Byline Bancorp, Inc. Reports Second Quarter 2021 Financial Results

Select Second Quarter 2021 Highlights

  • Net income of $28.5 million, or $0.73 per diluted share
  • Net interest margin of 3.74%
  • Return on average assets of 1.70%, as adjusted1 1.78%
  • Efficiency ratio of 51.95%
  • Non-interest bearing deposits 41.0% of total deposits
  • Originated loans and leases increased $63.8 million, total production of $365.4 million
  • Common Equity Tier 1 to risk weighted assets of 11.97%

Byline Bancorp, Inc. ("Byline", the “Company”, "we", "our", or "us")(NYSE: BY), the parent company of Byline Bank (the “Bank”), today reported net income of $28.5 million, or $0.73 per diluted share, for the second quarter of 2021, compared with net income of $21.8 million, or $0.56 per diluted share, for the first quarter of 2021 and net income of $9.1 million, or $0.24 per diluted share for the second quarter 2020. Adjusted net income1 was $29.9 million, or $0.77 per adjusted diluted share, for the second quarter of 2021, compared with $22.2 million, or $0.57 per adjusted diluted share1, for the first quarter of 2021 and $9.1 million, or $0.24 per adjusted diluted share for the second quarter of 2020.

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

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

(1)

 

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

Board Declares Cash Dividend of $0.09 per Share

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

Board Authorizes Expansion of Share Repurchase Program

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

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

STATEMENTS OF OPERATIONS

Net Interest Income

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

 

 

 

 

 

 

 

 

 

 

 

June 30, 2021

 

 

Three Months Ended

 

Change from

 

 

June 30,

 

March 31,

 

June 30,

 

March 31,

 

June 30,

(dollars in thousands)

 

2021

 

2021

 

2020

 

2021

 

2020

INTEREST AND DIVIDEND INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans and leases

 

$

54,324

 

 

$

53,808

 

 

$

50,153

 

 

 

1.0

%

 

 

8.3

%

Interest on securities

 

 

6,359

 

 

 

6,089

 

 

 

7,530

 

 

 

4.4

%

 

 

(15.6

)%

Other interest and dividend income

 

 

628

 

 

 

262

 

 

 

222

 

 

 

140.3

%

 

 

183.0

%

Total interest and dividend income

 

 

61,311

 

 

 

60,159

 

 

 

57,905

 

 

 

1.9

%

 

 

5.9

%

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

1,058

 

 

 

1,421

 

 

 

4,246

 

 

 

(25.6

)%

 

 

(75.1

)%

Other borrowings

 

 

482

 

 

 

502

 

 

 

476

 

 

 

(4.2

)%

 

 

1.2

%

Subordinated notes and debentures

 

 

1,597

 

 

 

1,596

 

 

 

574

 

 

 

0.1

%

 

 

178.1

%

Total interest expense

 

 

3,137

 

 

 

3,519

 

 

 

5,296

 

 

 

(10.9

)%

 

 

(40.8

)%

Net interest income

 

$

58,174

 

 

$

56,640

 

 

$

52,609

 

 

 

2.7

%

 

 

10.6

%

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

 

 

For the Three Months Ended

 

 

June 30, 2021

 

March 31, 2021

(dollars in thousands)

 

Average

Balance(5)

 

Interest

Inc / Exp

 

Average

Yield /

Rate

 

Average

Balance(5)

 

Interest

Inc / Exp

 

Average

Yield /

Rate

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

75,382

 

 

$

28

 

 

 

0.15

%

 

$

55,477

 

 

$

28

 

 

 

0.21

%

Loans and leases(1)

 

 

4,491,197

 

 

 

54,324

 

 

 

4.85

%

 

 

4,432,246

 

 

 

53,808

 

 

 

4.92

%

Taxable securities

 

 

1,477,070

 

 

 

5,947

 

 

 

1.62

%

 

 

1,430,625

 

 

 

5,379

 

 

 

1.52

%

Tax-exempt securities(2)

 

 

187,967

 

 

 

1,281

 

 

 

2.73

%

 

 

179,364

 

 

 

1,194

 

 

 

2.70

%

Total interest-earning assets

 

$

6,231,616

 

 

$

61,580

 

 

 

3.96

%

 

$

6,097,712

 

 

$

60,409

 

 

 

4.02

%

Allowance for loan and lease losses

 

 

(65,848

)

 

 

 

 

 

 

(66,989

)

 

 

 

 

All other assets

 

 

554,724

 

 

 

 

 

 

 

557,042

 

 

 

 

 

TOTAL ASSETS

 

$

6,720,492

 

 

 

 

 

 

$

6,587,765

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

Interest checking

 

$

626,886

 

 

$

220

 

 

 

0.14

%

 

$

546,730

 

 

$

199

 

 

 

0.15

%

Money market accounts

 

 

1,052,223

 

 

 

279

 

 

 

0.11

%

 

 

1,124,101

 

 

 

381

 

 

 

0.14

%

Savings

 

 

607,035

 

 

 

72

 

 

 

0.05

%

 

 

577,504

 

 

 

67

 

 

 

0.05

%

Time deposits

 

 

717,795

 

 

 

487

 

 

 

0.27

%

 

 

777,266

 

 

 

774

 

 

 

0.40

%

Total interest-bearing deposits

 

 

3,003,939

 

 

 

1,058

 

 

 

0.14

%

 

 

3,025,601

 

 

 

1,421

 

 

 

0.19

%

Other borrowings

 

 

642,586

 

 

 

482

 

 

 

0.30

%

 

 

649,639

 

 

 

502

 

 

 

0.31

%

Subordinated notes and debentures

 

 

110,030

 

 

 

1,597

 

 

 

5.82

%

 

 

109,859

 

 

 

1,596

 

 

 

5.89

%

Total borrowings

 

 

752,616

 

 

 

2,079

 

 

 

1.11

%

 

 

759,498

 

 

 

2,098

 

 

 

1.12

%

Total interest-bearing liabilities

 

$

3,756,555

 

 

$

3,137

 

 

 

0.33

%

 

$

3,785,099

 

 

$

3,519

 

 

 

0.38

%

Non-interest-bearing demand deposits

 

 

2,085,358

 

 

 

 

 

 

 

1,924,178

 

 

 

 

 

Other liabilities

 

 

68,089

 

 

 

 

 

 

 

72,036

 

 

 

 

 

Total stockholders’ equity

 

 

810,490

 

 

 

 

 

 

 

806,452

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

6,720,492

 

 

 

 

 

 

$

6,587,765

 

 

 

 

 

Net interest spread(3)

 

 

 

 

 

 

3.63

%

 

 

 

 

 

 

3.64

%

Net interest income, fully taxable equivalent

 

 

 

$

58,443

 

 

 

 

 

 

$

56,890

 

 

 

Net interest margin, fully taxable equivalent(2)(4)

 

 

 

 

 

 

3.76

%

 

 

 

 

 

 

3.78

%

Tax-equivalent adjustment

 

 

 

 

(269

)

 

 

0.02

%

 

 

 

 

(250

)

 

 

0.01

%

Net interest income

 

 

 

$

58,174

 

 

 

 

 

 

$

56,640

 

 

 

Net interest margin(4)

 

 

 

 

 

 

3.74

%

 

 

 

 

 

 

3.77

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loan accretion impact on margin

 

 

 

$

1,395

 

 

 

0.09

%

 

 

 

$

1,968

 

 

 

0.13

%

(1)

Loan and lease balances are net of deferred origination fees and costs and initial indirect costs. Non-accrual loans and leases are included in total loan and lease balances.

(2)

Interest income and rates include the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis, assuming a federal income tax rate of 21%.

(3)

Represents the average rate earned on interest-earning assets minus the average rate paid on interest-bearing liabilities.

(4)

Represents net interest income (annualized) divided by total average earning assets.

(5)

Average balances are average daily balances.

Net interest income for the second quarter of 2021 was $58.2 million, an increase of $1.5 million, or 2.7%, from the first quarter of 2021.

The increase in net interest income was primarily due to:

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

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

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

Provision for Loan and Lease Losses

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

Non-interest Income

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

 

 

Three Months Ended

 

Change from

 

 

June 30,

 

March 31,

 

June 30,

 

March 31,

 

June 30,

(dollars in thousands)

 

2021

 

2021

 

2020

 

2021

 

2020

NON-INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

Fees and service charges on deposits

 

$

1,768

 

 

$

1,664

 

 

$

1,455

 

 

 

6.2

%

 

 

21.5

%

Loan servicing revenue

 

 

3,188

 

 

 

2,769

 

 

 

2,980

 

 

 

15.2

%

 

 

7.0

%

Loan servicing asset revaluation

 

 

7

 

 

 

(1,505

)

 

 

(711

)

 

NM

 

 

NM

 

ATM and interchange fees

 

 

1,044

 

 

 

1,012

 

 

 

845

 

 

 

3.1

%

 

 

23.6

%

Net gains (losses) on sales of securities available-for-sale

 

 

(136

)

 

 

1,462

 

 

 

 

 

NM

 

 

NM

 

Change in fair value of equity securities, net

 

 

517

 

 

 

(206

)

 

 

766

 

 

NM

 

 

 

(32.5

)%

Net gains on sales of loans

 

 

12,270

 

 

 

8,319

 

 

 

6,456

 

 

 

47.5

%

 

 

90.1

%

Wealth management and trust income

 

 

722

 

 

 

768

 

 

 

608

 

 

 

(5.9

)%

 

 

19.0

%

Other non-interest income

 

 

1,622

 

 

 

1,459

 

 

 

