Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Byline Bancorp, Inc. Reports Fourth Quarter and Full Year 2023 Financial Results By: Byline Bancorp, Inc. via Business Wire January 25, 2024 at 16:47 PM EST Fourth quarter net income of $29.6 million, $0.68 diluted earnings per share; Full year net income of $107.9 million, $2.67 diluted earnings per share Byline Bancorp, Inc. (NYSE: BY), today reported: For the quarter Full Year Highlights 4Q23 3Q23 4Q22 Financial Results (in thousands) • Net income increased $20.1 million, or 22.9% Net interest income $ 86,285 $ 92,452 $ 76,604 Non-interest income 14,503 12,376 11,455 • Positive operating leverage of 6.1% Total Revenue(1) 100,788 104,828 88,059 driven by 28.0% increase in PTPP Non-interest expense 53,584 57,891 50,500 Pre-tax pre-provision net income (PTPP)(1) 47,204 46,937 37,559 • Net interest income up $65.3 million, Provision for credit losses 7,235 8,803 5,826 or 24.6%; NIM up 31 bps to 4.31% Provision for income taxes 10,365 9,912 7,366 Net Income $ 29,604 $ 28,222 $ 24,367 • Assets increased by $1.5 billion, through organic growth and Inland acquisition Per Share Diluted EPS $ 0.68 $ 0.65 $ 0.65 4Q23 Income Statement Highlights Dividends declared per common share 0.09 0.09 0.09 • Adjusted net income(1) of $31.8 million, Book value per share 22.62 21.04 20.43 or $0.73 per adjusted diluted share(1) Tangible book value per share(1) 17.98 16.35 16.19 • Record PTPP(1) of $47.2 million Balance Sheet & Credit Quality Total deposits $ 7,176,999 $ 6,953,690 $ 5,695,121 • Adjusted efficiency ratio(1) of 48.64% Total loans and leases 6,702,311 6,620,602 5,469,081 Net charge-offs 12,186 5,430 3,179 4Q23 Balance Sheet Highlights Allowance for credit losses (ACL) 101,686 105,696 81,924 • Deposit growth of $223.3 million, or 12.7%(2) ACL to total loans and leases held for investment 1.52% 1.60% 1.51% • Loan growth of $81.7 million, or 4.9%(2) Select Ratios Efficiency ratio(1) 51.63% 53.75% 55.53% • Loan/deposit ratio of 93.39%, down 182 bps Return on average assets (ROAA) 1.34% 1.30% 1.33% Return on average stockholders' equity 12.56% 12.11% 12.92% • Reduced reliance on Brokered CDs and FHLB Return on average tangible common equity(1) 16.68% 16.15% 17.21% advances, down $384.1 million Net Interest Margin (NIM) 4.08% 4.46% 4.39% Common equity to total assets 11.15% 10.29% 10.40% • Common equity to assets of 11.15%; Tangible common equity to tangible assets(1) 9.06% 8.18% 8.42% TCE/TA(1) of 9.06%, up 88 bps Common Equity Tier 1 10.35% 10.08% 10.20% (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, “During 2023, we completed a number of strategic initiatives, including the successful merger and integration of Inland Bancorp, Inc. and delivered sound fourth quarter and strong full-year financial results. We were able to meet the needs of our customers and the markets we serve as total deposits increased $1.5 billion and total loans and leases increased $1.2 billion during the year. This stable balance sheet growth helped us achieve the highest level of revenue in Byline's history. We enter 2024 on solid footing and with great momentum to continue growing the value of our franchise.” Alberto J. Paracchini, President of Byline Bancorp, added, “We are pleased to end the year delivering strong earnings, balanced deposit and loan and lease growth, robust profitability, and disciplined expense management. We remain resolute in serving our customers’ financial needs while diligently focusing on maintaining our asset quality, capital and liquidity positions. I want to thank everyone who works at Byline for their dedication, talent, and contributions to another successful year.” Board Authorizes New Stock Repurchase Program On December 6, 2023, the Company's Board of Directors approved a new stock repurchase program that authorizes the Company to purchase up to 1.25 million shares of the Company's outstanding common stock. The new program is effective January 1, 2024 until December 31, 2024. Under the previous stock repurchase program that expired on December 31, 2023, the Company did not repurchase any shares during 2023. Board Declares Cash Dividend of $0.09 per Share On January 23, 2024, the Company's Board of Directors declared a cash dividend of $0.09 per share, payable on February 20, 2024, to stockholders of record of the Company's common stock as of February 6, 2024. STATEMENTS OF OPERATIONS HIGHLIGHTS Net Interest Income Net interest income for the fourth quarter of 2023 was $86.3 million, a decrease of $6.2 million, or 6.7%, from the third quarter of 2023. The decrease in net interest income was primarily due to an increase of $6.1 million in deposit interest expense due to growth and higher rates, and a decrease of $1.4 million in interest income and fees on loans and leases mainly due to lower accretion income on acquired loans of $5.2 million, offset by growth. Tax-equivalent net interest margin(1) for the fourth quarter of 2023 was 4.09%, a decrease of 38 basis points compared to the third quarter of 2023. Total net loan accretion income impact on the margin contributed 24 basis points to the net interest margin for the current quarter compared to 50 basis points for the prior quarter. The average cost of total deposits was 2.42% for the fourth quarter of 2023, an increase of 29 basis points compared to the third quarter of 2023, as a result of higher rates on money market accounts and time deposits. Average non-interest-bearing demand deposits were 27.5% of average total deposits for the current quarter compared to 28.8% during the prior quarter. Net interest income for the year ended December 31, 2023 was $330.6 million, an increase of $65.3 million, or 24.6%, from the year ended December 31, 2022. The increase in net interest income was primarily due to an increase of $167.6 million in interest income and fees on loans and leases due to growth and accretion income on acquired loans; partially offset by an increase of $101.6 million in deposit interest expense due to higher rates paid and growth. Tax-equivalent net interest margin(1) for the year ended December 31, 2023 was 4.32%, an increase of 31 basis points compared to year ended December 31, 2022. Total net loan accretion income impact on the margin contributed 22 basis points to the net interest margin for the current year compared to seven basis points for the prior year. The average cost of total deposits was 1.90% for the year ended December 31, 2023, an increase of 154 basis points compared to the year ended December 31, 2022, as a result of higher rates on money market accounts and time deposits. Average non-interest-bearing demand deposits were 30.7% of average total deposits for the current year compared to 40.4% during the prior year. Provision for Credit Losses The provision for credit losses was $7.2 million for the fourth quarter of 2023, a decrease of $1.6 million compared to $8.8 million for the third quarter of 2023, mainly attributed to a $2.7 million provision allocated for the acquired non-credit-deteriorated loans resulting from acquisition accounting taken in the prior quarter, partially offset by impairments on non-performing loans. The provision for credit losses for the current quarter is comprised of a provision for loan and lease losses of $8.2 million and a recapture for unfunded commitments of $940,000. The provision for credit losses was $31.7 million for the year ended December 31, 2023, an increase of $7.8 million compared to $23.9 million for the year ended December 31, 2022, mainly attributed to an increase in non-performing loans and acquired non-credit-deteriorated loans. The provision for credit losses for the current year is comprised of a provision for loan and lease losses of $32.2 million and a recapture for unfunded commitments of $567,000. (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. Non-interest Income Non-interest income for the fourth quarter of 2023 was $14.5 million, an increase of $2.1 million, or 17.2%, compared to $12.4 million for the third quarter of 2023. The increase in total non-interest income was primarily due to a $2.4 million decrease in the downward valuation of the loan servicing asset reflecting lower discount rate and improved secondary market conditions, and a $1.2 million gain on the change in fair value of equity securities, partially offset by a decrease of $993,000 in the net gains on sales of loans due to a lower volume of loans sold. During the fourth quarter of 2023, we sold $89.1 million of U.S. government guaranteed loans compared to $101.1 million during the third quarter of 2023. Non-interest income for the year ended December 31, 2023 was $56.3 million, a decrease of $1.0 million, or 1.7%, compared to $57.3 million for the year ended December 31, 2022. The decrease in total non-interest income was primarily due to a decrease in net gains on sales of loans of $9.1 million, partially offset by a $6.7 million decrease in the downward valuation on the loan servicing asset, reflecting a lower discount rate and improved secondary market conditions. During the current year, we sold $348.4 million of U.S. government guaranteed loans compared to $382.2 million during the prior year. Non-interest Expense Non-interest expense for the fourth quarter of 2023 was $53.6 million, a decrease of $4.3 million, or 7.4%, from $57.9 million for the third quarter of 2023. The decrease in total non-interest expense was mainly due to a decrease of $3.0 million in salaries and employee benefits, and decreases of $1.5 million in both data processing and legal, audit and other professional, primarily driven by merger-related expenses taken in the third quarter. Our efficiency ratio was 51.63% for the fourth quarter of 2023 compared to 53.75% for the third quarter of 2023, an improvement of 212 basis points. Excluding significant items, our adjusted efficiency ratio(1) for the fourth quarter 2023 was 48.64%, compared to 47.35% for the third quarter of 2023. Non-interest expense for the year ended December 31, 2023 was $209.6 million, an increase of $25.5 million, or 13.9%, from $184.1 million for the year ended December 31, 2022. The increase in total non-interest expense was mainly due to the Inland acquisition. Our efficiency ratio was 52.62% for the year ended December 31, 2023 compared to 54.99% for the year ended December 31, 2022, an improvement of 237 basis points. Excluding significant items, our adjusted efficiency ratio(1) for the current year was 49.61%, compared to 54.70% for the prior year. Income Taxes We recorded income tax expense of $10.4 million during the fourth quarter of 2023, compared to $9.9 million during the third quarter of 2023. The effective tax rate was 25.9% and 26.0% for the fourth quarter of 2023 and third quarter of 2023, respectively. We recorded income tax expense of $37.8 million during the year ended December 31, 2023, compared to $26.7 million during the year ended December 31, 2022. The effective tax rate was 25.9% and 23.3% for the current year and prior year, respectively. (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 $8.9 billion as of December 31, 2023, a decrease of $61.4 million, or 0.7%, compared to $8.9 billion at September 30, 2023 and an increase of $1.5 billion from $7.4 billion at December 31, 2022. The current quarter decrease was primarily due to a decrease in cash and cash equivalents of $202.8 million due to cash