less: Tax-equivalent adjustment						229				0.01	%							233				0.01	%							207				0.01	%
Net interest income					$	86,526											$	85,541											$	76,166
Net interest margin(4)										3.98	%											4.00	%											4.32	%
Net loan accretion impact on margin					$	3,656				0.17	%						$	4,284				0.20	%						$	611				0.03	%

(1)	Loan and lease balances are net of deferred origination fees and costs and initial direct 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
SELECTED BALANCE SHEET TABLES AND FINANCIAL RATIOS (unaudited)
The following table presents our allocation of originated, purchased credit deteriorated (PCD), and acquired non-credit-deteriorated loans and leases at the dates indicated:
		June 30, 2024								March 31, 2024								June 30, 2023
(dollars in thousands)		Amount				% of Total				Amount				% of Total				Amount				% of Total
Originated loans and leases:
Commercial real estate		$	1,924,797				27.9	%		$	1,879,149				27.7	%		$	1,806,531				32.4	%
Residential real estate			498,578				7.2	%			488,887				7.2	%			453,880				8.1	%
Construction, land development, and other land			445,919				6.5	%			416,996				6.2	%			387,623				7.0	%
Commercial and industrial			2,493,229				36.2	%			2,420,952				35.7	%			2,086,274				37.5	%
Installment and other			2,576				0.0	%			2,855				0.0	%			3,582				0.1	%
Leasing financing receivables			710,784				10.3	%			691,617				10.2	%			604,437				10.9	%
Total originated loans and leases		$	6,075,883				88.1	%		$	5,900,456				87.0	%		$	5,342,327				95.9	%
Purchased credit deteriorated loans:
Commercial real estate		$	114,053				1.7	%		$	117,460				1.7	%		$	30,724				0.6	%
Residential real estate			40,728				0.6	%			39,535				0.6	%			26,012				0.5	%
Construction, land development, and other land			9				0.0	%			26,418				0.4	%			320				0.0	%
Commercial and industrial			17,796				0.3	%			18,100				0.3	%			1,726				0.0	%
Installment and other			116				0.0	%			118				0.0	%			129				0.0	%
Total purchased credit deteriorated loans		$	172,702				2.6	%		$	201,631				3.0	%		$	58,911				1.1	%
Acquired non-credit-deteriorated loans and leases:
Commercial real estate		$	254,858				3.7	%		$	271,720				4.0	%		$	126,191				2.3	%
Residential real estate			188,489				2.7	%			204,589				3.0	%			25,055				0.4	%
Construction, land development, and other land			84,849				1.2	%			85,553				1.3	%			—				0.0	%
Commercial and industrial			113,997				1.7	%			113,673				1.7	%			16,750				0.3	%
Installment and other			153				0.0	%			166				0.0	%			25				0.0	%
Leasing financing receivables			273				0.0	%			426				0.0	%			1,258				0.0	%
Total acquired non-credit-deteriorated loans and leases		$	642,619				9.3	%		$	676,127				10.0	%		$	169,279				3.0	%
Total loans and leases		$	6,891,204				100.0	%		$	6,778,214				100.0	%		$	5,570,517				100.0	%
Allowance for credit losses - loans and leases			(99,730	)							(102,366	)							(92,665	)
Total loans and leases, net of allowance for credit losses - loans and leases		$	6,791,474							$	6,675,848							$	5,477,852

The following table presents the balance and activity within the allowance for credit losses - loans and lease for the periods indicated:
		Three Months Ended
		June 30,				March 31,				June 30,
(dollars in thousands)		2024				2024				2023
ACL - loans and leases, beginning of period		$	102,366			$	101,686			$	90,465
Provision for credit losses - loans and leases			6,878				6,891				6,467
Net charge-offs - loans and leases			(9,514	)			(6,211	)			(4,267	)
ACL - loans and leases, end of period		$	99,730			$	102,366			$	92,665
Net charge-offs - loans and leases to average total loans and leases held for investment, net before ACL			0.56	%			0.37	%			0.31	%
Provision for credit losses - loans and leases to net charge-offs - loans and leases during the period			0.72	x			1.11	x			1.52	x