430

 

 

 

11.1

%

 

 

275.3

%

Total non-interest income

 

$

21,002

 

 

$

15,742

 

 

$

12,829

 

 

 

33.4

%

 

 

63.7

%

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

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

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

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

Non-interest Expense

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

 

 

Three Months Ended

 

Change from

 

 

June 30,

 

March 31,

 

June 30,

 

March 31,

 

June 30,

(dollars in thousands)

 

2021

 

2021

 

2020

 

2021

 

2020

NON-INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

$

24,588

 

 

$

21,806

 

 

$

19,405

 

 

 

12.8

%

 

 

26.7

%

Occupancy and equipment expense, net

 

 

4,856

 

 

 

5,779

 

 

 

5,359

 

 

 

(16.0

)%

 

 

(9.4

)%

Loan and lease related expenses

 

 

1,503

 

 

 

951

 

 

 

1,260

 

 

 

57.9

%

 

 

19.2

%

Legal, audit and other professional fees

 

 

2,898

 

 

 

2,214

 

 

 

2,078

 

 

 

30.9

%

 

 

39.4

%

Data processing

 

 

2,847

 

 

 

2,755

 

 

 

2,826

 

 

 

3.4

%

 

 

0.7

%

Net loss recognized on other real estate owned and other related expenses

 

 

389

 

 

 

621

 

 

 

456

 

 

 

(37.4

)%

 

 

(14.7

)%

Other intangible assets amortization expense

 

 

1,848

 

 

 

1,749

 

 

 

1,892

 

 

 

5.6

%

 

 

(2.4

)%

Other non-interest expense

 

 

4,052

 

 

 

2,967

 

 

 

3,777

 

 

 

36.6

%

 

 

7.4

%

Total non-interest expense

 

$

42,981

 

 

$

38,842

 

 

$

37,053

 

 

 

10.7

%

 

 

16.0

%

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

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

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

Partially offset by:

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

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

INCOME TAXES

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

STATEMENTS OF FINANCIAL CONDITION

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

The current quarter decrease was primarily due to:

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

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

 

 

June 30, 2021

 

March 31, 2021

 

June 30, 2020

(dollars in thousands)

 

Amount

 

% of Total

 

Amount

 

% of Total

 

Amount

 

% of Total

Originated loans and leases

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

1,156,824

 

 

 

25.9

%

 

$

1,064,151

 

 

 

23.9

%

 

$

919,510

 

 

 

20.9

%

Residential real estate

 

 

389,758

 

 

 

8.7

%

 

 

399,958

 

 

 

9.0

%

 

 

480,692

 

 

 

10.9

%

Construction, land development, and other land

 

 

271,710

 

 

 

6.1

%

 

 

238,122

 

 

 

5.3

%

 

 

219,261

 

 

 

5.0

%

Commercial and industrial

 

 

1,350,471

 

 

 

30.2

%

 

 

1,285,759

 

 

 

28.9

%

 

 

1,200,996

 

 

 

27.4

%

Paycheck protection program

 

 

476,282

 

 

 

10.7

%

 

 

617,006

 

 

 

13.8

%

 

 

611,664

 

 

 

13.9

%

Installment and other

 

 

982

 

 

 

0.0

%

 

 

1,094

 

 

 

0.0

%

 

 

2,714

 

 

 

0.1

%

Leasing financing receivables

 

 

267,300

 

 

 

6.0

%

 

 

243,399

 

 

 

5.5

%

 

 

160,741

 

 

 

3.7

%

Total originated loans and leases

 

$

3,913,327

 

 

 

87.6

%

 

$

3,849,489

 

 

 

86.4

%

 

$

3,595,578

 

 

 

81.9

%

Acquired impaired loans

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

91,313

 

 

 

2.0

%

 

$

96,059

 

 

 

2.2

%

 

$

126,405

 

 

 

2.9

%

Residential real estate

 

 

67,401

 

 

 

1.5

%

 

 

74,283

 

 

 

1.7

%

 

 

90,784

 

 

 

2.1

%

Construction, land development, and other land

 

 

2,008

 

 

 

0.0

%

 

 

1,992

 

 

 

0.0

%

 

 

4,784

 

 

 

0.1

%

Commercial and industrial

 

 

7,444

 

 

 

0.2

%

 

 

8,842

 

 

 

0.2

%

 

 

13,485

 

 

 

0.3

%

Installment and other

 

 

180

 

 

 

0.0

%

 

 

191

 

 

 

0.0

%

 

 

226

 

 

 

0.0

%

Total acquired impaired loans

 

$

168,346

 

 

 

3.7

%

 

$

181,367

 

 

 

4.1

%

 

$

235,684

 

 

 

5.4

%

Acquired non-impaired loans and leases

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

254,739

 

 

 

5.6

%

 

$

271,458

 

 

 

6.0

%

 

$

305,041

 

 

 

6.9

%

Residential real estate

 

 

65,119

 

 

 

1.5

%

 

 

71,038

 

 

 

1.6

%

 

 

99,288

 

 

 

2.2

%

Construction, land development, and other land

 

 

208

 

 

 

0.0

%

 

 

210

 

 

 

0.0

%

 

 

21,958

 

 

 

0.5

%

Commercial and industrial

 

 

58,320

 

 

 

1.3

%

 

 

69,795

 

 

 

1.6

%

 

 

116,668

 

 

 

2.7

%

Installment and other

 

 

311

 

 

 

0.0

%

 

 

331

 

 

 

0.0

%

 

 

818

 

 

 

0.0

%

Leasing financing receivables

 

 

9,087

 

 

 

0.3

%

 

 

10,932

 

 

 

0.3

%

 

 

16,087

 

 

 

0.4

%

Total acquired non-impaired loans and leases

 

$

387,784

 

 

 

8.7

%

 

$

423,764

 

 

 

9.5

%

 

$

559,860

 

 

 

12.7

%

Total loans and leases

 

$

4,469,457

 

 

 

100.0

%

 

$

4,454,620

 

 

 

100.0

%

 

$

4,391,122

 

 

 

100.0

%

Allowance for loan and lease losses

 

 

(61,719

)

 

 

 

 

(65,590

)

 

 

 

 

(51,300

)

 

 

Total loans and leases, net of allowance for loan and lease losses

 

$

4,407,738

 

 

 

 

$

4,389,030

 

 

 

 

$

4,339,822

 

 

 

Loan and Lease Deferrals

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

 

 

Active Deferrals

 

 

As of June 30, 2021

 

As of December 31, 2020

 

Change from December 31, 2020

(dollars in thousands)

 

Count

 

Amount

 

Percentage of

Total Loans

and Leases(2)

 

Count

 

Amount

 

Percentage of

Total Loans

and Leases(2)

 

Count

 

Amount

Commercial Banking

 

 

2

 

 

$

2,167

 

 

 

0.05

%

 

 

21

 

 

$

22,905

 

 

 

0.60

%

 

 

(19

)

 

$

(20,738

)

Consumer Loans

 

 

 

 

 

 

 

 

 

 

 

2

 

 

 

703

 

 

 

0.02

%

 

 

(2

)

 

 

(703

)

Leasing

 

 

3

 

 

 

118

 

 

 

 

 

 

30

 

 

 

1,528

 

 

 

0.04

%

 

 

(27

)

 

 

(1,410

)

Government Guaranteed Lending

 

 

7

 

 

 

1,436

 

 

 

0.04

%

 

 

262

 

 

 

75,444

 

 

 

1.97

%

 

 

(255

)

 

 

(74,008

)

Total

 

 

12

 

 

$

3,721

 

 

 

0.09

%

 

 

315

 

 

$

100,580

 

 

 

2.63

%

 

 

(303

)

 

$

(96,859

)

(2) Excludes PPP loans

Paycheck Protection Program

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

 

 

PPP Loan Size

 

 

 

 

 

 

 

(dollars in thousands)

 

First Round

 

Second Round

 

Total

Principal outstanding

 

$

150,646

 

 

$

337,523

 

 

$

488,169

 

Unearned processing fee

 

 

(2,162

)

 

 

(13,785

)

 

 

(15,947

)

Deferred cost

 

 

552

 

 

 

3,508

 

 

 

4,060

 

PPP loans, net

 

$

149,036

 

 

$

327,246

 

 

$

476,282

 

Number of loans

 

 

914

 

 

 

2,552

 

 

 

3,466

 

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

ASSET QUALITY

Non-Performing Assets

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

 

 

 

 

 

 

 

 

Change from

(dollars in thousands)

 

June 30, 2021

 

March 31, 2021

 

June 30, 2020

 

March 31, 2021

 

June 30, 2020

Non-performing assets:

 

 

 

 

 

 

 

 

 

 

Non-accrual loans and leases

 

$

35,514

 

 

$

37,084

 

 

$

40,505

 

 

 

(4.2

)%

 

 

(12.3

)%

Past due loans and leases 90 days or more and still accruing interest

 

 

 

 

 

 

 

 

 

 

%

 

%

Total non-performing loans and leases

 

$

35,514

 

 

$

37,084

 

 

$

40,505

 

 

 

(4.2

)%

 

 

(12.3

)%

Other real estate owned

 

 

4,417

 

 

 

5,952

 

 

 

8,652

 

 

 

(25.8

)%

 

 

(48.9

)%

Total non-performing assets

 

$

39,931

 

 

$

43,036

 

 

$

49,157

 

 

 

(7.2

)%

 

 

(18.8

)%

Accruing troubled debt restructured loans (1)

 

$

2,395

 

 

$

2,719

 

 

$

3,151

 

 

 

(11.9

)%

 