management strategies, offset by an increase in net loans and leases of $75.0 million mainly due to the increases in commercial banking and lease financings, and an increase in securities available-for-sale of $102.6 million, driven by an increase in fair values. The increase from the prior year is primarily due to the Inland acquisition and organic loan and lease growth. Non-performing loans and leases were $64.1 million at December 31, 2023, an increase of $12.0 million from $52.1 million at September 30, 2023, and $28.0 million from $36.0 million at December 31, 2022. The increases were primarily the result of increases to purchased credit deteriorated loans and increases in non-performing commercial real estate loans and commercial and industrial loans. Allowance for Credit Losses ("ACL") - Loans and Leases The ACL was $101.7 million as of December 31, 2023, a decrease of $4.0 million, or 3.8%, from $105.7 million at September 30, 2023, mainly due to net charge-offs. The ACL increase of $19.8 million from $81.9 million as of December 31, 2022 is mainly due to loan growth, adjustment for acquired purchase credit deteriorated loans, and an increase in non-performing loans. Net charge-offs of loans and leases during the fourth quarter of 2023 were $12.2 million, or 0.73% of average loans and leases, on an annualized basis. This was an increase of $6.8 million compared to net charge-offs of $5.4 million, or 0.33% of average loans and leases, during the third quarter of 2023. Increases in the current quarter are primarily due to the resolution of impaired commercial and industrial loans and commercial real estate loans. Net charge-offs of loans and leases during the year ended December 31, 2023 were $23.1 million, or 0.38% of average loans and leases. This was an increase of $15.1 million compared to net charge-offs of $7.9 million, or 0.16% of average loans and leases, during the year ended December 31, 2022. Increases for the full year were mainly driven by resolutions on purchased credit deteriorated loans and commercial real estate loans. Deposits and Other Liabilities Total deposits increased $223.3 million to $7.2 billion at December 31, 2023 compared to $7.0 billion at September 30, 2023 and $5.7 billion as of December 31, 2022. The increase in deposits in the current quarter was mainly due to organic growth. Time deposit growth of $127.2 million was principally due to increased personal time deposits. Money market growth of $203.8 million was due to increases in consumer and commercial deposits. Non-interest-bearing demand deposits decreased $54.0 million primarily due to lower consumer deposits. Increases for the full year were primarily driven by the Inland acquisition and organic deposit growth, and were impacted by shifting deposit mix due to the rising interest rate environment. Total borrowings and other liabilities were $714.8 million at December 31, 2023, a decrease of $354.8 million from $1.1 billion at September 30, 2023, and a decrease of $187.0 million from $902.0 million at December 31, 2022. These decreases were primarily driven by lower Federal Home Loan Bank advances. Stockholders’ Equity Total stockholders’ equity was $990.2 million at December 31, 2023, increase of $70.2 million from $919.9 million at September 30, 2023, and an increase of $224.5 million from December 31, 2022. The quarterly increase was primarily due to increases in other comprehensive income and retained earnings as a result of net income. The full year increase was primarily due to merger consideration and retained earnings as a result of 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, January 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 183253. A recorded replay can be accessed through February 9, 2024, by dialing (866) 813-9403; passcode: 953063. A slide presentation relating to our fourth quarter 2023 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 $8.9 billion in assets and operates 48 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, 2022. Any forward-looking statement speaks only as of the date on which it is made, and Byline undertakes no obligation to update any forward-looking statement, whether to reflect events or circumstances after the date on which the statement is made, to reflect new information or the occurrence of unanticipated events, or otherwise unless required under the federal securities laws. BYLINE BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited) December 31, September 30, December 31, (dollars in thousands) 2023 2023 2022 ASSETS Cash and due from banks $ 60,431 $ 71,248 $ 62,274 Interest bearing deposits with other banks 165,705 357,640 117,079 Cash and cash equivalents 226,136 428,888 179,353 Equity and other securities, at fair value 8,743 7,902 7,989 Securities available-for-sale, at fair value 1,342,480 1,239,929 1,174,431 Securities held-to-maturity, at amortized cost 1,157 1,157 2,705 Restricted stock, at cost 16,304 30,505 28,202 Loans held for sale 18,005 7,299 47,823 Loans and leases: Loans and leases 6,684,306 6,613,303 5,421,258 Allowance for credit losses - loans and leases (101,686 ) (105,696 ) (81,924 ) Net loans and leases 6,582,620 6,507,607 5,339,334 Servicing assets, at fair value 19,844 19,743 19,172 Premises and equipment, net 66,627 67,121 56,798 Other real estate owned, net 1,200 1,671 4,717 Goodwill and other intangible assets, net 203,478 205,028 158,887 Bank-owned life insurance 96,900 96,268 82,093 Deferred tax assets, net 50,058 89,841 68,213 Accrued interest receivable and other assets 248,415 240,409 193,224 Total assets $ 8,881,967 $ 8,943,368 $ 7,362,941 LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES Non-interest-bearing demand deposits $ 1,905,876 $ 1,959,855 $ 2,138,645 Interest-bearing deposits 5,271,123 4,993,835 3,556,476 Total deposits 7,176,999 6,953,690 5,695,121 Other borrowings 395,190 713,233 640,399 Subordinated notes, net 73,866 73,822 73,691 Junior subordinated debentures issued to capital trusts, net 70,452 70,336 37,338 Accrued expenses and other liabilities 175,309 212,342 150,576 Total liabilities 7,891,816 8,023,423 6,597,125 STOCKHOLDERS’ EQUITY Common stock 451 450 389 Additional paid-in capital 710,488 708,615 598,297 Retained earnings 429,036 403,368 335,794 Treasury stock (49,707 ) (50,329 ) (51,114 ) Accumulated other comprehensive loss, net of tax (100,117 ) (142,159 ) (117,550 ) Total stockholders’ equity 990,151 919,945 765,816 Total liabilities and stockholders’ equity $ 8,881,967 $ 8,943,368 $ 7,362,941 BYLINE BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three Months Ended Year Ended (dollars in thousands, December 31, September 30, December 31, December 31, December 31, except per share data) 2023 2023 2022 2023 2022 INTEREST AND DIVIDEND INCOME Interest and fees on loans and leases $ 124,042 $ 125,465 $ 85,720 $ 440,984 $ 273,412 Interest on securities 9,227 8,415 6,569 30,801 25,390 Other interest and dividend income 2,345 2,710 1,515 7,693 2,757 Total interest and dividend income 135,614 136,590 93,804 479,478 301,559 INTEREST EXPENSE Deposits 43,252 37,163 10,610 121,436 19,796 Other borrowings 3,051 3,981 4,598 17,161 9,322 Subordinated notes and debentures 3,026 2,994 1,992 10,260 7,111 Total interest expense 49,329 44,138 17,200 148,857 36,229 Net interest income 86,285 92,452 76,604 330,621 265,330 PROVISION FOR CREDIT LOSSES 7,235 8,803 5,826 31,653 23,879 Net interest income after provision for credit losses 79,050 83,649 70,778 298,968 241,451 NON-INTEREST INCOME Fees and service charges on deposits 2,486 2,372 2,081 9,211 8,152 Loan servicing revenue 3,377 3,369 3,293 13,503 13,479 Loan servicing asset revaluation (1,234 ) (3,646 ) (3,534 ) (5,089 ) (11,743 ) ATM and interchange fees 1,082 1,205 1,250 4,462 4,437 Net realized gains on securities available-for-sale — — — — 50 Change in fair value of equity securities, net 841 (313 ) 710 1,071 (603 ) Net gains on sales of loans 5,480 6,473 5,509 22,805 31,899 Wealth management and trust income 1,256 939 864 4,158 3,807 Other non-interest income 1,215 1,977 1,282 6,194 7,836 Total non-interest income 14,503 12,376 11,455 56,315 57,314 NON-INTEREST EXPENSE Salaries and employee benefits 31,974 34,969 31,808 126,979 118,051 Occupancy and equipment expense, net 4,346 5,314 3,532 18,508 16,988 Impairment charge on assets held for sale 1,980 — 372 2,000 372 Loan and lease related expenses 649 836 1,126 2,936 1,707 Legal, audit, and other professional fees 2,352 3,805 3,204 12,946 10,357 Data processing 4,982 6,472 3,406 19,509 13,358 Net loss recognized on other real estate owned and other related expenses 89 111 221 385 708 Other intangible assets amortization expense 1,550 1,551 1,596 6,011 6,671 Other non-interest expense 5,662 4,833 5,235 20,329 15,870 Total non-interest expense 53,584 57,891 50,500 209,603 184,082 INCOME BEFORE PROVISION FOR INCOME TAXES 39,969 38,134 31,733 145,680 114,683 PROVISION FOR INCOME TAXES 10,365 9,912 7,366 37,802 26,729 NET INCOME $ 29,604 $ 28,222 $ 24,367 $ 107,878 $ 87,954 Dividends on preferred shares — — — — 196 INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 29,604 $ 28,222 $ 24,367 $ 107,878 $ 87,758 EARNINGS PER COMMON SHARE Basic $ 0.69 $ 0.66 $ 0.66 $ 2.69 $ 2.37 Diluted $ 0.68 $ 0.65 $ 0.65 $ 2.67 $ 2.34 BYLINE BANCORP, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (unaudited) As of or For the Three Months Ended As of or For the Year Ended (dollars in thousands, except share December 31, September 30, December 31, December 31, December 31, and per share data) 2023 2023 2022 2023 2022 Earnings per Common Share Basic earnings per common share $ 0.69 $ 0.66 $ 0.66 $ 2.69 $ 2.37 Diluted earnings per common share $ 0.68 $ 0.65 $ 0.65 $ 2.67 $ 2.34 Adjusted diluted earnings per common share(1)(3) $ 0.73 $ 0.77 $ 0.67 $ 2.89 $ 2.36 Weighted average common shares outstanding (basic) 43,065,294 43,025,927 36,856,221 40,045,208 36,972,972 Weighted average common shares outstanding (diluted) 43,537,778 43,458,110 37,360,113 40,445,553 37,476,120 Common shares outstanding 43,764,056 43,719,203 37,492,775 43,764,056 37,492,775 Cash dividends per common share $ 0.09 $ 0.09 $ 0.09 $ 0.36 $ 0.36 Dividend payout ratio on common stock 13.24 % 13.85 % 13.85 % 13.48 % 15.38 % Book value per common share $ 22.62 $ 21.04 $ 20.43 $ 22.62 $ 20.43 Tangible book value per common share(1) $ 17.98 $ 16.35 $ 16.19 $ 17.98 $ 16.19 Key Ratios and Performance Metrics (annualized where applicable) Net interest margin 4.08 % 4.46 % 4.39 % 4.31 % 4.00 % Net interest margin, fully taxable equivalent (1)(4) 4.09 % 4.47 % 4.40 % 4.32 % 4.01 % Average cost of deposits 2.42 % 2.13 % 0.73 % 1.90 % 0.36 % Efficiency ratio(1)(2) 51.63 % 53.75 % 55.53 % 52.62 % 54.99 % Adjusted efficiency ratio(1)(2)(3) 48.64 % 47.35 % 54.50 % 49.61 % 54.70 % Non-interest income to total revenues(1) 14.39 % 11.81 % 13.01 % 14.55 % 17.76 % Non-interest expense to average assets 2.42 % 2.66 % 2.76 % 2.60 % 2.62 % Adjusted non-interest expense to average assets(1)(3) 2.28 % 2.35 % 2.71 % 2.46 % 2.61 % Return on average stockholders' equity 12.56 % 12.11 % 12.92 % 12.50 % 11.33 % Adjusted return on average stockholders' equity(1)(3) 13.50 % 14.30 % 13.34 % 13.53 % 11.43 % Return on average assets 1.34 % 1.30 % 1.33 % 1.34 % 1.25 % Adjusted return on average assets(1)(3) 1.44 % 1.53 % 1.37 % 1.45 % 1.26 % Pre-tax pre-provision return on average assets(1) 2.13 % 