BYLINE BANCORP, INC. AND SUBSIDIARIES
SELECTED BALANCE SHEET TABLES AND FINANCIAL RATIOS (unaudited)
The following table presents the amounts of non-performing loans and leases and other real estate owned at the date indicated:
														June 30, 2024
														Change from
(dollars in thousands)		June 30, 2024				March 31, 2024				June 30, 2023				March 31, 2024				June 30, 2023
Non-performing assets:
Non-accrual loans and leases		$	63,808			$	67,899			$	38,273				(6.0	)%			66.7	%
Past due loans and leases 90 days or more and still accruing interest			—				—				—			—%				—%
Total non-performing loans and leases		$	63,808			$	67,899			$	38,273				(6.0	)%			66.7	%
Other real estate owned			780				785				2,265				(0.6	)%			(65.6	)%
Total non-performing assets		$	64,588			$	68,684			$	40,538				(6.0	)%			59.3	%
Total non-performing loans and leases as a percentage of total loans and leases			0.93	%			1.00	%			0.69	%
Total non-performing assets as a percentage of total assets			0.67	%			0.73	%			0.54	%
Allowance for credit losses - loans and lease as a percentage of non-performing loans and leases			156.30	%			150.76	%			242.11	%
Non-performing assets guaranteed by U.S. government:
Non-accrual loans guaranteed		$	6,616			$	7,138			$	2,472				(7.3	)%			167.6	%
Past due loans 90 days or more and still accruing interest guaranteed			—				—				—			—%				—%
Total non-performing loans guaranteed		$	6,616			$	7,138			$	2,472				(7.3	)%			167.6	%
Total non-performing loans and leases not guaranteed as a percentage of total loans and leases			0.83	%			0.90	%			0.64	%
Total non-performing assets not guaranteed as a percentage of total assets			0.60	%			0.65	%			0.50	%

The following table presents the composition of deposits at the dates indicated:
														June 30, 2024
														Change from
(dollars in thousands)		June 30, 2024				March 31, 2024				June 30, 2023				March 31, 2024				June 30, 2023
Non-interest-bearing demand deposits		$	1,762,891			$	1,851,727			$	1,793,749				(4.8	)%			(1.7	)%
Interest-bearing checking accounts			717,229				687,142				530,775				4.4	%			35.1	%
Money market demand accounts			2,323,245				2,263,819				1,600,043				2.6	%			45.2	%
Other savings			503,935				524,890				562,706				(4.0	)%			(10.4	)%
Time deposits (below $250,000)			1,610,308				1,594,290				1,214,717				1.0	%			32.6	%
Time deposits ($250,000 and above)			429,573				428,334				215,102				0.3	%			99.7	%
Total deposits		$	7,347,181			$	7,350,202			$	5,917,092				(0.0	)%			24.2	%

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
		June 30,				March 31,				June 30,
(dollars in thousands, except per share data)		2024				2024				2023
Net income and earnings per share excluding significant items:
Reported Net Income		$	29,671			$	30,440			$	26,107
Significant items:
Impairment charges on ROU assets			—				194				—
Merger-related expenses			—				—				1,391
Tax benefit			—				(52	)			(230	)
Adjusted Net Income		$	29,671			$	30,582			$	27,268
Reported Diluted Earnings per Share		$	0.68			$	0.70			$	0.70
Significant items:
Impairment charges on ROU assets			—				—				—
Merger-related expenses			—				—				0.04
Tax benefit			—				—				(0.01	)
Adjusted Diluted Earnings per Share		$	0.68			$	0.70			$	0.73