 

(24.0

)%

Total non-performing loans and leases as a percentage of total loans and leases

 

 

0.79

%

 

 

0.83

%

 

 

0.92

%

 

 

 

 

Total non-performing assets as a percentage of total assets

 

 

0.61

%

 

 

0.64

%

 

 

0.77

%

 

 

 

 

Allowance for loan and lease losses as a percentage of non-performing loans and leases

 

 

173.79

%

 

 

176.87

%

 

 

126.65

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing assets guaranteed by U.S. government:

 

 

 

 

 

 

 

 

 

 

Non-accrual loans guaranteed

 

$

5,847

 

 

$

3,388

 

 

$

3,755

 

 

 

72.6

%

 

 

55.7

%

Past due loans 90 days or more and still accruing interest guaranteed

 

 

 

 

 

 

 

 

 

 

%

 

%

Total non-performing loans guaranteed

 

$

5,847

 

 

$

3,388

 

 

$

3,755

 

 

 

72.6

%

 

 

55.7

%

Accruing troubled debt restructured loans guaranteed (1)

 

$

 

 

$

 

 

$

 

 

%

 

%

Total non-performing loans and leases not guaranteed as a percentage of total loans and leases

 

 

0.66

%

 

 

0.76

%

 

 

0.84

%

 

 

 

 

Total non-performing assets not guaranteed as a percentage of total assets

 

 

0.52

%

 

 

0.59

%

 

 

0.71

%

 

 

 

 

Variances in non-performing assets were:

  • Non-performing loans and leases were $35.5 million at June 30, 2021, a decrease of $1.6 million from $37.1 million at March 31, 2021; and
  • Other real estate owned was $4.4 million at June 30, 2021, a decrease of $1.5 million from $5.9 million at March 31, 2021 mainly due to sales.

Allowance for Loan and Lease Losses

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

 

 

Three Months Ended

 

 

June 30,

 

March 31,

 

June 30,

(dollars in thousands)

 

2021

 

2021

 

2020

Allowance for loan and lease losses, beginning of period

 

$

65,590

 

 

$

66,347

 

 

$

41,840

 

Provision for (release of) loan and lease losses

 

 

(1,969

)

 

 

4,367

 

 

 

15,518

 

Net charge-offs of loans and leases

 

 

(1,902

)

 

 

(5,124

)

 

 

(6,058

)

Allowance for loan and lease losses, end of period

 

$

61,719

 

 

$

65,590

 

 

$

51,300

 

 

 

 

 

 

 

 

Allowance for loan and lease losses to period end total loans and leases held for investment

 

 

1.38

%

 

 

1.47

%

 

 

1.17

%

Net charge-offs (annualized) to average loans and leases outstanding during the period

 

 

0.17

%

 

 

0.47

%

 

 

0.57

%

Provision for (release of) loan and lease losses to net charge-offs during the period

 

(1.04)x

 

 

0.85

x

 

 

2.56

x

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

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

Net Charge-Offs

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

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

Deposits and Other Liabilities

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

 

 

 

 

 

 

 

 

 

 

 

Change from

(dollars in thousands)

 

June 30, 2021

 

March 31, 2021

 

June 30, 2020

 

March 31, 2021

 

June 30, 2020

Non-interest-bearing demand deposits

 

$

2,089,455

 

 

$

2,015,643

 

 

$

1,768,675

 

 

 

3.7

%

 

 

18.1

%

Interest-bearing checking accounts

 

 

653,558

 

 

 

567,660

 

 

 

503,909

 

 

 

15.1

%

 

 

29.7

%

Money market demand accounts

 

 

1,023,675

 

 

 

1,075,330

 

 

 

1,233,748

 

 

 

(4.8

)%

 

 

(17.0

)%

Other savings

 

 

613,136

 

 

 

600,725

 

 

 

525,043

 

 

 

2.1

%

 

 

16.8

%

Time deposits (below $250,000)

 

 

567,469

 

 

 

579,682

 

 

 

710,429

 

 

 

(2.1

)%

 

 

(20.1

)%

Time deposits ($250,000 and above)

 

 

144,902

 

 

 

185,500

 

 

 

216,541

 

 

 

(21.9

)%

 

 

(33.1

)%

Total deposits

 

$

5,092,195

 

 

$

5,024,540

 

 

$

4,958,345

 

 

 

1.3

%

 

 

2.7

%

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

The increase in the current quarter was primarily due to:

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

Partially offset by:

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

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

Stockholders’ Equity

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

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

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

 

 

Actual

 

Minimum Capital

Required

 

Required to be

Considered

Well Capitalized

June 30, 2021

 

Amount

 

Ratio

 

Amount

 

Ratio

 

Amount

 

Ratio

Total capital to risk weighted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

808,088

 

 

 

15.74

%

 

$

410,628

 

 

 

8.00

%

 

N/A

 

 

N/A

 

Bank

 

 

727,418

 

 

 

14.22

%

 

 

409,099

 

 

 

8.00

%

 

$

511,374

 

 

 

10.00

%

Tier 1 capital to risk weighted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

669,765

 

 

 

13.05

%

 

$

307,971

 

 

 

6.00

%

 

N/A

 

 

N/A

 

Bank

 

$

664,095

 

 

 

12.99

%

 

 

306,824

 

 

 

6.00

%

 

$

409,099

 

 

 

8.00

%

Common Equity Tier 1 (CET1) to risk weighted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

614,327

 

 

 

11.97

%

 

$

230,978

 

 

 

4.50

%

 

N/A

 

 

N/A

 

Bank

 

 

664,095

 

 

 

12.99

%

 

 

230,118

 

 

 

4.50

%

 

$

332,393

 

 

 

6.50

%

Tier 1 capital to average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

669,765

 

 

 

10.82

%

 

$

247,646

 

 

 

4.00

%

 

N/A

 

 

N/A

 

Bank

 

 

664,095

 

 

 

10.73

%

 

 

247,596

 

 

 

4.00

%

 

$

309,495

 

 

 

5.00

%

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

Conference Call, Webcast and Slide Presentation

We will host a conference call and webcast at 9:00 a.m. Central Time on Friday, July 30, 2021 to discuss our quarterly financial results. Analysts and investors may participate in the question-and-answer session. The call can be accessed via telephone at (877) 512-8755. A recorded replay can be accessed through August 13, 2021 by dialing (877) 344-7529; passcode: 10158447.

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

About Byline Bancorp, Inc.

Headquartered in Chicago, Byline Bancorp, Inc. is the parent company for Byline Bank, a full service commercial bank serving small- and medium-sized businesses, financial sponsors, and consumers. Byline Bank has approximately $6.5 billion in assets and operates more than 40 full service branch locations throughout the Chicago and Milwaukee metropolitan areas. Byline Bank offers a broad range of commercial and retail banking products and services including small ticket equipment leasing solutions and is one of the top five Small Business Administration lenders in the United States.

Forward-Looking Statements

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

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

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

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

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)

 

(dollars in thousands)

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

2021

 

2021

 

2020

 

2020

 

2020

ASSETS

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

50,558

 

 

$

47,101

 

 

$

41,432

 

 

$

47,433

 

 

$

51,818

 

Interest bearing deposits with other banks

 

 

52,138

 

 

 

66,038

 

 

 

41,988

 

 

 

53,645

 

 

 

88,113

 

Cash and cash equivalents

 

 

102,696

 

 

 

113,139

 

 

 

83,420

 

 

 

101,078

 

 

 

139,931

 

Equity and other securities, at fair value

 

 

10,575

 

 

 

8,557

 

 

 

8,764

 

 

 

8,335

 

 

 

8,181

 

Securities available-for-sale, at fair value

 

 

1,495,789

 

 

 

1,675,907

 

 

 

1,447,230

 

 

 

1,509,211

 

 

 

1,426,871

 

Securities held-to-maturity, at amortized cost

 

 

3,890

 

 

 

3,892

 

 

 

4,395

 

 

 

4,400

 

 

 

4,404

 

Restricted stock, at cost

 

 

11,927

 

 

 

19,057

 

 

 

10,507

 

 

 

9,652

 

 

 

6,232

 

Loans held for sale

 

 

25,046

 

 

 

28,584

 

 

 

7,924

 

 

 

49,049

 

 

 

3,031

 

Loans and leases:

 

 

 

 

 

 

 

 

 

 

Loans and leases

 

 

4,469,457

 

 

 

4,454,620

 

 

 

4,340,535

 

 

 

4,374,517

 

 

 

4,391,122

 

Allowance for loan and lease losses

 

 

(61,719

)

 

 

(65,590

)

 

 

(66,347

)

 

 

(61,258

)

 

 

(51,300

)

Net loans and leases

 

 

4,407,738

 

 

 

4,389,030

 

 

 

4,274,188

 

 

 

4,313,259

 

 

 

4,339,822

 

Servicing assets, at fair value

 

 

24,683

 

 

 

22,140

 

 

 

22,042

 

 

 

21,267

 

 

 

18,351

 

Premises and equipment, net

 

 

80,482

 

 

 

85,182

 

 

 

86,728

 

 

 

94,638

 

 

 

95,546

 

Other real estate owned, net

 

 

4,417

 

 

 

5,952

 

 

 

6,350

 

 

 

8,150

 

 

 

8,652

 

Goodwill and other intangible assets, net

 

 

169,034

 

 

 

170,882

 

 

 

172,631

 

 

 

174,523

 

 

 

176,470

 

Bank-owned life insurance

 

 

60,628

 

 

 

60,258

 

 

 

10,009

 

 

 

9,952

 

 

 

9,896

 