2.16 % 2.05 % 2.20 % 1.97 % Adjusted pre-tax pre-provision return on average assets(1)(3) 2.27 % 2.46 % 2.10 % 2.35 % 1.99 % Return on average tangible common stockholders' equity(1) 16.68 % 16.15 % 17.21 % 16.46 % 15.15 % Adjusted return on average tangible common stockholders' equity(1)(3) 17.89 % 18.95 % 17.75 % 17.76 % 15.28 % Non-interest-bearing deposits to total deposits 26.56 % 28.18 % 37.55 % 26.56 % 37.55 % Loans and leases held for sale and loans and lease held for investment to total deposits 93.39 % 95.21 % 96.03 % 93.39 % 96.03 % Deposits to total liabilities 90.94 % 86.67 % 86.33 % 90.94 % 86.33 % Deposits per branch $ 149,521 $ 144,869 $ 149,872 $ 149,521 $ 149,872 Asset Quality Ratios Non-performing loans and leases to total loans and leases held for investment, net before ACL 0.96 % 0.79 % 0.66 % 0.96 % 0.66 % ACL to total loans and leases held for investment, net before ACL 1.52 % 1.60 % 1.51 % 1.52 % 1.51 % Net charge-offs to average total loans and leases held for investment, net before ACL - loans and leases 0.73 % 0.33 % 0.24 % 0.38 % 0.16 % Capital Ratios Common equity to total assets 11.15 % 10.29 % 10.40 % 11.15 % 10.40 % Tangible common equity to tangible assets(1) 9.06 % 8.18 % 8.42 % 9.06 % 8.42 % Leverage ratio 10.86 % 10.75 % 10.29 % 10.86 % 10.29 % Common equity tier 1 capital ratio 10.35 % 10.08 % 10.20 % 10.35 % 10.20 % Tier 1 capital ratio 11.39 % 11.12 % 10.85 % 11.39 % 10.85 % Total capital ratio 13.38 % 13.17 % 13.00 % 13.38 % 13.00 % (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 assets held for sale and 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 December 31, 2023 September 30, 2023 December 31, 2022 (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 $ 201,862 $ 1,822 3.58 % $ 195,019 $ 1,724 3.51 % $ 89,367 $ 234 1.04 % Loans and leases(1) 6,632,827 124,042 7.42 % 6,484,875 125,465 7.68 % 5,389,210 85,720 6.31 % Taxable securities 1,389,580 8,848 2.53 % 1,371,979 8,465 2.45 % 1,288,750 7,043 2.17 % Tax-exempt securities(2) 163,608 1,142 2.77 % 168,805 1,184 2.78 % 155,562 1,021 2.60 % Total interest-earning assets $ 8,387,877 $ 135,854 6.43 % $ 8,220,678 $ 136,838 6.60 % $ 6,922,889 $ 94,018 5.39 % Allowance for credit losses - loans and leases (106,474 ) (108,315 ) (81,815 ) All other assets 506,233 521,982 424,979 TOTAL ASSETS $ 8,787,636 $ 8,634,345 $ 7,266,053 LIABILITIES AND STOCKHOLDERS’ EQUITY Deposits Interest checking $ 570,706 $ 2,335 1.62 % $ 579,917 $ 2,208 1.51 % $ 596,627 $ 1,902 1.27 % Money market accounts 2,159,841 18,730 3.44 % 2,040,476 16,676 3.24 % 1,472,050 5,458 1.47 % Savings 560,372 208 0.15 % 594,555 228 0.15 % 647,536 243 0.15 % Time deposits 1,861,279 21,979 4.68 % 1,706,531 18,051 4.20 % 788,856 3,007 1.51 % Total interest-bearing deposits 5,152,198 43,252 3.33 % 4,921,479 37,163 3.00 % 3,505,069 10,610 1.20 % Other borrowings 395,711 3,051 3.06 % 463,561 3,981 3.41 % 514,518 4,598 3.55 % Subordinated notes and debentures 144,230 3,026 8.32 % 144,171 2,994 8.24 % 110,947 1,992 7.12 % Total borrowings 539,941 6,077 4.47 % 607,732 6,975 4.55 % 625,465 6,590 4.18 % Total interest-bearing liabilities $ 5,692,139 $ 49,329 3.44 % $ 5,529,211 $ 44,138 3.17 % $ 4,130,534 $ 17,200 1.65 % Non-interest-bearing demand deposits 1,950,644 1,987,996 2,235,464 Other liabilities 209,656 192,860 151,763 Total stockholders’ equity 935,197 924,278 748,292 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 8,787,636 $ 8,634,345 $ 7,266,053 Net interest spread(3) 2.99 % 3.43 % 3.74 % Net interest income, fully taxable equivalent $ 86,525 $ 92,700 $ 76,818 Net interest margin, fully taxable equivalent(2)(4) 4.09 % 4.47 % 4.40 % Less: Tax-equivalent adjustment 240 0.01 % 248 0.01 % 214 0.01 % Net interest income $ 86,285 $ 92,452 $ 76,604 Net interest margin(4) 4.08 % 4.46 % 4.39 % Net loan accretion impact on margin $ 5,110 0.24 % $ 10,276 0.50 % $ 369 0.02 % (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 YEAR-TO-DATE STATEMENT OF AVERAGE INTEREST-EARNING ASSETS AND AVERAGE INTEREST-BEARING LIABILITIES (unaudited) For the Year Ended December 31, 2023 December 31, 2022 (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 $ 157,754 $ 5,029 3.19 % $ 76,978 $ 547 0.71 % Loans and leases(1) 6,038,797 440,984 7.30 % 5,073,288 273,412 5.39 % Taxable securities 1,322,379 30,068 2.27 % 1,316,147 24,156 1.84 % Tax-exempt securities(2) 158,918 4,300 2.71 % 164,051 4,359 2.66 % Total interest-earning assets $ 7,677,848 $ 480,381 6.26 % $ 6,630,464 $ 302,474 4.56 % Allowance for credit losses - loans and leases (98,067 ) (74,233 ) All other assets 468,550 462,548 TOTAL ASSETS $ 8,048,331 $ 7,018,779 LIABILITIES AND STOCKHOLDERS’ EQUITY Deposits Interest checking $ 574,335 $ 9,212 1.60 % $ 593,903 $ 3,572 0.60 % Money market accounts 1,802,675 53,933 2.99 % 1,357,371 10,484 0.77 % Savings 585,820 883 0.15 % 658,968 649 0.10 % Time deposits 1,468,836 57,408 3.91 % 691,650 5,091 0.74 % Total interest-bearing deposits 4,431,666 121,436 2.74 % 3,301,892 19,796 0.60 % Other borrowings 484,984 17,125 3.53 % 478,374 9,308 1.95 % Federal funds purchased 685 36 5.30 % 630 14 2.32 % Subordinated notes and debentures 127,825 10,260 8.03 % 110,723 7,111 6.42 % Total borrowings 613,494 27,421 4.47 % 589,727 16,433 2.79 % Total interest-bearing liabilities $ 5,045,160 $ 148,857 2.95 % $ 3,891,619 $ 36,229 0.93 % Non-interest-bearing demand deposits 1,965,663 2,236,615 Other liabilities 174,416 114,320 Total stockholders’ equity 863,092 776,225 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 8,048,331 $ 7,018,779 Net interest spread(3) 3.31 % 3.63 % Net interest income, fully taxable equivalent $ 331,524 $ 266,245 Net interest margin, fully taxable equivalent(2)(4) 4.32 % 4.01 % Less: Tax-equivalent adjustment 903 0.01 % 915 0.01 % Net interest income $ 330,621 $ 265,330 Net interest margin(4) 4.31 % 4.00 % Net loan accretion impact on margin $ 16,726 0.22 % $ 4,555 0.07 % (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: December 31, 2023 September 30, 2023 December 31, 2022 (dollars in thousands) Amount % of Total Amount % of Total Amount % of Total Originated loans and leases: Commercial real estate $ 1,907,029 28.5 % $ 1,837,531 27.8 % $ 1,712,152 31.6 % Residential real estate 465,133 7.0 % 454,456 6.9 % 426,226 7.9 % Construction, land development, and other land 415,162 6.2 % 406,334 6.1 % 438,617 8.1 % Commercial and industrial 2,311,563 34.6 % 2,286,058 34.6 % 2,030,616 37.5 % Installment and other 2,919 0.0 % 2,968 0.0 % 1,410 0.0 % Leasing financing receivables 665,239 10.0 % 641,032 9.7 % 521,689 9.6 % Total originated loans and leases $ 5,767,045 86.3 % $ 5,628,379 85.1 % $ 5,130,710 94.7 % Purchased credit deteriorated loans: Commercial real estate $ 137,807 2.1 % $ 154,573 2.3 % $ 45,143 0.8 % Residential real estate 42,510 0.6 % 47,485 0.7 % 32,228 0.6 % Construction, land development, and other land 25,331 0.4 % 29,587 0.5 % 372 0.0 % Commercial and industrial 19,460 0.3 % 21,014 0.3 % 2,192 0.0 % Installment and other 125 0.0 % 125 0.0 % 140 0.0 % Total purchased credit deteriorated loans $ 225,233 3.4 % $ 252,784 3.8 % $ 80,075 1.4 % Acquired non-credit-deteriorated loans and leases: Commercial real estate $ 275,476 4.1 % $ 296,656 4.5 % $ 152,193 2.8 % Residential real estate 211,887 3.2 % 220,091 3.4 % 31,508 0.6 % Construction, land development, and other land 86,344 1.3 % 87,087 1.3 % — 0.0 % Commercial and industrial 117,538 1.7 % 127,253 1.9 % 24,266 0.5 % Installment and other 156 0.0 % 153 0.0 % 209 0.0 % Leasing financing receivables 627 0.0 % 900 0.0 % 2,297 0.0 % Total acquired non-credit-deteriorated loans and leases $ 692,028 10.3 % $ 732,140 11.1 % $ 210,473 3.9 % Total loans and leases $ 6,684,306 100.0 % $ 6,613,303 100.0 % $ 5,421,258 100.0 % Allowance for credit losses - loans and leases (101,686 ) (105,696 ) (81,924 ) Total loans and leases, net of allowance for credit losses - loans and leases $ 6,582,620 $ 6,507,607 $ 5,339,334 The following table presents the balance and activity within the allowance for credit losses - loans and lease for the periods indicated: Three Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, (dollars in thousands) 2023 2023 2022 2023 2022 ACL - loans and leases, beginning of period $ 105,696 $ 92,665 $ 79,704 $ 81,924 $ 55,012 Adjustment for acquired PCD loans — 10,596 — 10,596 — Adjustment for CECL adoption — — — — 12,168 Provision for credit losses - loans and leases 8,176 7,865 5,399 32,220 22,674 Net charge-offs - loans and leases (12,186 ) (5,430 ) (3,179 ) (23,054 ) (7,930 ) ACL - loans and leases, end of period $ 101,686 $ 105,696 $ 81,924 $ 101,686 $ 81,924 Net charge-offs - loans and leases to average total loans and leases held for investment, net before ACL 0.73 % 0.33 % 0.24 % 0.38 % 0.16 % Provision for credit losses - loans and leases to net charge-offs - loans and leases during the period 0.67 x 1.45 x 1.70 x 1.40 x 2.86 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: December 31, 2023 Change from (dollars in thousands) December 31, 2023 September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 Non-performing assets: Non-accrual loans and leases $ 64,107 $ 52,070 $ 36,027 23.1 % 77.9 % Past due loans and leases 90 days or more and still accruing interest — — — —% —% Total non-performing loans and leases $ 64,107 $ 52,070 $ 36,027 23.1 % 77.9 % Other real estate owned 1,200 1,671 4,717 (28.2 )% (74.6 )% Total non-performing assets $ 65,307 $ 53,741 $ 40,744 21.5 % 60.3 % Total non-performing loans and leases as a percentage of total loans and leases 0.96 % 0.79 % 0.66 % Total non-performing assets as a percentage of total assets 0.74 % 0.60 % 0.55 % Allowance for credit losses - loans and lease as a percentage of non-performing loans and leases 158.62 % 202.99 % 227.40 % Non-performing assets guaranteed by U.S. government: Non-accrual loans guaranteed $ 4,154 $ 3,588 $ 2,225 15.8 % 86.7 % Past due loans 90 days or more and still accruing interest guaranteed — — — —% —% Total non-performing loans guaranteed $ 4,154 $ 3,588 $ 2,225 15.8 % 86.7 % Total non-performing loans and leases not guaranteed as a percentage of total loans and leases 0.90 % 0.73 % 0.62 % Total non-performing assets not guaranteed as a percentage of total assets 0.69 % 0.56 % 0.52 % The following table presents the composition of deposits at the dates indicated: December 31, 2023 Change from (dollars in thousands) December 31, 2023 September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 Non-interest-bearing demand deposits $ 1,905,876 $ 1,959,855 $ 2,138,645 (2.8 )% (10.9 )% Interest-bearing checking accounts 577,609 592,771 592,098 (2.6 )% (2.4 )% Money market demand accounts 2,266,030 2,062,252 1,415,653 9.9 % 60.1 % Other savings 542,532 581,073 625,798 (6.6 )% (13.3 )% Time deposits (below $250,000) 1,520,082 1,446,485 762,250 5.0 % 99.4 % Time deposits ($250,000 and above) 364,870 311,254 160,677 17.4 % 127.1 % Total deposits $ 7,176,999 $ 6,953,690 $ 5,695,121 3.2 % 26.0 % BYLINE BANCORP, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited) Non-GAAP Financial Measures This release contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These measures include adjusted net income, adjusted diluted earnings per share, adjusted efficiency ratio, adjusted non-interest expense to average assets, tax-equivalent net interest margin, total revenue, non-interest income to total revenues, adjusted return on