BYLINE BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited)
		As of or For the Three Months Ended
(dollars in thousands, except per share data,		June 30,				March 31,				June 30,
ratios annualized, where applicable)		2024				2024				2023
Adjusted non-interest expense:
Non-interest expense		$	53,210			$	53,809			$	49,328
Less: Impairment charges on ROU assets			—				194				—
Less: Merger-related expenses			—				—				1,391
Adjusted non-interest expense		$	53,210			$	53,615			$	47,937
Adjusted non-interest expense excluding amortization of intangible assets:
Adjusted non-interest expense		$	53,210			$	53,615			$	47,937
Less: Amortization of intangible assets			1,345				1,345				1,455
Adjusted non-interest expense excluding amortization of intangible assets		$	51,865			$	52,270			$	46,482
Pre-tax pre-provision net income:
Pre-tax income		$	40,115			$	40,562			$	35,339
Add: Provision for credit losses			6,045				6,643				5,790
Pre-tax pre-provision net income		$	46,160			$	47,205			$	41,129
Adjusted pre-tax pre-provision net income:
Pre-tax pre-provision net income		$	46,160			$	47,205			$	41,129
Add: Impairment charges on ROU assets			—				194				—
Add: Merger-related expenses			—				—				1,391
Adjusted pre-tax pre-provision net income		$	46,160			$	47,399			$	42,520
Tax equivalent net interest income:
Net interest income		$	86,526			$	85,541			$	76,166
Add: Tax-equivalent adjustment			229				233				207
Net interest income, fully taxable equivalent		$	86,755			$	85,774			$	76,373
Total revenue:
Net interest income		$	86,526			$	85,541			$	76,166
Add: Non-interest income			12,844				15,473				14,291
Total revenue		$	99,370			$	101,014			$	90,457
Tangible common stockholders' equity:
Total stockholders' equity		$	1,033,014			$	1,009,049			$	813,942
Less: Goodwill and other intangibles			200,788				202,133				155,977
Tangible common stockholders' equity		$	832,226			$	806,916			$	657,965
Tangible assets:
Total assets		$	9,633,815			$	9,410,503			$	7,575,690
Less: Goodwill and other intangibles			200,788				202,133				155,977
Tangible assets		$	9,433,027			$	9,208,370			$	7,419,713
Average tangible common stockholders' equity:
Average total stockholders' equity		$	1,008,802			$	998,806			$	806,272
Less: Average goodwill and other intangibles			201,428				202,773				156,766
Average tangible common stockholders' equity		$	807,374			$	796,033			$	649,506
Average tangible assets:
Average total assets		$	9,140,736			$	9,030,941			$	7,403,899
Less: Average goodwill and other intangibles			201,428				202,773				156,766
Average tangible assets		$	8,939,308			$	8,828,168			$	7,247,133
Tangible net income available to common stockholders:
Net income available to common stockholders		$	29,671			$	30,440			$	26,107
Add: After-tax intangible asset amortization			987				986				1,067
Tangible net income available to common stockholders		$	30,658			$	31,426			$	27,174
Adjusted tangible net income available to common stockholders:
Tangible net income available to common stockholders		$	30,658			$	31,426			$	27,174
Add: Impairment charges on ROU assets			—				194				—
Add: Merger-related expenses			—				—				1,391
Add: Tax benefit on significant items			—				(52	)			(230	)
Adjusted tangible net income available to common stockholders		$	30,658			$	31,568			$	28,335