Deferred tax assets, net

 

 

43,127

 

 

 

48,662

 

 

 

40,181

 

 

 

35,945

 

 

 

37,082

 

Accrued interest receivable and other assets

 

 

100,570

 

 

 

118,883

 

 

 

216,283

 

 

 

157,054

 

 

 

119,049

 

Total assets

 

$

6,540,602

 

 

$

6,750,125

 

 

$

6,390,652

 

 

$

6,496,513

 

 

$

6,393,518

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing demand deposits

 

$

2,089,455

 

 

$

2,015,643

 

 

$

1,762,676

 

 

$

1,718,682

 

 

$

1,768,675

 

Interest-bearing deposits

 

 

3,002,740

 

 

 

3,008,897

 

 

 

2,989,355

 

 

 

3,091,563

 

 

 

3,189,670

 

Total deposits

 

 

5,092,195

 

 

 

5,024,540

 

 

 

4,752,031

 

 

 

4,810,245

 

 

 

4,958,345

 

Other borrowings

 

 

446,836

 

 

 

749,719

 

 

 

647,901

 

 

 

710,560

 

 

 

510,414

 

Subordinated notes, net

 

 

73,429

 

 

 

73,386

 

 

 

73,342

 

 

 

73,299

 

 

 

48,777

 

Junior subordinated debentures issued to capital trusts, net

 

 

36,682

 

 

 

36,565

 

 

 

36,451

 

 

 

36,331

 

 

 

36,206

 

Accrued expenses and other liabilities

 

 

74,387

 

 

 

72,120

 

 

 

75,463

 

 

 

71,382

 

 

 

58,841

 

Total liabilities

 

 

5,723,529

 

 

 

5,956,330

 

 

 

5,585,188

 

 

 

5,701,817

 

 

 

5,612,583

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

Common stock

 

 

385

 

 

 

385

 

 

 

384

 

 

 

383

 

 

 

381

 

Additional paid-in capital

 

 

590,422

 

 

 

589,209

 

 

 

587,165

 

 

 

586,057

 

 

 

583,307

 

Retained earnings

 

 

236,363

 

 

 

210,385

 

 

 

191,098

 

 

 

180,162

 

 

 

168,444

 

Treasury stock

 

 

(20,712

)

 

 

(8,275

)

 

 

(1,668

)

 

 

(1,668

)

 

 

(1,668

)

Accumulated other comprehensive income (loss), net of tax

 

 

177

 

 

 

(8,347

)

 

 

18,047

 

 

 

19,324

 

 

 

20,033

 

Total stockholders’ equity

 

 

817,073

 

 

 

793,795

 

 

 

805,464

 

 

 

794,696

 

 

 

780,935

 

Total liabilities and stockholders’ equity

 

$

6,540,602

 

 

$

6,750,125

 

 

$

6,390,652

 

 

$

6,496,513

 

 

$

6,393,518

 

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

(dollars in thousands, except per share data)

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

 

June 30,

 

June 30,

 

June 30,

 

2021

 

2021

 

2020

 

2020

 

 

2020

 

2021

 

2020

INTEREST AND DIVIDEND INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans and leases

 

$

54,324

 

 

$

53,808

 

 

$

53,441

 

 

$

51,036

 

 

$

50,153

 

 

$

108,132

 

 

$

104,311

 

Interest on securities

 

 

6,359

 

 

 

6,089

 

 

 

6,252

 

 

 

7,070

 

 

 

 

7,530

 

 

 

12,448

 

 

 

15,546

 

Other interest and dividend income

 

 

628

 

 

 

262

 

 

 

232

 

 

 

128

 

 

 

 

222

 

 

 

890

 

 

 

1,214

 

Total interest and dividend income

 

 

61,311

 

 

 

60,159

 

 

 

59,925

 

 

 

58,234

 

 

 

 

57,905

 

 

 

121,470

 

 

 

121,071

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

1,058

 

 

 

1,421

 

 

 

1,814

 

 

 

2,760

 

 

 

 

4,246

 

 

 

2,479

 

 

 

12,050

 

Other borrowings

 

 

482

 

 

 

502

 

 

 

480

 

 

 

465

 

 

 

 

476

 

 

 

984

 

 

 

2,373

 

Subordinated notes and debentures

 

 

1,597

 

 

 

1,596

 

 

 

1,611

 

 

 

1,485

 

 

 

 

574

 

 

 

3,193

 

 

 

1,214

 

Total interest expense

 

 

3,137

 

 

 

3,519

 

 

 

3,905

 

 

 

4,710

 

 

 

 

5,296

 

 

 

6,656

 

 

 

15,637

 

Net interest income

 

 

58,174

 

 

 

56,640

 

 

 

56,020

 

 

 

53,524

 

 

 

 

52,609

 

 

 

114,814

 

 

 

105,434

 

PROVISION FOR (RELEASE OF) LOAN AND LEASE LOSSES

 

 

(1,969

)

 

 

4,367

 

 

 

10,236

 

 

 

15,740

 

 

 

 

15,518

 

 

 

2,398

 

 

 

29,973

 

Net interest income after provision for (release of) loan and lease losses

 

 

60,143

 

 

 

52,273

 

 

 

45,784

 

 

 

37,784

 

 

 

 

37,091

 

 

 

112,416

 

 

 

75,461

 

NON-INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges on deposits

 

 

1,768

 

 

 

1,664

 

 

 

1,740

 

 

 

1,603

 

 

 

 

1,455

 

 

 

3,432

 

 

 

3,128

 

Loan servicing revenue

 

 

3,188

 

 

 

2,769

 

 

 

2,645

 

 

 

2,936

 

 

 

 

2,980

 

 

 

5,957

 

 

 

5,738

 

Loan servicing asset revaluation

 

 

7

 

 

 

(1,505

)

 

 

(2,298

)

 

 

1,122

 

 

 

 

(711

)

 

 

(1,498

)

 

 

(3,775

)

ATM and interchange fees

 

 

1,044

 

 

 

1,012

 

 

 

1,076

 

 

 

1,028

 

 

 

 

845

 

 

 

2,056

 

 

 

2,061

 

Net gains (losses) on sales of securities available-for-sale

 

 

(136

)

 

 

1,462

 

 

 

2,889

 

 

 

1,037

 

 

 

 

 

 

 

1,326

 

 

 

1,375

 

Change in fair value of equity securities, net

 

 

517

 

 

 

(206

)

 

 

428

 

 

 

154

 

 

 

 

766

 

 

 

311

 

 

 

147

 

Net gains on sales of loans

 

 

12,270

 

 

 

8,319

 

 

 

9,449

 

 

 

12,671

 

 

 

 

6,456

 

 

 

20,589

 

 

 

11,229

 

Wealth management and trust income

 

 

722

 

 

 

768

 

 

 

710

 

 

 

693

 

 

 

 

608

 

 

 

1,490

 

 

 

1,277

 

Other non-interest income

 

 

1,622

 

 

 

1,459

 

 

 

1,051

 

 

 

990

 

 

 

 

430

 

 

 

3,081

 

 

 

956

 

Total non-interest income

 

 

21,002

 

 

 

15,742

 

 

 

17,690

 

 

 

22,234

 

 

 

 

12,829

 

 

 

36,744

 

 

 

22,136

 

NON-INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

24,588

 

 

 

21,806

 

 

 

22,559

 

 

 

23,126

 

 

 

 

19,405

 

 

 

46,394

 

 

 

44,071

 

Occupancy and equipment expense, net

 

 

4,856

 

 

 

5,779

 

 

 

6,854

 

 

 

5,220

 

 

 

 

5,359

 

 

 

10,635

 

 

 

10,883

 

Loan and lease related expenses

 

 

1,503

 

 

 

951

 

 

 

1,324

 

 

 

2,053

 

 

 

 

1,260

 

 

 

2,454

 

 

 

2,578

 

Legal, audit, and other professional fees

 

 

2,898

 

 

 

2,214

 

 

 

1,336

 

 

 

2,390

 

 

 

 

2,078

 

 

 

5,112

 

 

 

4,412

 

Data processing

 

 

2,847

 

 

 

2,755

 

 

 

2,748

 

 

 

2,661

 

 

 

 

2,826

 

 

 

5,602

 

 

 

5,491

 

Net loss recognized on other real estate owned and other related expenses

 

 

389

 

 

 

621

 

 

 

495

 

 

 

349

 

 

 

 

456

 

 

 

1,010

 

 

 

975

 

Other intangible assets amortization expense

 

 

1,848

 

 

 

1,749

 

 

 

1,892

 

 

 

1,947

 

 

 

 

1,892

 

 

 

3,597

 

 

 

3,785

 

Other non-interest expense

 

 

4,052

 

 

 

2,967

 

 

 

9,813

 

 

 

3,941

 

 

 

 

3,777

 

 

 

7,019

 

 

 

8,519

 

Total non-interest expense

 

 

42,981

 

 

 

38,842

 

 

 

47,021

 

 

 

41,687

 

 

 

 

37,053

 

 

 

81,823

 

 

 

80,714

 

INCOME BEFORE PROVISION FOR INCOME TAXES

 

 

38,164

 

 

 

29,173

 

 

 

16,453

 

 

 

18,331

 

 

 

 

12,867

 

 

 

67,337

 

 

 

16,883

 

PROVISION FOR INCOME TAXES

 

 

9,672

 

 

 

7,375

 

 

 

4,162

 

 

 

5,260

 

 

 

 

3,728

 

 

 

17,047

 

 

 

4,778

 

NET INCOME

 

 

28,492

 

 