average stockholders’ equity, adjusted return on average assets, pre-tax pre-provision return on average assets, adjusted pre-tax pre-provision return on average assets, tangible book value per common share, tangible common equity to tangible assets, return on average tangible common stockholders' equity, and adjusted return on average tangible common stockholders' equity. Management believes that these non-GAAP financial measures provide useful information to management and investors that is supplementary to the Company’s financial condition, results of operations and cash flows computed in accordance with GAAP; however, management acknowledges that our non-GAAP financial measures have a number of limitations. As such, these disclosures should not be viewed as a substitute for results determined in accordance with GAAP financial measures that we and other companies use. Management also uses these measures for peer comparison. See below in the financial schedules included in this press release for a reconciliation of the non-GAAP financial measures to the comparable GAAP financial measures. Additionally, please refer to the Company’s Annual Report on Form 10-K for the detailed definitions of these non-GAAP financial measures. As of or For the Three Months Ended As of or For the Year Ended December 31, September 30, December 31, December 31, December 31, (dollars in thousands, except per share data) 2023 2023 2022 2023 2022 Net income and earnings per share excluding significant items: Reported Net Income $ 29,604 $ 28,222 $ 24,367 $ 107,878 $ 87,954 Significant items: Impairment charges on assets held for sale and ROU assets 1,981 394 372 2,395 372 Merger-related expenses 1,035 6,307 538 9,222 538 Tax benefit (793 ) (1,617 ) (118 ) (2,696 ) (118 ) Adjusted Net Income $ 31,827 $ 33,306 $ 25,159 $ 116,799 $ 88,746 Reported Diluted Earnings per Share $ 0.68 $ 0.65 $ 0.65 $ 2.67 $ 2.34 Significant items: Impairment charges on assets held for sale and ROU assets 0.05 0.01 0.01 0.06 0.01 Merger-related expenses 0.02 0.15 0.01 0.23 0.01 Tax benefit (0.02 ) (0.04 ) — (0.07 ) — Adjusted Diluted Earnings per Share $ 0.73 $ 0.77 $ 0.67 $ 2.89 $ 2.36 BYLINE BANCORP, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited) As of or For the Three Months Ended As of or For the Year Ended (dollars in thousands, except per share data, December 31, September 30, December 31, December 31, December 31, ratios annualized, where applicable) 2023 2023 2022 2023 2022 Adjusted non-interest expense: Non-interest expense $ 53,584 $ 57,891 $ 50,500 $ 209,603 $ 184,082 Less: Significant items Impairment charges on assets held for sale and ROU assets 1,981 394 372 2,395 372 Merger-related expenses 1,035 6,307 538 9,222 538 Adjusted non-interest expense $ 50,568 $ 51,190 $ 49,590 $ 197,986 $ 183,172 Adjusted non-interest expense excluding amortization of intangible assets: Adjusted non-interest expense $ 50,568 $ 51,190 $ 49,590 $ 197,986 $ 183,172 Less: Amortization of intangible assets 1,550 1,551 1,596 6,011 6,671 Adjusted non-interest expense excluding amortization of intangible assets $ 49,018 $ 49,639 $ 47,994 $ 191,975 $ 176,501 Pre-tax pre-provision net income: Pre-tax income $ 39,969 $ 38,134 $ 31,733 $ 145,680 $ 114,683 Add: Provision for credit losses 7,235 8,803 5,826 31,653 23,879 Pre-tax pre-provision net income $ 47,204 $ 46,937 $ 37,559 $ 177,333 $ 138,562 Adjusted pre-tax pre-provision net income: Pre-tax pre-provision net income $ 47,204 $ 46,937 $ 37,559 $ 177,333 $ 138,562 Add: Impairment charges on assets held for sale and ROU assets 1,981 394 372 2,395 372 Add: Merger-related expenses 1,035 6,307 538 9,222 538 Adjusted pre-tax pre-provision net income $ 50,220 $ 53,638 $ 38,469 $ 188,950 $ 139,472 Tax equivalent net interest income: Net interest income $ 86,285 $ 92,452 $ 76,604 $ 330,621 $ 265,330 Add: Tax-equivalent adjustment 240 248 214 903 915 Net interest income, fully taxable equivalent $ 86,525 $ 92,700 $ 76,818 $ 331,524 $ 266,245 Total revenue: Net interest income $ 86,285 $ 92,452 $ 76,604 $ 330,621 $ 265,330 Add: Non-interest income 14,503 12,376 11,455 56,315 $ 57,314 Total revenue $ 100,788 $ 104,828 $ 88,059 $ 386,936 $ 322,644 Tangible common stockholders' equity: Total stockholders' equity $ 990,151 $ 919,945 $ 765,816 $ 990,151 $ 765,816 Less: Goodwill and other intangibles 203,478 205,028 158,887 203,478 158,887 Tangible common stockholders' equity $ 786,673 $ 714,917 $ 606,929 $ 786,673 $ 606,929 Tangible assets: Total assets $ 8,881,967 $ 8,943,368 $ 7,362,941 $ 8,881,967 $ 7,362,941 Less: Goodwill and other intangibles 203,478 205,028 158,887 203,478 158,887 Tangible assets $ 8,678,489 $ 8,738,340 $ 7,204,054 $ 8,678,489 $ 7,204,054 Average tangible common stockholders' equity: Average total stockholders' equity $ 935,197 $ 924,278 $ 748,292 $ 863,092 $ 776,225 Less: Average preferred stock — — — — 2,459 Less: Average goodwill and other intangibles 204,191 202,978 159,680 180,717 162,203 Average tangible common stockholders' equity $ 731,006 $ 721,300 $ 588,612 $ 682,375 $ 611,563 Average tangible assets: Average total assets $ 8,787,636 $ 8,634,345 $ 7,266,053 $ 8,048,331 $ 7,018,779 Less: Average goodwill and other intangibles 204,191 202,978 159,680 180,717 162,203 Average tangible assets $ 8,583,445 $ 8,431,367 $ 7,106,373 $ 7,867,614 $ 6,856,576 Tangible net income available to common stockholders: Net income available to common stockholders $ 29,604 $ 28,222 $ 24,367 $ 107,878 $ 87,758 Add: After-tax intangible asset amortization 1,138 1,137 1,170 4,408 4,890 Tangible net income available to common stockholders $ 30,742 $ 29,359 $ 25,537 $ 112,286 $ 92,648 Adjusted tangible net income available to common stockholders: Tangible net income available to common stockholders $ 30,742 $ 29,359 $ 25,537 $ 112,286 $ 92,648 Impairment charges on assets held for sale and ROU assets 1,981 394 372 2,395 372 Merger-related expenses 1,035 6,307 538 9,222 538 Tax benefit on significant items (793 ) (1,617 ) (118 ) (2,696 ) (118 ) Adjusted tangible net income available to common stockholders $ 32,965 $ 34,443 $ 26,329 $ 121,207 $ 93,440 BYLINE BANCORP, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited) As of or For the Three Months Ended As of or For the Year Ended (dollars in thousands, except share and per share December 31, September 30, December 31, December 31, December 31, data, ratios annualized, where applicable) 2023 2023 2022 2023 2022 Pre-tax pre-provision return on average assets: Pre-tax pre-provision net income $ 47,204 $ 46,937 $ 37,559 $ 177,333 $ 138,562 Average total assets 8,787,636 8,634,345 7,266,053 8,048,331 7,018,779 Pre-tax pre-provision return on average assets 2.13 % 2.16 % 2.05 % 2.20 % 1.97 % Adjusted pre-tax pre-provision return on average assets: Adjusted pre-tax pre-provision net income $ 50,220 $ 53,638 $ 38,469 $ 188,950 $ 139,472 Average total assets 8,787,636 8,634,345 7,266,053 8,048,331 7,018,779 Adjusted pre-tax pre-provision return on average assets 2.27 % 2.46 % 2.10 % 2.35 % 1.99 % Net interest margin, fully taxable equivalent: Net interest income, fully taxable equivalent $ 86,525 $ 92,700 $ 76,818 $ 331,524 $ 266,245 Total average interest-earning assets 8,387,877 8,220,678 6,922,889 7,677,848 6,630,464 Net interest margin, fully taxable equivalent 4.09 % 4.47 % 4.40 % 4.32 % 4.01 % Non-interest income to total revenues: Non-interest income $ 14,503 $ 12,376 $ 11,455 $ 56,315 $ 57,314 Total revenues 100,788 104,828 88,059 386,936 322,644 Non-interest income to total revenues 14.39 % 11.81 % 13.01 % 14.55 % 17.76 % Adjusted non-interest expense to average assets: Adjusted non-interest expense $ 50,568 $ 51,190 $ 49,590 $ 197,986 $ 183,172 Average total assets 8,787,636 8,634,345 7,266,053 8,048,331 7,018,779 Adjusted non-interest expense to average assets 2.28 % 2.35 % 2.71 % 2.46 % 2.61 % Adjusted efficiency ratio: Adjusted non-interest expense excluding amortization of intangible assets $ 49,018 $ 49,639 $ 47,994 $ 191,975 $ 176,501 Total revenues 100,788 104,828 88,059 386,936 322,644 Adjusted efficiency ratio 48.64 % 47.35 % 54.50 % 49.61 % 54.70 % Adjusted return on average assets: Adjusted net income $ 31,827 $ 33,306 $ 25,159 $ 116,799 $ 88,746 Average total assets 8,787,636 8,634,345 7,266,053 8,048,331 7,018,779 Adjusted return on average assets 1.44 % 1.53 % 1.37 % 1.45 % 1.26 % Adjusted return on average stockholders' equity: Adjusted net income $ 31,827 $ 33,306 $ 25,159 $ 116,799 $ 88,746 Average stockholders' equity 935,197 924,278 748,292 863,092 776,225 Adjusted return on average stockholders' equity 13.50 % 14.30 % 13.34 % 13.53 % 11.43 % Tangible common equity to tangible assets: Tangible common equity $ 786,673 $ 714,917 $ 606,929 $ 786,673 $ 606,929 Tangible assets 8,678,489 8,738,340 7,204,054 8,678,489 7,204,054 Tangible common equity to tangible assets 9.06 % 8.18 % 8.42 % 9.06 % 8.42 % Return on average tangible common stockholders' equity: Tangible net income available to common stockholders $ 30,742 $ 29,359 $ 25,537 $ 112,286 $ 92,648 Average tangible common stockholders' equity 731,006 721,300 588,612 682,375 611,563 Return on average tangible common stockholders' equity 16.68 % 16.15 % 17.21 % 16.46 % 15.15 % Adjusted return on average tangible common stockholders' equity: Adjusted tangible net income available to common stockholders $ 32,965 $ 34,443 $ 26,329 $ 121,207 $ 93,440 Average tangible common stockholders' equity 731,006 721,300 588,612 682,375 611,563 Adjusted return on average tangible common stockholders' equity 17.89 % 18.95 % 17.75 % 17.76 % 15.28 % Tangible book value per share: Tangible common equity $ 786,673 $ 714,917 $ 606,929 $ 786,673 $ 606,929 Common shares outstanding 43,764,056 43,719,203 37,492,775 43,764,056 37,492,775 Tangible book value per share $ 17.98 $ 16.35 $ 16.19 $ 17.98 $ 16.19 View source version on businesswire.com: https://www.businesswire.com/news/home/20240125027265/en/Contacts Investors/Media: Brooks Rennie Investor Relations Director 312-660-5805 brennie@bylinebank.