BYLINE BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited)
		As of or For the Three Months Ended
(dollars in thousands, except share and per share		June 30,				March 31,				June 30,
data, ratios annualized, where applicable)		2024				2024				2023
Pre-tax pre-provision return on average assets:
Pre-tax pre-provision net income		$	46,160			$	47,205			$	41,129
Average total assets			9,140,736				9,030,941				7,403,899
Pre-tax pre-provision return on average assets			2.03	%			2.10	%			2.23	%
Adjusted pre-tax pre-provision return on average assets:
Adjusted pre-tax pre-provision net income		$	46,160			$	47,399			$	42,520
Average total assets			9,140,736				9,030,941				7,403,899
Adjusted pre-tax pre-provision return on average assets			2.03	%			2.11	%			2.30	%
Net interest margin, fully taxable equivalent:
Net interest income, fully taxable equivalent		$	86,755			$	85,774			$	76,373
Total average interest-earning assets			8,743,462				8,603,582				7,072,581
Net interest margin, fully taxable equivalent			3.99	%			4.01	%			4.33	%
Non-interest income to total revenues:
Non-interest income		$	12,844			$	15,473			$	14,291
Total revenues			99,370				101,014				90,457
Non-interest income to total revenues			12.93	%			15.32	%			15.80	%
Adjusted non-interest expense to average assets:
Adjusted non-interest expense		$	53,210			$	53,615			$	47,937
Average total assets			9,140,736				9,030,941				7,403,899
Adjusted non-interest expense to average assets			2.34	%			2.39	%			2.60	%
Adjusted efficiency ratio:
Adjusted non-interest expense excluding amortization of intangible assets		$	51,865			$	52,270			$	46,482
Total revenues			99,370				101,014				90,457
Adjusted efficiency ratio			52.19	%			51.75	%			51.39	%
Adjusted return on average assets:
Adjusted net income		$	29,671			$	30,582			$	27,268
Average total assets			9,140,736				9,030,941				7,403,899
Adjusted return on average assets			1.31	%			1.36	%			1.48	%
Adjusted return on average stockholders' equity:
Adjusted net income		$	29,671			$	30,582			$	27,268
Average stockholders' equity			1,008,802				998,806				806,272
Adjusted return on average stockholders' equity			11.83	%			12.31	%			13.56	%
Tangible common equity to tangible assets:
Tangible common equity		$	832,226			$	806,916			$	657,965
Tangible assets			9,433,027				9,208,370				7,419,713
Tangible common equity to tangible assets			8.82	%			8.76	%			8.87	%
Return on average tangible common stockholders' equity:
Tangible net income available to common stockholders		$	30,658			$	31,426			$	27,174
Average tangible common stockholders' equity			807,374				796,033				649,506
Return on average tangible common stockholders' equity			15.27	%			15.88	%			16.78	%
Adjusted return on average tangible common stockholders' equity:
Adjusted tangible net income available to common stockholders		$	30,658			$	31,568			$	28,335
Average tangible common stockholders' equity			807,374				796,033				649,506
Adjusted return on average tangible common stockholders' equity			15.27	%			15.95	%			17.50	%
Tangible book value per share:
Tangible common equity		$	832,226			$	806,916			$	657,965
Common shares outstanding			44,180,829				44,108,387				37,752,002
Tangible book value per share		$	18.84			$	18.29			$	17.43

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240725278359/en/

Investors / Media:

Brooks Rennie

Investor Relations Director

312-660-5805

brennie@bylinebank.com

Source: Byline Bancorp, Inc.

FAQ

What was Byline Bancorp's (BY) net income for Q2 2024?

Byline Bancorp (BY) reported a net income of $29.7 million for Q2 2024.

How much did Byline Bancorp's (BY) net interest income grow in Q2 2024?

Byline Bancorp's net interest income increased by $985,000, or 1.2%, to $86.5 million in Q2 2024 compared to Q1 2024.

What was Byline Bancorp's (BY) efficiency ratio in Q2 2024?

Byline Bancorp's efficiency ratio was 52.19% for Q2 2024, a slight increase from 51.94% in Q1 2024.

How much did Byline Bancorp's (BY) total assets grow in Q2 2024?

Byline Bancorp's total assets grew by $223.3 million, or 9.5% annualized, to $9.6 billion in Q2 2024.

What dividend did Byline Bancorp (BY) declare for Q2 2024?

Byline Bancorp declared a cash dividend of $0.09 per share for Q2 2024, payable on August 20, 2024.