 

21,798

 

 

 

12,291

 

 

 

13,071

 

 

 

 

9,139

 

 

 

50,290

 

 

 

12,105

 

Dividends on preferred shares

 

 

195

 

 

 

196

 

 

 

196

 

 

 

196

 

 

 

 

195

 

 

 

391

 

 

 

391

 

INCOME AVAILABLE TO COMMON STOCKHOLDERS

 

$

28,297

 

 

$

21,602

 

 

$

12,095

 

 

$

12,875

 

 

 

$

8,944

 

 

$

49,899

 

 

$

11,714

 

EARNINGS PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.75

 

 

$

0.57

 

 

$

0.32

 

 

$

0.34

 

 

 

$

0.24

 

 

$

1.31

 

 

$

0.31

 

Diluted

 

$

0.73

 

 

$

0.56

 

 

$

0.31

 

 

$

0.34

 

 

 

$

0.24

 

 

$

1.29

 

 

$

0.31

 

BYLINE BANCORP, INC. AND SUBSIDIARIES

SELECTED FINANCIAL DATA (unaudited)

 

 

 

As of or For the Three Months Ended

 

As of or For the Six Months Ended

(dollars in thousands, except share and per share data)

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

June 30,

 

June 30,

 

2021

 

2021

 

2020

 

2020

 

2020

 

2021

 

2020

Common Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$

0.75

 

 

$

0.57

 

 

$

0.32

 

 

$

0.34

 

 

$

0.24

 

 

$

1.31

 

 

$

0.31

 

Diluted earnings per common share

 

$

0.73

 

 

$

0.56

 

 

$

0.31

 

 

$

0.34

 

 

$

0.24

 

 

$

1.29

 

 

$

0.31

 

Adjusted diluted earnings per common share(2)(3)(4)

 

$

0.77

 

 

$

0.57

 

 

$

0.38

 

 

$

0.34

 

 

$

0.24

 

 

$

1.34

 

 

$

0.32

 

Weighted average common shares outstanding (basic)

 

 

37,965,658

 

 

 

38,164,201

 

 

 

38,202,665

 

 

 

38,057,350

 

 

 

37,919,480

 

 

 

38,064,381

 

 

 

37,931,406

 

Weighted average common shares outstanding (diluted)

 

 

38,696,036

 

 

 

38,915,482

 

 

 

38,574,129

 

 

 

38,249,335

 

 

 

38,027,289

 

 

 

38,773,018

 

 

 

38,350,064

 

Common shares outstanding

 

 

38,094,972

 

 

 

38,641,851

 

 

 

38,618,054

 

 

 

38,568,916

 

 

 

38,383,217

 

 

 

38,094,972

 

 

 

38,388,217

 

Cash dividends per common share

 

$

0.06

 

 

$

0.06

 

 

$

0.03

 

 

$

0.03

 

 

$

0.03

 

 

$

0.12

 

 

$

0.06

 

Dividend payout ratio on common stock

 

 

8.22

%

 

 

10.71

%

 

 

9.68

%

 

 

8.82

%

 

 

12.50

%

 

 

9.30

%

 

 

19.35

%

Tangible book value per common share(1)

 

$

16.74

 

 

$

15.85

 

 

$

16.12

 

 

$

15.81

 

 

$

15.47

 

 

$

16.74

 

 

$

15.47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Key Ratios and Performance Metrics (annualized where applicable)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin, fully taxable equivalent (1)(5)

 

 

3.76

%

 

 

3.78

%

 

 

3.78

%

 

 

3.61

%

 

 

3.72

%

 

 

3.77

%

 

 

3.94

%

Average cost of deposits

 

 

0.08

%

 

 

0.12

%

 

 

0.15

%

 

 

0.22

%

 

 

0.36

%

 

 

0.10

%

 

 

0.54

%

Efficiency ratio(2)

 

 

51.95

%

 

 

51.25

%

 

 

61.22

%

 

 

52.46

%

 

 

53.73

%

 

 

51.61

%

 

 

60.30

%

Adjusted efficiency ratio(1)(2)(3)

 

 

49.50

%

 

 

50.41

%

 

 

55.77

%

 

 

52.42

%

 

 

53.73

%

 

 

49.93

%

 

 

59.74

%

Non-interest expense to average assets

 

 

2.57

%

 

 

2.39

%

 

 

2.92

%

 

 

2.59

%

 

 

2.41

%

 

 

2.48

%

 

 

2.76

%

Adjusted non-interest expense to average assets(1)(3)

 

 

2.45

%

 

 

2.35

%

 

 

2.67

%

 

 

2.59

%

 

 

2.41

%

 

 

2.40

%

 

 

2.74

%

Return on average stockholders' equity

 

 

14.10

%

 

 

10.96

%

 

 

6.07

%

 

 

6.57

%

 

 

4.74

%

 

 

12.54

%

 

 

3.16

%

Adjusted return on average stockholders' equity(1)(3)(4)

 

 

14.80

%

 

 

11.18

%

 

 

7.50

%

 

 

6.58

%

 

 

4.74

%

 

 

13.01

%

 

 

3.29

%

Return on average assets

 

 

1.70

%

 

 

1.34

%

 

 

0.76

%

 

 

0.81

%

 

 

0.59

%

 

 

1.52

%

 

 

0.41

%

Adjusted return on average assets(1)(3)(4)

 

 

1.78

%

 

 

1.37

%

 

 

0.94

%

 

 

0.81

%

 

 

0.59

%

 

 

1.58

%

 

 

0.43

%

Non-interest income to total revenues(1)

 

 

26.53

%

 

 

21.75

%

 

 

24.00

%

 

 

29.35

%

 

 

19.61

%

 

 

24.24

%

 

 

17.35

%

Pre-tax pre-provision return on average assets(1)

 

 

2.16

%

 

 

2.06

%

 

 

1.66

%

 

 

2.12

%

 

 

1.85

%

 

 

2.11

%

 

 

1.60

%

Adjusted pre-tax pre-provision return on average assets(1)(3)

 

 

2.28

%

 

 

2.10

%

 

 

1.91

%

 

 

2.12

%

 

 

1.85

%

 

 

2.19

%

 

 

1.63

%

Return on average tangible common stockholders' equity(1)

 

 

18.87

%

 

 

14.86

%

 

 

8.61

%

 

 

9.39

%

 

 

7.05

%

 

 

16.88

%

 

 

4.99

%

Adjusted return on average tangible common stockholders' equity(1)(3)

 

 

19.77

%

 

 

15.15

%

 

 

10.47

%

 

 

9.40

%

 

 

7.05

%

 

 

17.48

%

 

 

5.17

%

Non-interest-bearing deposits to total deposits

 

 

41.03

%

 

 

40.12

%

 

 

37.09

%

 

 

35.73

%

 

 

35.67

%

 

 

41.03

%

 

 

35.67

%

Loans and leases held for sale and loans and lease held for investment to total deposits

 

 

88.26

%

 

 

89.23

%

 

 

91.51

%

 

 

91.96

%

 

 

88.62

%

 

 

88.26

%

 

 

88.62

%

Deposits to total liabilities

 

 

88.97

%

 

 

84.36

%

 

 

85.08

%

 

 

84.36

%

 

 

88.34

%

 

 

88.97

%

 

 

88.34

%

Deposits per branch

 

$

115,732

 

 

$

109,229

 

 

$

103,305

 

 

$

84,390

 

 

$

86,989

 

 

$

115,732

 

 

$

86,989

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing loans and leases to total loans and leases held for investment, net before ALLL

 

 

0.79

%

 

 

0.83

%

 

 

0.95

%

 

 

0.99

%

 

 

0.92

%

 

 

0.79

%

 

 

0.92

%

ALLL to total loans and leases held for investment, net before ALLL

 

 

1.38

%

 

 

1.47

%

 

 

1.53

%

 

 

1.40

%

 

 

1.17

%

 

 

1.38

%

 

 

1.17

%

Net charge-offs to average total loans and leases held for investment, net before ALLL

 

 

0.17

%

 

 

0.47

%

 

 

0.47

%

 

 

0.53

%

 

 

0.57

%

 

 

0.32

%

 

 

0.53

%

Acquisition accounting adjustments(4)

 

$

9,393

 

 

$

10,424

 

 

$

13,389

 

 

$

17,133

 

 

$

19,324

 

 

$

9,393

 

 

$

19,324

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity to total assets

 

 

12.33

%

 

 

11.61

%

 

 

12.44

%

 

 

12.07

%

 

 

12.05

%

 

 

12.33

%

 

 

12.05

%

Tangible common equity to tangible assets(1)

 

 

10.01

%

 

 

9.31

%

 

 

10.01

%

 

 

9.64

%

 

 

9.55

%

 

 

10.01

%

 

 

9.55

%

Leverage ratio

 

 

10.82

%

 

 

10.93

%

 

 

11.12

%

 

 

10.93

%

 

 

10.29

%

 

 

10.82

%

 

 

10.29

%

Common equity tier 1 capital ratio

 

 

11.97

%

 

 

12.09

%

 

 

12.20

%

 

 

12.55

%

 

 

12.33

%

 

 

11.97

%

 

 

12.33

%

Tier 1 capital ratio

 

 

13.05

%

 

 

13.20

%

 

 

13.36

%

 

 

13.77

%

 

 

13.56

%

 

 

13.05

%

 

 

13.56

%

Total capital ratio

 

 

15.74

%

 

 

15.96

%

 

 

16.18

%

 

 

16.67

%

 

 

15.86

%

 

 

15.74

%

 

 

15.86

%

(1)

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

(2)

Represents non-interest expense less amortization of intangible assets divided by net interest income and non-interest income.