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Byline Bancorp, Inc. Reports Fourth Quarter and Full Year 2023 Financial Results By: Byline Bancorp, Inc. via Business Wire January 25, 2024 at 16:47 PM EST Fourth quarter net income of $29.6 million, $0.68 diluted earnings per share; Full year net income of $107.9 million, $2.67 diluted earnings per share Byline Bancorp, Inc. (NYSE: BY), today reported: For the quarter Full Year Highlights 4Q23 3Q23 4Q22 Financial Results (in thousands) • Net income increased $20.1 million, or 22.9% Net interest income $ 86,285 $ 92,452 $ 76,604 Non-interest income 14,503 12,376 11,455 • Positive operating leverage of 6.1% Total Revenue(1) 100,788 104,828 88,059 driven by 28.0% increase in PTPP Non-interest expense 53,584 57,891 50,500 Pre-tax pre-provision net income (PTPP)(1) 47,204 46,937 37,559 • Net interest income up $65.3 million, Provision for credit losses 7,235 8,803 5,826 or 24.6%; NIM up 31 bps to 4.31% Provision for income taxes 10,365 9,912 7,366 Net Income $ 29,604 $ 28,222 $ 24,367 • Assets increased by $1.5 billion, through organic growth and Inland acquisition Per Share Diluted EPS $ 0.68 $ 0.65 $ 0.65 4Q23 Income Statement Highlights Dividends declared per common share 0.09 0.09 0.09 • Adjusted net income(1) of $31.8 million, Book value per share 22.62 21.04 20.43 or $0.73 per adjusted diluted share(1) Tangible book value per share(1) 17.98 16.35 16.19 • Record PTPP(1) of $47.2 million Balance Sheet & Credit Quality Total deposits $ 7,176,999 $ 6,953,690 $ 5,695,121 • Adjusted efficiency ratio(1) of 48.64% Total loans and leases 6,702,311 6,620,602 5,469,081 Net charge-offs 12,186 5,430 3,179 4Q23 Balance Sheet Highlights Allowance for credit losses (ACL) 101,686 105,696 81,924 • Deposit growth of $223.3 million, or 12.7%(2) ACL to total loans and leases held for investment 1.52% 1.60% 1.51% • Loan growth of $81.7 million, or 4.9%(2) Select Ratios Efficiency ratio(1) 51.63% 53.75% 55.53% • Loan/deposit ratio of 93.39%, down 182 bps Return on average assets (ROAA) 1.34% 1.30% 1.33% Return on average stockholders' equity 12.56% 12.11% 12.92% • Reduced reliance on Brokered CDs and FHLB Return on average tangible common equity(1) 16.68% 16.15% 17.21% advances, down $384.1 million Net Interest Margin (NIM) 4.08% 4.46% 4.39% Common equity to total assets 11.15% 10.29% 10.40% • Common equity to assets of 11.15%; Tangible common equity to tangible assets(1) 9.06% 8.18% 8.42% TCE/TA(1) of 9.06%, up 88 bps Common Equity Tier 1 10.35% 10.08% 10.20% (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, “During 2023, we completed a number of strategic initiatives, including the successful merger and integration of Inland Bancorp, Inc. and delivered sound fourth quarter and strong full-year financial results. We were able to meet the needs of our customers and the markets we serve as total deposits increased $1.5 billion and total loans and leases increased $1.2 billion during the year. This stable balance sheet growth helped us achieve the highest level of revenue in Byline's history. We enter 2024 on solid footing and with great momentum to continue growing the value of our franchise.” Alberto J. Paracchini, President of Byline Bancorp, added, “We are pleased to end the year delivering strong earnings, balanced deposit and loan and lease growth, robust profitability, and disciplined expense management. We remain resolute in serving our customers’ financial needs while diligently focusing on maintaining our asset quality, capital and liquidity positions. I want to thank everyone who works at Byline for their dedication, talent, and contributions to another successful year.” Board Authorizes New Stock Repurchase Program On December 6, 2023, the Company's Board of Directors approved a new stock repurchase program that authorizes the Company to purchase up to 1.25 million shares of the Company's outstanding common stock. The new program is effective January 1, 2024 until December 31, 2024. Under the previous stock repurchase program that expired on December 31, 2023, the Company did not repurchase any shares during 2023. Board Declares Cash Dividend of $0.09 per Share On January 23, 2024, the Company's Board of Directors declared a cash dividend of $0.09 per share, payable on February 20, 2024, to stockholders of record of the Company's common stock as of February 6, 2024. STATEMENTS OF OPERATIONS HIGHLIGHTS Net Interest Income Net interest income for the fourth quarter of 2023 was $86.3 million, a decrease of $6.2 million, or 6.7%, from the third quarter of 2023. The decrease in net interest income was primarily due to an increase of $6.1 million in deposit interest expense due to growth and higher rates, and a decrease of $1.4 million in interest income and fees on loans and leases mainly due to lower accretion income on acquired loans of $5.2 million, offset by growth. Tax-equivalent net interest margin(1) for the fourth quarter of 2023 was 4.09%, a decrease of 38 basis points compared to the third quarter of 2023. Total net loan accretion income impact on the margin contributed 24 basis points to the net interest margin for the current quarter compared to 50 basis points for the prior quarter. The average cost of total deposits was 2.42% for the fourth quarter of 2023, an increase of 29 basis points compared to the third quarter of 2023, as a result of higher rates on money market accounts and time deposits. Average non-interest-bearing demand deposits were 27.5% of average total deposits for the current quarter compared to 28.8% during the prior quarter. Net interest income for the year ended December 31, 2023 was $330.6 million, an increase of $65.3 million, or 24.6%, from the year ended December 31, 2022. The increase in net interest income was primarily due to an increase of $167.6 million in interest income and fees on loans and leases due to growth and accretion income on acquired loans; partially offset by an increase of $101.6 million in deposit interest expense due to higher rates paid and growth. Tax-equivalent net interest margin(1) for the year ended December 31, 2023 was 4.32%, an increase of 31 basis points compared to year ended December 31, 2022. Total net loan accretion income impact on the margin contributed 22 basis points to the net interest margin for the current year compared to seven basis points for the prior year. The average cost of total deposits was 1.90% for the year ended December 31, 2023, an increase of 154 basis points compared to the year ended December 31, 2022, as a result of higher rates on money market accounts and time deposits. Average non-interest-bearing demand deposits were 30.7% of average total deposits for the current year compared to 40.4% during the prior year. Provision for Credit Losses The provision for credit losses was $7.2 million for the fourth quarter of 2023, a decrease of $1.6 million compared to $8.8 million for the third quarter of 2023, mainly attributed to a $2.7 million provision allocated for the acquired non-credit-deteriorated loans resulting from acquisition accounting taken in the prior quarter, partially offset by impairments on non-performing loans. The provision for credit losses for the current quarter is comprised of a provision for loan and lease losses of $8.2 million and a recapture for unfunded commitments of $940,000. The provision for credit losses was $31.7 million for the year ended December 31, 2023, an increase of $7.8 million compared to $23.9 million for the year ended December 31, 2022, mainly attributed to an increase in non-performing loans and acquired non-credit-deteriorated loans. The provision for credit losses for the current year is comprised of a provision for loan and lease losses of $32.2 million and a recapture for unfunded commitments of $567,000. (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. Non-interest Income Non-interest income for the fourth quarter of 2023 was $14.5 million, an increase of $2.1 million, or 17.2%, compared to $12.4 million for the third quarter of 2023. The increase in total non-interest income was primarily due to a $2.4 million decrease in the downward valuation of the loan servicing asset reflecting lower discount rate and improved secondary market conditions, and a $1.2 million gain on the change in fair value of equity securities, partially offset by a decrease of $993,000 in the net gains on sales of loans due to a lower volume of loans sold. During the fourth quarter of 2023, we sold $89.1 million of U.S. government guaranteed loans compared to $101.1 million during the third quarter of 2023. Non-interest income for the year ended December 31, 2023 was $56.3 million, a decrease of $1.0 million, or 1.7%, compared to $57.3 million for the year ended December 31, 2022. The decrease in total non-interest income was primarily due to a decrease in net gains on sales of loans of $9.1 million, partially offset by a $6.7 million decrease in the downward valuation on the loan servicing asset, reflecting a lower discount rate and improved secondary market conditions. During the current year, we sold $348.4 million of U.S. government guaranteed loans compared to $382.2 million during the prior year. Non-interest Expense Non-interest expense for the fourth quarter of 2023 was $53.6 million, a decrease of $4.3 million, or 7.4%, from $57.9 million for the third quarter of 2023. The decrease in total non-interest expense was mainly due to a decrease of $3.0 million in salaries and employee benefits, and decreases of $1.5 million in both data processing and legal, audit and other professional, primarily driven by merger-related expenses taken in the third quarter. Our efficiency ratio was 51.63% for the fourth quarter of 2023 compared to 53.75% for the third quarter of 2023, an improvement of 212 basis points. Excluding significant items, our adjusted efficiency ratio(1) for the fourth quarter 2023 was 48.64%, compared to 47.35% for the third quarter of 2023. Non-interest expense for the year ended December 31, 2023 was $209.6 million, an increase of $25.5 million, or 13.9%, from $184.1 million for the year ended December 31, 2022. The increase in total non-interest expense was mainly due to the Inland acquisition. Our efficiency ratio was 52.62% for the year ended December 31, 2023 compared to 54.99% for the year ended December 31, 2022, an improvement of 237 basis points. Excluding significant items, our adjusted efficiency ratio(1) for the current year was 49.61%, compared to 54.70% for the prior year. Income Taxes We recorded income tax expense of $10.4 million during the fourth quarter of 2023, compared to $9.9 million during the third quarter of 2023. The effective tax rate was 25.9% and 26.0% for the fourth quarter of 2023 and third quarter of 2023, respectively. We recorded income tax expense of $37.8 million during the year ended December 31, 2023, compared to $26.7 million during the year ended December 31, 2022. The effective tax rate was 25.9% and 23.3% for the current year and prior year, respectively. (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 $8.9 billion as of December 31, 2023, a decrease of $61.4 million, or 0.7%, compared to $8.9 billion at September 30, 2023 and an increase of $1.5 billion from $7.4 billion at December 31, 2022. The current quarter decrease was primarily due to a decrease in cash and cash equivalents of $202.8 million due to cash management strategies, offset by an increase in net loans and leases of $75.0 million mainly due to the increases in commercial banking and lease financings, and an increase in securities available-for-sale of $102.6 million, driven by an increase in fair values. The increase from the prior year is primarily due to the Inland acquisition and organic loan and lease growth. Non-performing loans and leases were $64.1 million at December 31, 2023, an increase of $12.0 million from $52.1 million at September 30, 2023, and $28.0 million from $36.0 million at December 31, 2022. The increases were primarily the result of increases to purchased credit deteriorated loans and increases in non-performing commercial real estate loans and commercial and industrial loans. Allowance for Credit Losses ("ACL") - Loans and Leases The ACL was $101.7 million as of December 31, 2023, a decrease of $4.0 million, or 3.8%, from $105.7 million at September 30, 2023, mainly due to net charge-offs. The ACL increase of $19.8 million from $81.9 million as of December 31, 2022 is mainly due to loan growth, adjustment for acquired purchase credit deteriorated loans, and an increase in non-performing loans. Net charge-offs of loans and leases during the fourth quarter of 2023 were $12.2 million, or 0.73% of average loans and leases, on an annualized basis. This was an increase of $6.8 million compared