(3)

Calculation excludes impairment charges, merger-related expenses, and core systems conversion expense.

(4)

Represents the remaining net unaccreted discount as a result of applying the fair value adjustment at the time of the business combination on acquired loans.

(5)

Interest income and rates include the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis, assuming a federal income tax rate of 21%.

BYLINE BANCORP, INC. AND SUBSIDIARIES

QUARTER-TO-DATE STATEMENT OF AVERAGE INTEREST-EARNING ASSETS AND AVERAGE INTEREST-BEARING LIABILITIES

(unaudited)

 

 

 

For the Three Months Ended June 30,

 

 

2021

 

2020

(dollars in thousands)

 

Average

Balance(5)

 

Interest

Inc / Exp

 

Average

Yield /

Rate

 

Average

Balance(5)

 

Interest

Inc / Exp

 

Average

Yield /

Rate

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

75,382

 

 

$

28

 

 

 

0.15

%

 

$

58,971

 

 

$

25

 

 

 

0.17

%

Loans and leases(1)

 

 

4,491,197

 

 

 

54,324

 

 

 

4.85

%

 

 

4,283,654

 

 

 

50,153

 

 

 

4.71

%

Taxable securities

 

 

1,477,070

 

 

 

5,947

 

 

 

1.62

%

 

 

1,243,604

 

 

 

7,021

 

 

 

2.27

%

Tax-exempt securities(2)

 

 

187,967

 

 

 

1,281

 

 

 

2.73

%

 

 

117,340

 

 

 

894

 

 

 

3.06

%

Total interest-earning assets

 

$

6,231,616

 

 

$

61,580

 

 

 

3.96

%

 

$

5,703,569

 

 

$

58,093

 

 

 

4.10

%

Allowance for loan and lease losses

 

 

(65,848

)

 

 

 

 

 

 

(43,009

)

 

 

 

 

All other assets

 

 

554,724

 

 

 

 

 

 

 

526,414

 

 

 

 

 

TOTAL ASSETS

 

$

6,720,492

 

 

 

 

 

 

$

6,186,974

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

Interest checking

 

$

626,886

 

 

$

220

 

 

 

0.14

%

 

$

392,070

 

 

$

165

 

 

 

0.17

%

Money market accounts

 

 

1,052,223

 

 

 

279

 

 

 

0.11

%

 

 

1,214,713

 

 

 

946

 

 

 

0.31

%

Savings

 

 

607,035

 

 

 

72

 

 

 

0.05

%

 

 

511,049

 

 

 

61

 

 

 

0.05

%

Time deposits

 

 

717,795

 

 

 

487

 

 

 

0.27

%

 

 

976,710

 

 

 

3,074

 

 

 

1.27

%

Total interest-bearing deposits

 

 

3,003,939

 

 

 

1,058

 

 

 

0.14

%

 

 

3,094,542

 

 

 

4,246

 

 

 

0.00

%

Other borrowings

 

 

642,586

 

 

 

482

 

 

 

0.30

%

 

 

534,766

 

 

 

476

 

 

 

0.36

%

Subordinated notes and debentures

 

 

110,030

 

 

 

1,597

 

 

 

5.82

%

 

 

40,180

 

 

 

574

 

 

 

5.75

%

Total borrowings

 

 

752,616

 

 

 

2,079

 

 

 

1.11

%

 

 

574,946

 

 

 

1,050

 

 

 

0.73

%

Total interest-bearing liabilities

 

$

3,756,555

 

 

$

3,137

 

 

 

0.33

%

 

$

3,669,488

 

 

$

5,296

 

 

 

0.58

%

Non-interest-bearing demand deposits

 

 

2,085,358

 

 

 

 

 

 

 

1,692,723

 

 

 

 

 

Other liabilities

 

 

68,089

 

 

 

 

 

 

 

48,884

 

 

 

 

 

Total stockholders’ equity

 

 

810,490

 

 

 

 

 

 

 

775,879

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

6,720,492

 

 

 

 

 

 

$

6,186,974

 

 

 

 

 

Net interest spread(3)

 

 

 

 

 

 

3.63

%

 

 

 

 

 

 

3.52

%

Net interest income, fully taxable equivalent

 

 

 

$

58,443

 

 

 

 

 

 

$

52,797

 

 

 

Net interest margin, fully taxable equivalent(2)(4)

 

 

 

 

 

 

3.76

%

 

 

 

 

 

 

3.72

%

Tax-equivalent adjustment

 

 

 

 

(269

)

 

 

0.02

%

 

 

 

 

(188

)

 

 

0.01

%

Net interest income

 

 

 

$

58,174

 

 

 

 

 

 

$

52,609

 

 

 

Net interest margin(4)

 

 

 

 

 

 

3.74

%

 

 

 

 

 

 

3.71

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loan accretion impact on margin

 

 

 

$

1,395

 

 

 

0.09

%

 

 

 

$

3,172

 

 

 

0.22

%

(1)

Loan and lease balances are net of deferred origination fees and costs and initial indirect costs. Non-accrual loans and leases are included in total loan and lease balances.

(2)

Interest income and rates include the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis, assuming a federal income tax rate of 21%.

(3)

Represents the average rate earned on interest-earning assets minus the average rate paid on interest-bearing liabilities.

(4)

Represents net interest income (annualized) divided by total average earning assets.

(5)

Average balances are average daily balances.

BYLINE BANCORP, INC. AND SUBSIDIARIES

YEAR-TO-DATE STATEMENT OF AVERAGE INTEREST-EARNING ASSETS AND AVERAGE INTEREST-BEARING LIABILITIES

(unaudited)

 

 

 

For the Six Months Ended June 30,

 

 

2021

 

2020

(dollars in thousands)

 

Average

Balance(5)

 

Interest

Inc / Exp

 

Average

Yield /

Rate

 

Average

Balance(5)

 

Interest

Inc / Exp

 

Average

Yield /

Rate

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

65,484

 

 

$

56

 

 

 

0.17

%

 

$

48,952

 

 

$

182

 

 

 

0.75

%

Loans and leases(1)

 

 

4,461,884

 

 

 

108,132

 

 

 

4.89

%

 

 

4,041,433

 

 

 

104,311

 

 

 

5.19

%

Taxable securities

 

 

1,453,976

 

 

 

11,326

 

 

 

1.57

%

 

 

1,209,362

 

 

 

15,337

 

 

 

2.55

%

Tax-exempt securities(2)

 

 

183,689

 

 

 

2,475

 

 

 

2.72

%

 

 

101,010

 

 

 

1,571

 

 

 

3.13

%

Total interest-earning assets

 

$

6,165,033

 

 

$

121,989

 

 

 

3.99

%

 

$

5,400,757

 

 

$

121,401

 

 

 

4.52

%

Allowance for loan and lease losses

 

 

(66,415

)

 

 

 

 

 

 

(38,336

)

 

 

 

 

All other assets

 

 

555,877

 

 

 

 

 

 

 

514,042

 

 

 

 

 

TOTAL ASSETS

 

$

6,654,495

 

 

 

 

 

 

$

5,876,463

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

Interest checking

 

$

587,030

 

 

$

419

 

 

 

0.14

%

 

$

365,487

 

 

$

425

 

 

 

0.23

%

Money market accounts

 

 

1,087,964

 

 

 

660

 

 

 

0.12

%

 

 

1,088,459

 

 

 

3,160

 

 

 

0.58

%

Savings

 

 

592,350

 

 

 

139

 

 

 

0.05

%

 

 

495,660

 

 

 

122

 

 

 

0.05

%

Time deposits

 

 

747,366

 

 

 

1,261

 

 

 

0.34

%

 

 

1,045,153

 

 

 

8,343

 

 

 

1.61

%

Total interest-bearing deposits

 

 

3,014,710

 

 

 

2,479

 

 

 

0.17

%

 

 

2,994,759

 

 

 

12,050

 

 

 

0.81

%

Other borrowings

 

 

646,093

 

 

 

984

 

 

 

0.31

%

 

 

527,937

 

 

 

2,373

 

 

 

0.90

%

Subordinated notes and debentures

 

 

109,945

 

 

 

3,193

 

 

 

5.86

%

 

 

38,782

 

 

 

1,214

 

 

 

6.30

%

Total borrowings

 

 

756,038

 

 

 

4,177

 

 

 

1.11

%

 

 

566,719

 

 

 

3,587

 

 

 

1.27

%

Total interest-bearing liabilities

 

$

3,770,748

 

 

$

6,656

 

 

 

0.36

%

 

$

3,561,478

 

 

$

15,637

 

 

 

0.88

%

Non-interest-bearing demand deposits

 

 

2,005,213

 

 

 

 

 

 

 

1,495,761

 

 

 

 

 

Other liabilities

 

 

70,052

 

 

 

 

 

 

 

48,571

 

 

 

 

 

Total stockholders’ equity

 

 

808,482

 

 

 

 

 

 

 

770,653

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

6,654,495

 

 

 

 

 

 

$

5,876,463

 

 

 

 

 

Net interest spread(3)

 

 

 

 

 

 

3.63

%

 

 

 

 

 

 

3.64

%

Net interest income, fully taxable equivalent

 

 

 

$

115,333

 

 

 

 

 

 

$

105,764

 

 

 

Net interest margin, fully taxable equivalent(2)(4)

 

 

 

 

 

 

3.77

%

 

 

 

 

 

 

3.94

%

Tax-equivalent adjustment

 

 

 

 

(519

)

 

 

0.01

%

 

 

 

 

(330

)

 

 

0.01

%

Net interest income

 

 

 

$

114,814

 

 

 

 

 

 

$

105,434

 

 

 

Net interest margin(4)

 

 

 

 

 

 

3.76

%

 

 

 

 

 

 

3.93

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loan accretion impact on margin

 

 

 

$

3,363

 

 

 

0.11

%

 

 

 

$

6,843

 

 

 

0.25

%

(1)

Loan and lease balances are net of deferred origination fees and costs and initial indirect costs. Non-accrual loans and leases are included in total loan and lease balances.