to net charge-offs of $5.4 million, or 0.33% of average loans and leases, during the third quarter of 2023. Increases in the current quarter are primarily due to the resolution of impaired commercial and industrial loans and commercial real estate loans. Net charge-offs of loans and leases during the year ended December 31, 2023 were $23.1 million, or 0.38% of average loans and leases. This was an increase of $15.1 million compared to net charge-offs of $7.9 million, or 0.16% of average loans and leases, during the year ended December 31, 2022. Increases for the full year were mainly driven by resolutions on purchased credit deteriorated loans and commercial real estate loans. Deposits and Other Liabilities Total deposits increased $223.3 million to $7.2 billion at December 31, 2023 compared to $7.0 billion at September 30, 2023 and $5.7 billion as of December 31, 2022. The increase in deposits in the current quarter was mainly due to organic growth. Time deposit growth of $127.2 million was principally due to increased personal time deposits. Money market growth of $203.8 million was due to increases in consumer and commercial deposits. Non-interest-bearing demand deposits decreased $54.0 million primarily due to lower consumer deposits. Increases for the full year were primarily driven by the Inland acquisition and organic deposit growth, and were impacted by shifting deposit mix due to the rising interest rate environment. Total borrowings and other liabilities were $714.8 million at December 31, 2023, a decrease of $354.8 million from $1.1 billion at September 30, 2023, and a decrease of $187.0 million from $902.0 million at December 31, 2022. These decreases were primarily driven by lower Federal Home Loan Bank advances. Stockholders’ Equity Total stockholders’ equity was $990.2 million at December 31, 2023, increase of $70.2 million from $919.9 million at September 30, 2023, and an increase of $224.5 million from December 31, 2022. The quarterly increase was primarily due to increases in other comprehensive income and retained earnings as a result of net income. The full year increase was primarily due to merger consideration and retained earnings as a result of 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, January 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 183253. A recorded replay can be accessed through February 9, 2024, by dialing (866) 813-9403; passcode: 953063. A slide presentation relating to our fourth quarter 2023 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 $8.9 billion in assets and operates 48 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, 2022. Any forward-looking statement speaks only as of the date on which it is made, and Byline undertakes no obligation to update any forward-looking statement, whether to reflect events or circumstances after the date on which the statement is made, to reflect new information or the occurrence of unanticipated events, or otherwise unless required under the federal securities laws. BYLINE BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited) December 31, September 30, December 31, (dollars in thousands) 2023 2023 2022 ASSETS Cash and due from banks $ 60,431 $ 71,248 $ 62,274 Interest bearing deposits with other banks 165,705 357,640 117,079 Cash and cash equivalents 226,136 428,888 179,353 Equity and other securities, at fair value 8,743 7,902 7,989 Securities available-for-sale, at fair value 1,342,480 1,239,929 1,174,431 Securities held-to-maturity, at amortized cost 1,157 1,157 2,705 Restricted stock, at cost 16,304 30,505 28,202 Loans held for sale 18,005 7,299 47,823 Loans and leases: Loans and leases 6,684,306 6,613,303 5,421,258 Allowance for credit losses - loans and leases (101,686 ) (105,696 ) (81,924 ) Net loans and leases 6,582,620 6,507,607 5,339,334 Servicing assets, at fair value 19,844 19,743 19,172 Premises and equipment, net 66,627 67,121 56,798 Other real estate owned, net 1,200 1,671 4,717 Goodwill and other intangible assets, net 203,478 205,028 158,887 Bank-owned life insurance 96,900 96,268 82,093 Deferred tax assets, net 50,058 89,841 68,213 Accrued interest receivable and other assets 248,415 240,409 193,224 Total assets $ 8,881,967 $ 8,943,368 $ 7,362,941 LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES Non-interest-bearing demand deposits $ 1,905,876 $ 1,959,855 $ 2,138,645 Interest-bearing deposits 5,271,123 4,993,835 3,556,476 Total deposits 7,176,999 6,953,690 5,695,121 Other borrowings 395,190 713,233 640,399 Subordinated notes, net 73,866 73,822 73,691 Junior subordinated debentures issued to capital trusts, net 70,452 70,336 37,338 Accrued expenses and other liabilities 175,309 212,342 150,576 Total liabilities 7,891,816 8,023,423 6,597,125 STOCKHOLDERS’ EQUITY Common stock 451 450 389 Additional paid-in capital 710,488 708,615 598,297 Retained earnings 429,036 403,368 335,794 Treasury stock (49,707 ) (50,329 ) (51,114 ) Accumulated other comprehensive loss, net of tax (100,117 ) (142,159 ) (117,550 ) Total stockholders’ equity 990,151 919,945 765,816 Total liabilities and stockholders’ equity $ 8,881,967 $ 8,943,368 $ 7,362,941 BYLINE BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three Months Ended Year Ended (dollars in thousands, December 31, September 30, December 31, December 31, December 31, except per share data) 2023 2023 2022 2023 2022 INTEREST AND DIVIDEND INCOME Interest and fees on loans and leases $ 124,042 $ 125,465 $ 85,720 $ 440,984 $ 273,412 Interest on securities 9,227 8,415 6,569 30,801 25,390 Other interest and dividend income 2,345 2,710 1,515 7,693 2,757 Total interest and dividend income 135,614 136,590 93,804 479,478 301,559 INTEREST EXPENSE Deposits 43,252 37,163 10,610 121,436 19,796 Other borrowings 3,051 3,981 4,598 17,161 9,322 Subordinated notes and debentures 3,026 2,994 1,992 10,260 7,111 Total interest expense 49,329 44,138 17,200 148,857 36,229 Net interest income 86,285 92,452 76,604 330,621 265,330 PROVISION FOR CREDIT LOSSES 7,235 8,803 5,826 31,653 23,879 Net interest income after provision for credit losses 79,050 83,649 70,778 298,968 241,451 NON-INTEREST INCOME Fees and service charges on deposits 2,486 2,372 2,081 9,211 8,152 Loan servicing revenue 3,377 3,369 3,293 13,503 13,479 Loan servicing asset revaluation (1,234 ) (3,646 ) (3,534 ) (5,089 ) (11,743 ) ATM and interchange fees 1,082 1,205 1,250 4,462 4,437 Net realized gains on securities available-for-sale — — — — 50 Change in fair value of equity securities, net 841 (313 ) 710 1,071 (603 ) Net gains on sales of loans 5,480 6,473 5,509 22,805 31,899 Wealth management and trust income 1,256 939 864 4,158 3,807 Other non-interest income 1,215 1,977 1,282 6,194 7,836 Total non-interest income 14,503 12,376 11,455 56,315 57,314 NON-INTEREST EXPENSE Salaries and employee benefits 31,974 34,969 31,808 126,979 118,051 Occupancy and equipment expense, net 4,346 5,314 3,532 18,508 16,988 Impairment charge on assets held for sale 1,980 — 372 2,000 372 Loan and lease related expenses 649 836 1,126 2,936 1,707 Legal, audit, and other professional fees 2,352 3,805 3,204 12,946 10,357 Data processing 4,982 6,472 3,406 19,509 13,358 Net loss recognized on other real estate owned and other related expenses 89 111 221 385 708 Other intangible assets amortization expense 1,550 1,551 1,596 6,011 6,671 Other non-interest expense 5,662 4,833 5,235 20,329 15,870 Total non-interest expense 53,584 57,891 50,500 209,603 184,082 INCOME BEFORE PROVISION FOR INCOME TAXES 39,969 38,134 31,733 145,680 114,683 PROVISION FOR INCOME TAXES 10,365 9,912 7,366 37,802 26,729 NET INCOME $ 29,604 $ 28,222 $ 24,367 $ 107,878 $ 87,954 Dividends on preferred shares — — — — 196 INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 29,604 $ 28,222 $ 24,367 $ 107,878 $ 87,758 EARNINGS PER COMMON SHARE Basic $ 0.69 $ 0.66 $ 0.66 $ 2.69 $ 2.37 Diluted $ 0.68 $ 0.65 $ 0.65 $ 2.67 $ 2.34 BYLINE BANCORP, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (unaudited) As of or For the Three Months Ended As of or For the Year Ended (dollars in thousands, except share December 31, September 30, December 31, December 31, December 31, and per share data) 2023 2023 2022 2023 2022 Earnings per Common Share Basic earnings per common share $ 0.69 $ 0.66 $ 0.66 $ 2.69 $ 2.37 Diluted earnings per common share $ 0.68 $ 0.65 $ 0.65 $ 2.67 $ 2.34 Adjusted diluted earnings per common share(1)(3) $ 0.73 $ 0.77 $ 0.67 $ 2.89 $ 2.36 Weighted average common shares outstanding (basic) 43,065,294 43,025,927 36,856,221 40,045,208 36,972,972 Weighted average common shares outstanding (diluted) 43,537,778 43,458,110 37,360,113 40,445,553 37,476,120 Common shares outstanding 43,764,056 43,719,203 37,492,775 43,764,056 37,492,775 Cash dividends per common share $ 0.09 $ 0.09 $ 0.09 $ 0.36 $ 0.36 Dividend payout ratio on common stock 13.24 % 13.85 % 13.85 % 13.48 % 15.38 % Book value per common share $ 22.62 $ 21.04 $ 20.43 $ 22.62 $ 20.43 Tangible book value per common share(1) $ 17.98 $ 16.35 $ 16.19 $ 17.98 $ 16.19 Key Ratios and Performance Metrics (annualized where applicable) Net interest margin 4.08 % 4.46 % 4.39 % 4.31 % 4.00 % Net interest margin, fully taxable equivalent (1)(4) 4.09 % 4.47 % 4.40 % 4.32 % 4.01 % Average cost of deposits 2.42 % 2.13 % 0.73 % 1.90 % 0.36 % Efficiency ratio(1)(2) 51.63 % 53.75 % 55.53 % 52.62 % 54.99 % Adjusted efficiency ratio(1)(2)(3) 48.64 % 47.35 % 54.50 % 49.61 % 54.70 % Non-interest income to total revenues(1) 14.39 % 11.81 % 13.01 % 14.55 % 17.76 % Non-interest expense to average assets 2.42 % 2.66 % 2.76 % 2.60 % 2.62 % Adjusted non-interest expense to average assets(1)(3) 2.28 % 2.35 % 2.71 % 2.46 % 2.61 % Return on average stockholders' equity 12.56 % 12.11 % 12.92 % 12.50 % 11.33 % Adjusted return on average stockholders' equity(1)(3) 13.50 % 14.30 % 13.34 % 13.53 % 11.43 % Return on average assets 1.34 % 1.30 % 1.33 % 1.34 % 1.25 % Adjusted return on average assets(1)(3) 1.44 % 1.53 % 1.37 % 1.45 % 1.26 % Pre-tax pre-provision return on average assets(1) 2.13 % 2.16 % 2.05 % 2.20 % 1.97 % Adjusted pre-tax pre-provision return on average assets(1)(3) 2.27 % 2.46 % 2.10 % 2.35 % 1.99 % Return on average tangible common stockholders' equity(1) 16.68 % 16.15 % 17.21 % 16.46 % 15.15 % Adjusted return on average tangible common stockholders' equity(1)(3) 17.89 % 18.95 % 17.75 % 17.76 % 15.28 % Non-interest-bearing deposits to total deposits 26.56 % 28.18 % 37.55 % 26.56 % 37.55 % Loans and leases held for sale and loans and lease held for investment to total deposits 93.39 % 95.21 % 96.03 % 93.39 % 96.03 % Deposits to total liabilities 90.94 % 86.67 % 86.33 % 90.94 % 86.33 % Deposits per branch $ 149,521 $ 144,869 $ 149,872 $ 149,521 $ 149,872 Asset Quality Ratios Non-performing loans and leases to total loans and leases held for investment, net before ACL 0.96 % 0.79 % 0.66 % 0.96 % 0.66 % ACL to total loans and leases held for investment, net before ACL 1.52 % 1.60 % 1.51 % 1.52 % 1.51 % Net charge-offs to average total loans and leases held for investment, net before ACL - loans and leases 0.73 % 0.33 % 0.24 % 0.38 % 0.16 % Capital Ratios Common equity to total assets 11.15 % 10.29 % 10.40 % 11.15 % 10.40 % Tangible common equity to tangible assets(1) 9.06 % 8.18 % 8.42 % 9.06 % 8.42 % Leverage ratio 10.86 % 10.75 % 10.29 % 10.86 % 10.29 % Common equity tier 1 capital ratio 10.35 % 10.08 % 10.20 % 10.35 % 10.20 % Tier 1 capital ratio 11.39 % 11.12 % 10.85 % 11.39 % 10.85 % Total capital ratio 13.38 % 13.17 % 13.00 % 13.38 % 13.00 % (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 assets held for sale and 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 December 31, 2023 September 30, 2023 December 31, 2022 (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 $ 201,862 $ 1,822 3.58 % $ 195,019 $ 1,724 3.51 % $ 89,367 $ 234 1.04 % Loans and leases(1) 6,632,827 124,042 7.42 % 6,484,875 125,465 7.68 % 5,389,210 85,720 6.31 % Taxable securities 1,389,580 8,848 2.53 % 1,371,979 8,465 2.45 % 1,288,750 7,043 2.17 % Tax-exempt securities(2) 163,608 1,142 2.77 % 168,805 1,184 2.78 % 155,562 1,021 2.60 % Total interest-earning assets $ 8,387,877 $ 135,854 6.43 % $ 8,220,678 $ 136,838 6.60 % $ 6,922,889 $ 94,018 5.39 % Allowance for credit losses - loans and leases (106,474 ) (108,315 ) (81,815 ) All other assets 506,233 521,982 424,979 TOTAL ASSETS $ 8,787,636 $ 8,634,345 $ 7,266,053 LIABILITIES AND STOCKHOLDERS’ EQUITY Deposits Interest checking $ 570,706 $ 2,335 1.62 % $ 579,917 $ 2,208 1.51 % $ 596,627 $ 1,902 1.27 % Money market accounts 2,159,841 18,730 3.44 % 2,040,476 16,676 3.24 % 1,472,050 5,458 1.47 % Savings 560,372 208 0.15 % 594,555 228 0.15 % 647,536 243 0.15 % Time deposits 1,861,279 21,979 4.68 % 1,706,531 18,051 4.20 % 788,856 3,007 1.51 % Total interest-bearing deposits 5,152,198 43,252 3.33 % 4,921,479 37,163 3.00 % 3,505,069 10,610 1.20 % Other borrowings 395,711 3,051 3.06 % 463,561 3,981 3.41 % 514,518 4,598 3.55 % Subordinated notes and debentures 144,230 3,026 8.32 % 144,171 2,994 8.24 % 110,947 1,992 7.12 % Total borrowings 539,941 6,077 4.47 % 607,732 6,975 4.55 % 625,465 6,590 4.18 % Total interest-bearing liabilities $ 5,692,139 $ 49,329 3.44 % $ 5,529,211 $ 44,138 3.17 % $ 4,130,534 $ 17,200 1.65 % Non-interest-bearing demand deposits 1,950,644 1,987,996 2,235,464 Other liabilities 209,656 192,860 151,763 Total stockholders’ equity 935,197 924,278 748,292 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 8,787,636 $ 8,634,345 $ 7,266,053 Net interest spread(3) 2.99 % 3.43 % 3.74 % Net interest income, fully taxable equivalent $ 86,525 $ 92,700 $ 76,818 Net interest margin, fully taxable equivalent(2)(4) 4.09 % 4.47 % 4.40 % Less: Tax-equivalent adjustment 240 0.01 % 248 0.01 % 214 0.01 % Net interest income $ 86,285 $ 92,452 $ 76,604 Net interest margin(4) 4.08 % 4.46 % 4.39 % Net loan accretion impact on margin $ 5,110 0.24 % $ 10,276 0.50 % $ 369 0.02 % (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 YEAR-TO-DATE STATEMENT OF AVERAGE INTEREST-EARNING ASSETS AND AVERAGE INTEREST-BEARING LIABILITIES (unaudited) For the Year Ended December 31, 2023 December 31, 2022 (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 $ 157,754 $ 5,029 3.19 % $ 76,978 $ 547 0.71 % Loans and leases(1) 6,038,797 440,984 7.30 % 5,073,288 273,412 5.39 % Taxable securities 1,322,379 30,068 2.27 % 1,316,147 24,156 1.84 % Tax-exempt securities(2) 158,918 4,300 2.71 % 164,051 4,359 2.66 % Total interest-earning assets $ 7,677,848 $ 480,381 6.26 % $ 6,630,464 $ 302,474 4.56 % Allowance for credit losses - loans and leases (98,067 ) (74,233 ) All other assets 468,550 462,548 TOTAL ASSETS $ 8,048,331 $ 7,018,779 LIABILITIES AND STOCKHOLDERS’ EQUITY Deposits Interest checking $ 574,335 $ 9,212 1.60 % $ 593,903 $ 3,572 0.60 % Money market accounts 1,802,675 53,933 2.99 % 1,357,371 10,484 0.77 % Savings 585,820 883 0.15 % 658,968 649 0.10 % Time deposits 1,468,836 57,408 3.91 % 691,650 5,091 0.74 % Total interest-bearing deposits 4,431,666 121,436 2.74 % 3,301,892 19,796 0.60 % Other borrowings 484,984 17,125 3.53 % 478,374 9,308 1.95 % Federal funds purchased 685 36 5.30 % 630 14 2.32 % Subordinated notes and debentures 127,825 10,260 8.03 % 110,723 7,111 6.42 % Total borrowings 613,494 27,421 4.47 % 589,727 16,433 2.79 % Total interest-bearing liabilities $ 5,045,160 $ 148,857 2.95 % $ 3,891,619 $ 36,229 0.93 % Non-interest-bearing demand deposits 1,965,663 2,236,615 Other liabilities 174,416 114,320 Total stockholders’ equity 863,092 776,225 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 8,048,331 $ 7,018,779 Net interest spread(3) 3.31 % 3.63 % Net interest income, fully taxable equivalent $ 331,524 $ 266,245 Net interest margin, fully taxable equivalent(2)(4) 4.32 % 4.01 % Less: Tax-equivalent adjustment 903 0.01 % 915 0.01 % Net interest income $ 330,621 $ 265,330 Net interest margin(4) 4.31 % 4.00 % Net loan accretion impact on margin $ 16,726 0.22 % $ 4,555 0.07 % (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: December 31, 2023 September 30, 2023 December 31, 2022 (dollars in thousands) Amount % of Total Amount % of Total Amount % of Total Originated loans and leases: Commercial real estate $ 1,907,029 28.5 % $ 1,837,531 27.8 % $ 1,712,152 31.6 % Residential real estate 465,133 7.0 % 454,456 6.9 % 426,226 7.9 % Construction, land development, and other land 415,162 6.2 % 406,334 6.1 % 438,617 8.1 % Commercial and industrial 2,311,563 34.6 % 2,286,058 34.6 % 2,030,616 37.5 % Installment and other 2,919 0.0 % 2,968 0.0 % 1,410 0.0 % Leasing financing receivables 665,239 10.0 % 641,032 9.7 % 521,689 9.6 % Total originated loans and leases $ 5,767,045 86.3 % $ 5,628,379 85.1 % $ 5,130,710 94.7 % Purchased credit deteriorated loans: Commercial real estate $ 137,807 2.1 % $ 154,573 2.3 % $ 45,143 0.8 % Residential real estate 42,510 0.6 % 47,485 0.7 % 32,228 0.6 % Construction, land development, and other land 25,331 0.4 % 29,587 0.5 % 372 0.0 % Commercial and industrial 19,460 0.3 % 21,014 0.3 % 2,192 0.0 % Installment and other 125 0.0 % 125 0.0 % 140 0.0 % Total purchased credit deteriorated loans $ 225,233 3.4 % $ 252,784 3.8 % $ 80,075 1.4 % Acquired non-credit-deteriorated loans and leases: Commercial real estate $ 275,476 4.1 % $ 296,656 4.5 % $ 152,193 2.8 % Residential real estate 211,887 3.2 % 220,091 3.4 % 31,508 0.6 % Construction, land development, and other land 86,344 1.3 % 87,087 1.3 % — 0.0 % Commercial and industrial 117,538 1.7 % 127,253 1.9 % 24,266 0.5 % Installment and other 156 0.0 % 153 0.0 % 209 0.0 % Leasing financing receivables 627 0.0 % 900 0.0 % 2,297 0.0 % Total acquired non-credit-deteriorated loans and leases $ 692,028 10.3 % $ 732,140 11.1 % $ 210,473 3.9 % Total loans and leases $ 6,684,306 100.0 % $ 6,613,303 100.0 % $ 5,421,258 100.0 % Allowance for credit losses - loans and leases (101,686 ) (105,696 ) (81,924 ) Total loans and leases, net of allowance for credit losses - loans and leases $ 6,582,620 $ 6,507,607 $ 5,339,334 The following table presents the balance and activity within the allowance for credit losses - loans and lease for the periods indicated: Three Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, (dollars in thousands) 2023 2023 2022 2023 2022 ACL - loans and leases, beginning of period $ 105,696 $ 92,665 $ 79,704 $ 81,924 $ 55,012 Adjustment for acquired PCD loans — 10,596 — 10,596 — Adjustment for CECL adoption — — — — 12,168 Provision for credit losses - loans and leases 8,176 7,865 5,399 32,220 22,674 Net charge-offs - loans and leases (12,186 ) (5,430 ) (3,179 ) (23,054 ) (7,930 ) ACL - loans and leases, end of period $ 101,686 $ 105,696 $ 81,924 $ 101,686 $ 81,924 Net charge-offs - loans and leases to average total loans and leases held for investment, net before ACL 0.73 % 0.33 % 0.24 % 0.38 % 0.16 % Provision for credit losses - loans and leases to net charge-offs - loans and leases during the period 0.67 x 1.45 x 1.70 x 1.40 x 2.86 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: December 31, 2023 Change from (dollars in thousands) December 31, 2023 September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 Non-performing assets: Non-accrual loans and leases $ 64,107 $ 52,070 $ 36,027 23.1 % 77.9 % Past due loans and leases 90 days or more and still accruing interest — — — —% —% Total non-performing loans and leases $ 64,107 $ 52,070 $ 36,027 23.1 % 77.9 % Other real estate owned 1,200 1,671 4,717 (28.2 )% (74.6 )% Total non-performing assets $ 65,307 $ 53,741 $ 40,744 21.5 % 60.3 % Total non-performing loans and leases as a percentage of total loans and leases 0.96 % 0.79 % 0.66 % Total non-performing assets as a percentage of total assets 0.74 % 0.60 % 0.55 % Allowance for credit losses - loans and lease as a percentage of non-performing loans and leases 158.62 % 202.99 % 227.40 % Non-performing assets guaranteed by U.S. government: Non-accrual loans guaranteed $ 4,154 $ 3,588 $ 2,225 15.8 % 86.7 % Past due loans 90 days or more and still accruing interest guaranteed — — — —% —% Total non-performing loans guaranteed $ 4,154 $ 3,588 $ 2,225 15.8 % 86.7 % Total non-performing loans and leases not guaranteed as a percentage of total loans and leases 0.90 % 0.73 % 0.62 % Total non-performing assets not guaranteed as a percentage of total assets 0.69 % 0.56 % 0.52 % The following table presents the composition of deposits at the dates indicated: December 31, 2023 Change from (dollars in thousands) December 31, 2023 September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 Non-interest-bearing demand deposits $ 1,905,876 $ 1,959,855 $ 2,138,645 (2.8 )% (10.9 )% Interest-bearing checking accounts 577,609 592,771 592,098 (2.6 )% (2.4 )% Money market demand accounts 2,266,030 2,062,252 1,415,653 9.9 % 60.1 % Other savings 542,532 581,073 625,798 (6.6 )% (13.3 )% Time deposits (below $250,000) 1,520,082 1,446,485 762,250 5.0 % 99.4 % Time deposits ($250,000 and above) 364,870 311,254 160,677 17.4 % 127.1 % Total deposits $ 7,176,999 $ 6,953,690 $ 5,695,121 3.2 % 26.0 % BYLINE BANCORP, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited) Non-GAAP Financial Measures This release contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These measures include adjusted net income, adjusted diluted earnings per share, adjusted efficiency ratio, adjusted non-interest expense to average assets, tax-equivalent net interest margin, total revenue, non-interest income to total revenues, adjusted return on average stockholders’ equity, adjusted return on average assets, pre-tax pre-provision return on average assets, adjusted pre-tax pre-provision return on average assets, tangible book value per common share, tangible common equity to tangible assets, return on average tangible common stockholders' equity, and adjusted return on average tangible common stockholders' equity. Management believes that these non-GAAP financial measures provide useful information to management and investors that is supplementary to the Company’s financial condition, results of operations and cash flows computed in accordance with GAAP; however, management acknowledges that our non-GAAP financial measures have a number of limitations. As such, these disclosures should not be viewed as a substitute for results determined in accordance with GAAP financial measures that we and other companies use. Management also uses these measures for peer comparison. See below in the financial schedules included in this press release for a reconciliation of the non-GAAP financial measures to the comparable GAAP financial measures. Additionally, please refer to the Company’s Annual Report on Form 10-K for the detailed definitions of these non-GAAP financial measures. As of or For the Three Months Ended As of or For the Year Ended December 31, September 30, December 31, December 31, December 31, (dollars in