(2)

Interest income and rates include the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis, assuming a federal income tax rate of 21%.

(3)

Represents the average rate earned on interest-earning assets minus the average rate paid on interest-bearing liabilities.

(4)

Represents net interest income (annualized) divided by total average earning assets.

(5)

Average balances are average daily balances.

BYLINE BANCORP, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)

 

Non-GAAP Financial Measures

 

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

 

 

 

As of or For the Three Months Ended

 

As of or For the Six Months Ended

(dollars in thousands, except per share data)

 

June 30,

2021

 

March 31,

2021

 

December 31,

2020

 

September 30,

2020

 

June 30,

2020

 

June 30,

2021

 

June 30,

2020

Net income and earnings per share excluding significant items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Net Income

 

$

28,492

 

 

$

21,798

 

 

$

12,291

 

 

$

13,071

 

 

$

9,139

 

$

50,290

 

 

$

12,105

 

Significant items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment charges on assets held for sale

 

 

1,942

 

 

 

604

 

 

 

4,022

 

 

 

32

 

 

 

 

 

 

2,546

 

 

 

715

 

Tax benefit

 

 

(529

)

 

 

(165

)

 

 

(1,120

)

 

 

(9

)

 

 

 

 

 

(694

)

 

 

(199

)

Adjusted Net Income

 

$

29,905

 

 

$

22,237

 

 

$

15,193

 

 

$

13,094

 

 

$

9,139

 

 

$

52,142

 

 

$

12,621

 

Reported Diluted Earnings per Share

 

$

0.73

 

 

$

0.56

 

 

$

0.31

 

 

$

0.34

 

 

$

0.24

 

 

$

1.29

 

 

$

0.31

 

Significant items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment charges on assets held for sale

 

 

0.05

 

 

 

0.02

 

 

 

0.10

 

 

 

 

 

 

 

 

 

0.07

 

 

 

0.02

 

Tax benefit

 

 

(0.01

)

 

 

(0.01

)

 

 

(0.03

)

 

 

 

 

 

 

 

 

(0.02

)

 

 

(0.01

)

Adjusted Diluted Earnings per Share

 

$

0.77

 

 

$

0.57

 

 

$

0.38

 

 

$

0.34

 

 

$

0.24

 

 

$

1.34

 

 

$

0.32

 

BYLINE BANCORP, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited)

 

 

 

As of or For the Three Months Ended

 

As of or For the Six Months Ended

(dollars in thousands, except per share data, ratios annualized, where applicable)

 

June 30,

2021

 

March 31,

2021

 

December 31,

2020

 

September 30,

2020

 

June 30,

2020

 

June 30,

2021

 

June 30,

2020

Adjusted non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense

 

$

42,981

 

 

$

38,842

 

 

$

47,021

 

 

$

41,687

 

 

$

37,053

 

$

81,823

 

 

$

80,714

 

Less: Significant items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment charges on assets held for sale

 

 

1,942

 

 

 

604

 

 

 

4,022

 

 

 

32

 

 

 

 

 

 

2,546

 

 

 

715

 

Adjusted non-interest expense

 

$

41,039

 

 

$

38,238

 

 

$

42,999

 

 

$

41,655

 

 

$

37,053

 

 

$

79,277

 

 

$

79,999

 

Adjusted non-interest expense excluding amortization of intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted non-interest expense

 

$

41,039

 

 

$

38,238

 

 

$

42,999

 

 

$

41,655

 

 

$

37,053

 

 

$

79,277

 

 

$

79,999

 

Less: Amortization of intangible assets

 

 

1,848

 

 

 

1,749

 

 

 

1,892

 

 

 

1,947

 

 

 

1,892

 

 

 

3,597

 

 

 

3,785

 

Adjusted non-interest expense excluding amortization of intangible assets

 

$

39,191

 

 

$

36,489

 

 

$

41,107

 

 

$

39,708

 

 

$

35,161

 

 

$

75,680

 

 

$

76,214

 

Pre-tax pre-provision net income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income

 

$

38,164

 

 

$

29,173

 

 

$

16,453

 

 

$

18,331

 

 

$

12,867

 

 

$

67,337

 

 

$

16,883

 

Add: Provision for loan and lease losses

 

 

(1,969

)

 

 

4,367

 

 

 

10,236

 

 

 

15,740

 

 

 

15,518

 

 

 

2,398

 

 

 

29,973

 

Pre-tax pre-provision net income

 

$

36,195

 

 

$

33,540

 

 

$

26,689

 

 

$

34,071

 

 

$

28,385

 

 

$

69,735

 

 

$

46,856

 

Adjusted pre-tax pre-provision net income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax pre-provision net income

 

$

36,195

 

 

$

33,540

 

 

$

26,689

 

 

$

34,071

 

 

$

28,385

 

 

$

69,735

 

 

$

46,856

 

Impairment charges on assets held for sale

 

 

1,942

 

 

 

604

 

 

 

4,022

 

 

 

32

 

 

 

 

 

 

2,546

 

 

 

715

 

Adjusted pre-tax pre-provision net income

 

$

38,137

 

 

$

34,144

 

 

$

30,711

 

 

$

34,103

 

 

$

28,385

 

 

$

72,281

 

 

$

47,571

 

Tax Equivalent Net Interest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

58,174

 

 

$

56,640

 

 

$

56,020

 

 

$

53,524

 

 

$

52,609

 

 

$

114,814

 

 

$

105,434

 

Add: Tax-equivalent adjustment

 

 

269

 

 

 

250

 

 

 

240

 

 

 

222

 

 

 

188

 

 

 

519

 

 

 

330

 

Net interest income, fully taxable equivalent

 

$

58,443

 

 

$

56,890

 

 

$

56,260

 

 

$

53,746

 

 

$

52,797

 

 

$

115,333

 

 

$

105,764

 

Total revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

58,174

 

 

$

56,640

 

 

$

56,020

 

 

$

53,524

 

 

$

52,609

 

 

$

114,814

 

 

$

105,434

 

Add: Non-interest income

 

 

21,002

 

 

 

15,742

 

 

 

17,690

 

 

 

22,234

 

 

 

12,829

 

 

 

36,744

 

 

 

22,136

 

Total revenues

 

$

79,176

 

 

$

72,382

 

 

$

73,710

 

 

$

75,758

 

 

$

65,438

 

 

$

151,558

 

 

$

127,570

 

Tangible common stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

$

817,073

 

 

$

793,795

 

 

$

805,464

 

 

$

794,696

 

 

$

780,935

 

 

$

817,073

 

 

$

780,935

 

Less: Preferred stock

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

Less: Goodwill and other intangibles

 

 

169,034

 

 

 

170,882

 

 

 

172,631

 

 

 

174,523

 

 

 

176,470

 

 

 

169,034

 

 

 

176,470

 

Tangible common stockholders' equity

 

$

637,601

 

 

$

612,475

 

 

$

622,395

 

 

$

609,735

 

 

$

594,027

 

 

$

637,601

 

 

$

594,027

 

Tangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

6,540,602

 

 

$

6,750,125

 

 

$

6,390,652

 

 

$

6,496,513

 

 

$

6,393,518

 

 

$

6,540,602

 

 

$

6,393,518

 

Less: Goodwill and other intangibles

 

 

169,034

 

 

 

170,882

 

 

 

172,631

 

 

 

174,523

 

 

 

176,470

 

 

 

169,034

 

 

 

176,470

 

Tangible assets

 

$

6,371,568

 

 

$

6,579,243

 

 

$

6,218,021

 

 

$

6,321,990

 

 

$

6,217,048

 

 

$

6,371,568

 

 

$

6,217,048

 

Average tangible common stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total stockholders' equity

 

$

810,490

 

 

$

806,452

 

 

$

805,593

 

 

$

791,111

 

 

$

775,879

 

 

$

808,482

 

 

$

770,653

 

Less: Average preferred stock

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

Less: Average goodwill and other intangibles

 

 

169,906

 

 

 

171,795

 

 

 

173,536

 

 

 

175,443

 

 

 

177,440

 

 

 

170,845

 

 

 

178,428

 

Average tangible common stockholders' equity

 

$

630,146

 

 

$

624,219

 

 

$

621,619

 

 

$

605,230

 

 

$

588,001

 

 

$

627,199

 

 

$

581,787

 

Average tangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total assets

 

$

6,720,492

 

 

$

6,587,765

 

 

$

6,400,621

 

 

$

6,401,290

 

 

$

6,186,974

 

 

$

6,654,495

 

 

$

5,876,463

 

Less: Average goodwill and other intangibles

 

 

169,906

 

 

 

171,795

 

 

 

173,536

 

 

 

175,443

 

 

 

177,440

 

 

 

170,845

 

 

 

178,428

 

Average tangible assets

 

$

6,550,586

 

 

$

6,415,970

 

 

$

6,227,085

 

 

$

6,225,847

 

 

$

6,009,534

 

 

$

6,483,650

 

 

$

5,698,035

 

Tangible net income available to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common stockholders

 

$

28,297

 

 

$

21,602

 

 

$

12,095

 

 

$

12,875

 

 

$

8,944

 

 

$

49,899

 

 

$

11,714

 

Add: After-tax intangible asset amortization

 

 

1,344

 

 

 

1,272

 

 

 

1,365

 

 

 

1,405

 

 

 

1,365

 

 

 

2,616

 

 

 

2,731

 

Tangible net income available to common stockholders

 

$

29,641

 

 

$

22,874

 

 

$

13,460

 

 

$

14,280

 

 

$

10,309

 

 

$

52,515

 

 

$

14,445

 

Adjusted tangible net income available to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible net income available to common stockholders

 

$

29,641

 

 

$

22,874

 

 

$

13,460

 

 

$

14,280

 

 

$

10,309

 

 

$

52,515

 

 

$

14,445

 

Impairment charges on assets held for sale

 

 

1,942

 

 

 

604

 

 

 

4,022

 

 

 

32

 

 

 

 

 

 

2,546

 

 

 

715

 

Tax benefit on significant items

 

 

(529

)

 

 

(165

)

 

 

(1,120

)

 

 

(9

)

 

 

 

 

 

(694

)

 

 

(199

)

Adjusted tangible net income available to common stockholders

 

$

31,054

 

 

$

23,313

 

 

$

16,362

 

 

$

14,303

 

 

$

10,309

 

 

$

54,367

 

 

$

14,961

 

BYLINE BANCORP, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited)

 

 

 

As of or For the Three Months Ended

 

As of or For the Six Months Ended

(dollars in thousands, except share and per share data, ratios annualized, where applicable)

 

June 30,

2021

 

March 31,

2021

 

December 31,

2020

 

September 30,

2020

 

June 30,

2020

 

June 30,

2021

 

June 30,

2020

Pre-tax pre-provision return on average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax pre-provision net income

 

$

36,195

 

 

$

33,540

 

 

$

26,689

 

 

$

34,071

 

 

$

28,385

 

 

$

69,735

 

 

$

46,856

 

Average total assets

 

 

6,720,492

 

 

 

6,587,765

 

 

 

6,400,621

 

 

 

6,401,290

 

 

 

6,186,974

 

 

 

6,654,495

 

 

 

5,876,463

 

Pre-tax pre-provision return on average assets

 

 

2.16

%

 

 

2.06

%

 

 

1.66

%

 

 

2.12

%

 

 

1.85

%

 

 

2.11

%

 

 

1.60

%

Adjusted pre-tax pre-provision return on average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted pre-tax pre-provision net income

 

$

38,137

 

 

$

34,144

 

 

$

30,711

 

 

$

34,103

 

 

$

28,385

 

 

$

72,281

 

 

$

47,571

 

Average total assets

 

 

6,720,492

 

 

 

6,587,765

 

 

 

6,400,621

 

 

 

6,401,290

 

 

 

6,186,974

 

 

 

6,654,495

 

 

 

5,876,463

 

Adjusted pre-tax pre-provision return on average assets

 

 

2.28

%

 

 

2.10

%

 

 

1.91

%

 

 

2.12

%

 

 

1.85

%

 

 

2.19

%

 

 

1.63

%

Net interest margin, fully taxable equivalent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income, fully taxable equivalent

 

$

58,443

 

 

$

56,890

 

 

$

56,260

 

 

$

53,746

 

 

$

52,797

 

 

$

115,333

 

 

$

105,764

 

Total average interest-earning assets

 

 

6,231,616

 

 

 

6,097,712

 

 

 

5,913,746

 

 

 

5,916,554

 

 

 

5,703,569

 

 

 

6,165,033

 

 

 

5,400,757

 

Net interest margin, fully taxable equivalent

 

 

3.76

%

 

 

3.78

%

 

 

3.78

%

 

 

3.61

%

 

 

3.72

%

 

 

3.77

%

 

 

3.94

%

Non-interest income to total revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income

 

$

21,002

 

 

$

15,742

 

 

$

17,690

 

 

$

22,234

 

 

$

12,829

 

 

$

36,744

 

 

$

22,136

 

Total revenues

 

 

79,176

 

 

 

72,382

 

 

 

73,710

 

 

 

75,758

 

 

 

65,438

 

 

 

151,558

 

 

 

127,570

 

Non-interest income to total revenues

 

 

26.53

%

 

 

21.75

%

 

 

24.00

%

 

 

29.35

%

 

 

19.61

%

 

 

24.24

%

 

 

17.35

%

Adjusted non-interest expense to average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted non-interest expense

 

$

41,039

 

 

$

38,238

 

 

$

42,999

 

 

$

41,655

 

 

$

37,053

 

 

$

79,277

 

 

$

79,999

 

Average total assets

 

 

6,720,492

 

 

 

6,587,765

 

 

 

6,400,621

 

 

 

6,401,290

 

 

 

6,186,974

 

 

 

6,654,495

 

 

 

5,876,463

 

Adjusted non-interest expense to average assets

 

 

2.45

%

 

 

2.35

%

 

 

2.67

%

 

 

2.59

%

 

 

2.41

%

 

 

2.40

%

 

 

2.74

%

Adjusted efficiency ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted non-interest expense excluding amortization of intangible assets

 

$

39,191

 

 

$

36,489

 

 

$

41,107

 

 

$

39,708

 

 

$

35,161

 

 

$

75,680

 

 

$

76,214

 

Total revenues

 

 

79,176

 

 

 

72,382

 

 

 

73,710

 

 

 

75,758

 

 

 

65,438

 

 

 

151,558

 

 

 

127,570

 

Adjusted efficiency ratio

 

 

49.50

%

 

 

50.41

%

 

 

55.77

%

 

 

52.42

%

 

 

53.73

%

 

 

49.93

%

 

 

59.74

%

Adjusted return on average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

 

$

29,905

 

 

$

22,237

 

 

$

15,193

 

 

$

13,094

 

 

$

9,139

 

 

$

52,142

 

 

$

12,621

 

Average total assets

 

 

6,720,492

 

 

 

6,587,765

 

 

 

6,400,621

 

 

 

6,401,290

 

 

 

6,186,974

 

 

 

6,654,495

 

 

 

5,876,463

 

Adjusted return on average assets

 

 

1.78

%

 

 

1.37

%

 

 

0.94

%

 

 

0.81

%

 

 

0.59

%

 

 

1.58

%

 

 

0.43

%

Adjusted return on average stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

 

$

29,905

 

 

$

22,237

 

 

$

15,193

 

 

$

13,094

 

 

$

9,139

 

 

$

52,142

 

 

$

12,621

 

Average stockholders' equity

 

 

810,490

 

 

 

806,452

 

 

 

805,593

 

 

 

791,111

 

 

 

775,879

 

 

 

808,482

 

 

 

770,653

 

Adjusted return on average stockholders' equity

 

 

14.80

%

 

 

11.18

%

 

 

7.50

%

 

 

6.58

%

 

 

4.74

%

 

 

13.01

%

 

 

3.29

%

Tangible common equity to tangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity

 

$

637,601

 

 

$

612,475

 

 

$

622,395

 

 

$

609,735

 

 

$

594,027

 

 

$

637,601

 

 

$

594,027

 

Tangible assets

 

 

6,371,568

 

 

 

6,579,243

 

 

 

6,218,021

 

 

 

6,321,990

 

 

 

6,217,048

 

 

 

6,371,568

 

 

 

6,217,048

 

Tangible common equity to tangible assets

 

 

10.01

%

 

 

9.31

%

 

 

10.01

%

 

 

9.64

%

 

 

9.55

%

 

 

10.01

%

 

 

9.55

%

Return on average tangible common stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible net income available to common stockholders

 

$

29,641

 

 

$

22,874

 

 

$

13,460

 

 

$

14,280

 

 

$

10,309

 

 

$

52,515

 

 

$

14,445

 

Average tangible common stockholders' equity

 

 

630,146

 

 

 

624,219

 

 

 

621,619

 

 

 

605,230

 

 

 

588,001

 

 

 

627,199

 

 

 

581,787

 

Return on average tangible common stockholders' equity

 

 

18.87

%

 

 

14.86

%

 

 

8.61

%

 

 

9.39

%

 

 

7.05

%

 

 

16.88

%

 

 

4.99

%

Adjusted return on average tangible common stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted tangible net income available to common stockholders

 

$

31,054

 

 

$

23,313

 

 

$

16,362

 

 

$

14,303

 

 

$

10,309

 

 

$

54,367

 

 

$

14,961

 

Average tangible common stockholders' equity

 

 

630,146

 

 

 

624,219

 

 

 

621,619

 

 

 

605,230

 

 

 

588,001

 

 

 

627,199

 

 

 

581,787

 

Adjusted return on average tangible common stockholders' equity

 

 

19.77

%

 

 

15.15

%

 

 

10.47

%

 

 

9.40

%

 

 

7.05

%

 

 

17.48

%

 

 

5.17

%

Tangible book value per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity

 

$

637,601

 

 

$

612,475

 

 

$

622,395

 

 

$

609,735

 

 

$

594,027

 

 

$

637,601

 

 

$

594,027

 

Common shares outstanding

 

 

38,094,972

 

 

 

38,641,851

 

 

 

38,618,054

 

 

 

38,568,916

 

 

 

38,383,217

 

 

 

38,094,972

 

 

 

38,388,217

 

Tangible book value per share

 

$

16.74

 

 

$

15.85

 

 

$

16.12

 

 

$

15.81

 

 

$

15.47

 

 

$

16.74

 

 

$

15.47

 

 

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