thousands, except per share data) 2023 2023 2022 2023 2022 Net income and earnings per share excluding significant items: Reported Net Income $ 29,604 $ 28,222 $ 24,367 $ 107,878 $ 87,954 Significant items: Impairment charges on assets held for sale and ROU assets 1,981 394 372 2,395 372 Merger-related expenses 1,035 6,307 538 9,222 538 Tax benefit (793 ) (1,617 ) (118 ) (2,696 ) (118 ) Adjusted Net Income $ 31,827 $ 33,306 $ 25,159 $ 116,799 $ 88,746 Reported Diluted Earnings per Share $ 0.68 $ 0.65 $ 0.65 $ 2.67 $ 2.34 Significant items: Impairment charges on assets held for sale and ROU assets 0.05 0.01 0.01 0.06 0.01 Merger-related expenses 0.02 0.15 0.01 0.23 0.01 Tax benefit (0.02 ) (0.04 ) — (0.07 ) — Adjusted Diluted Earnings per Share $ 0.73 $ 0.77 $ 0.67 $ 2.89 $ 2.36 BYLINE BANCORP, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited) As of or For the Three Months Ended As of or For the Year Ended (dollars in thousands, except per share data, December 31, September 30, December 31, December 31, December 31, ratios annualized, where applicable) 2023 2023 2022 2023 2022 Adjusted non-interest expense: Non-interest expense $ 53,584 $ 57,891 $ 50,500 $ 209,603 $ 184,082 Less: Significant items Impairment charges on assets held for sale and ROU assets 1,981 394 372 2,395 372 Merger-related expenses 1,035 6,307 538 9,222 538 Adjusted non-interest expense $ 50,568 $ 51,190 $ 49,590 $ 197,986 $ 183,172 Adjusted non-interest expense excluding amortization of intangible assets: Adjusted non-interest expense $ 50,568 $ 51,190 $ 49,590 $ 197,986 $ 183,172 Less: Amortization of intangible assets 1,550 1,551 1,596 6,011 6,671 Adjusted non-interest expense excluding amortization of intangible assets $ 49,018 $ 49,639 $ 47,994 $ 191,975 $ 176,501 Pre-tax pre-provision net income: Pre-tax income $ 39,969 $ 38,134 $ 31,733 $ 145,680 $ 114,683 Add: Provision for credit losses 7,235 8,803 5,826 31,653 23,879 Pre-tax pre-provision net income $ 47,204 $ 46,937 $ 37,559 $ 177,333 $ 138,562 Adjusted pre-tax pre-provision net income: Pre-tax pre-provision net income $ 47,204 $ 46,937 $ 37,559 $ 177,333 $ 138,562 Add: Impairment charges on assets held for sale and ROU assets 1,981 394 372 2,395 372 Add: Merger-related expenses 1,035 6,307 538 9,222 538 Adjusted pre-tax pre-provision net income $ 50,220 $ 53,638 $ 38,469 $ 188,950 $ 139,472 Tax equivalent net interest income: Net interest income $ 86,285 $ 92,452 $ 76,604 $ 330,621 $ 265,330 Add: Tax-equivalent adjustment 240 248 214 903 915 Net interest income, fully taxable equivalent $ 86,525 $ 92,700 $ 76,818 $ 331,524 $ 266,245 Total revenue: Net interest income $ 86,285 $ 92,452 $ 76,604 $ 330,621 $ 265,330 Add: Non-interest income 14,503 12,376 11,455 56,315 $ 57,314 Total revenue $ 100,788 $ 104,828 $ 88,059 $ 386,936 $ 322,644 Tangible common stockholders' equity: Total stockholders' equity $ 990,151 $ 919,945 $ 765,816 $ 990,151 $ 765,816 Less: Goodwill and other intangibles 203,478 205,028 158,887 203,478 158,887 Tangible common stockholders' equity $ 786,673 $ 714,917 $ 606,929 $ 786,673 $ 606,929 Tangible assets: Total assets $ 8,881,967 $ 8,943,368 $ 7,362,941 $ 8,881,967 $ 7,362,941 Less: Goodwill and other intangibles 203,478 205,028 158,887 203,478 158,887 Tangible assets $ 8,678,489 $ 8,738,340 $ 7,204,054 $ 8,678,489 $ 7,204,054 Average tangible common stockholders' equity: Average total stockholders' equity $ 935,197 $ 924,278 $ 748,292 $ 863,092 $ 776,225 Less: Average preferred stock — — — — 2,459 Less: Average goodwill and other intangibles 204,191 202,978 159,680 180,717 162,203 Average tangible common stockholders' equity $ 731,006 $ 721,300 $ 588,612 $ 682,375 $ 611,563 Average tangible assets: Average total assets $ 8,787,636 $ 8,634,345 $ 7,266,053 $ 8,048,331 $ 7,018,779 Less: Average goodwill and other intangibles 204,191 202,978 159,680 180,717 162,203 Average tangible assets $ 8,583,445 $ 8,431,367 $ 7,106,373 $ 7,867,614 $ 6,856,576 Tangible net income available to common stockholders: Net income available to common stockholders $ 29,604 $ 28,222 $ 24,367 $ 107,878 $ 87,758 Add: After-tax intangible asset amortization 1,138 1,137 1,170 4,408 4,890 Tangible net income available to common stockholders $ 30,742 $ 29,359 $ 25,537 $ 112,286 $ 92,648 Adjusted tangible net income available to common stockholders: Tangible net income available to common stockholders $ 30,742 $ 29,359 $ 25,537 $ 112,286 $ 92,648 Impairment charges on assets held for sale and ROU assets 1,981 394 372 2,395 372 Merger-related expenses 1,035 6,307 538 9,222 538 Tax benefit on significant items (793 ) (1,617 ) (118 ) (2,696 ) (118 ) Adjusted tangible net income available to common stockholders $ 32,965 $ 34,443 $ 26,329 $ 121,207 $ 93,440 BYLINE BANCORP, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited) As of or For the Three Months Ended As of or For the Year Ended (dollars in thousands, except share and per share December 31, September 30, December 31, December 31, December 31, data, ratios annualized, where applicable) 2023 2023 2022 2023 2022 Pre-tax pre-provision return on average assets: Pre-tax pre-provision net income $ 47,204 $ 46,937 $ 37,559 $ 177,333 $ 138,562 Average total assets 8,787,636 8,634,345 7,266,053 8,048,331 7,018,779 Pre-tax pre-provision return on average assets 2.13 % 2.16 % 2.05 % 2.20 % 1.97 % Adjusted pre-tax pre-provision return on average assets: Adjusted pre-tax pre-provision net income $ 50,220 $ 53,638 $ 38,469 $ 188,950 $ 139,472 Average total assets 8,787,636 8,634,345 7,266,053 8,048,331 7,018,779 Adjusted pre-tax pre-provision return on average assets 2.27 % 2.46 % 2.10 % 2.35 % 1.99 % Net interest margin, fully taxable equivalent: Net interest income, fully taxable equivalent $ 86,525 $ 92,700 $ 76,818 $ 331,524 $ 266,245 Total average interest-earning assets 8,387,877 8,220,678 6,922,889 7,677,848 6,630,464 Net interest margin, fully taxable equivalent 4.09 % 4.47 % 4.40 % 4.32 % 4.01 % Non-interest income to total revenues: Non-interest income $ 14,503 $ 12,376 $ 11,455 $ 56,315 $ 57,314 Total revenues 100,788 104,828 88,059 386,936 322,644 Non-interest income to total revenues 14.39 % 11.81 % 13.01 % 14.55 % 17.76 % Adjusted non-interest expense to average assets: Adjusted non-interest expense $ 50,568 $ 51,190 $ 49,590 $ 197,986 $ 183,172 Average total assets 8,787,636 8,634,345 7,266,053 8,048,331 7,018,779 Adjusted non-interest expense to average assets 2.28 % 2.35 % 2.71 % 2.46 % 2.61 % Adjusted efficiency ratio: Adjusted non-interest expense excluding amortization of intangible assets $ 49,018 $ 49,639 $ 47,994 $ 191,975 $ 176,501 Total revenues 100,788 104,828 88,059 386,936 322,644 Adjusted efficiency ratio 48.64 % 47.35 % 54.50 % 49.61 % 54.70 % Adjusted return on average assets: Adjusted net income $ 31,827 $ 33,306 $ 25,159 $ 116,799 $ 88,746 Average total assets 8,787,636 8,634,345 7,266,053 8,048,331 7,018,779 Adjusted return on average assets 1.44 % 1.53 % 1.37 % 1.45 % 1.26 % Adjusted return on average stockholders' equity: Adjusted net income $ 31,827 $ 33,306 $ 25,159 $ 116,799 $ 88,746 Average stockholders' equity 935,197 924,278 748,292 863,092 776,225 Adjusted return on average stockholders' equity 13.50 % 14.30 % 13.34 % 13.53 % 11.43 % Tangible common equity to tangible assets: Tangible common equity $ 786,673 $ 714,917 $ 606,929 $ 786,673 $ 606,929 Tangible assets 8,678,489 8,738,340 7,204,054 8,678,489 7,204,054 Tangible common equity to tangible assets 9.06 % 8.18 % 8.42 % 9.06 % 8.42 % Return on average tangible common stockholders' equity: Tangible net income available to common stockholders $ 30,742 $ 29,359 $ 25,537 $ 112,286 $ 92,648 Average tangible common stockholders' equity 731,006 721,300 588,612 682,375 611,563 Return on average tangible common stockholders' equity 16.68 % 16.15 % 17.21 % 16.46 % 15.15 % Adjusted return on average tangible common stockholders' equity: Adjusted tangible net income available to common stockholders $ 32,965 $ 34,443 $ 26,329 $ 121,207 $ 93,440 Average tangible common stockholders' equity 731,006 721,300 588,612 682,375 611,563 Adjusted return on average tangible common stockholders' equity 17.89 % 18.95 % 17.75 % 17.76 % 15.28 % Tangible book value per share: Tangible common equity $ 786,673 $ 714,917 $ 606,929 $ 786,673 $ 606,929 Common shares outstanding 43,764,056 43,719,203 37,492,775 43,764,056 37,492,775 Tangible book value per share $ 17.98 $ 16.35 $ 16.19 $ 17.98 $ 16.19 View source version on businesswire.com: https://www.businesswire.com/news/home/20240125027265/en/Contacts Investors/Media: Brooks Rennie Investor Relations Director 312-660-5805 brennie@bylinebank.com
Fourth quarter net income of $29.6 million, $0.68 diluted earnings per share; Full year net income of $107.9 million, $2.67 diluted earnings per share
Byline Bancorp, Inc. (NYSE: BY), today reported: For the quarter Full Year Highlights 4Q23 3Q23 4Q22 Financial Results (in thousands) • Net income increased $20.1 million, or 22.9% Net interest income $ 86,285 $ 92,452 $ 76,604 Non-interest income 14,503 12,376 11,455 • Positive operating leverage of 6.1% Total Revenue(1) 100,788 104,828 88,059 driven by 28.0% increase in PTPP Non-interest expense 53,584 57,891 50,500 Pre-tax pre-provision net income (PTPP)(1) 47,204 46,937 37,559 • Net interest income up $65.3 million, Provision for credit losses 7,235 8,803 5,826 or 24.6%; NIM up 31 bps to 4.31% Provision for income taxes 10,365 9,912 7,366 Net Income $ 29,604 $ 28,222 $ 24,367 • Assets increased by $1.5 billion, through organic growth and Inland acquisition Per Share Diluted EPS $ 0.68 $ 0.65 $ 0.65 4Q23 Income Statement Highlights Dividends declared per common share 0.09 0.09 0.09 • Adjusted net income(1) of $31.8 million, Book value per share 22.62 21.04 20.43 or $0.73 per adjusted diluted share(1) Tangible book value per share(1) 17.98 16.35 16.19 • Record PTPP(1) of $47.2 million Balance Sheet & Credit Quality Total deposits $ 7,176,999 $ 6,953,690 $ 5,695,121 • Adjusted efficiency ratio(1) of 48.64% Total loans and leases 6,702,311 6,620,602 5,469,081 Net charge-offs 12,186 5,430 3,179 4Q23 Balance Sheet Highlights Allowance for credit losses (ACL) 101,686 105,696 81,924 • Deposit growth of $223.3 million, or 12.7%(2) ACL to total loans and leases held for investment 1.52% 1.60% 1.51% • Loan growth of $81.7 million, or 4.9%(2) Select Ratios Efficiency ratio(1) 51.63% 53.75% 55.53% • Loan/deposit ratio of 93.39%, down 182 bps Return on average assets (ROAA) 1.34% 1.30% 1.33% Return on average stockholders' equity 12.56% 12.11% 12.92% • Reduced reliance on Brokered CDs and FHLB Return on average tangible common equity(1) 16.68% 16.15% 17.21% advances, down $384.1 million Net Interest Margin (NIM) 4.08% 4.46% 4.39% Common equity to total assets 11.15% 10.29% 10.40% • Common equity to assets of 11.15%; Tangible common equity to tangible assets(1) 9.06% 8.18% 8.42% TCE/TA(1) of 9.06%, up 88 bps Common Equity Tier 1 10.35% 10.08% 10.20% (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, “During 2023, we completed a number of strategic initiatives, including the successful merger and integration of Inland Bancorp, Inc. and delivered sound fourth quarter and strong full-year financial results. We were able to meet the needs of our customers and the markets we serve as total deposits increased $1.5 billion and total loans and leases increased $1.2 billion during the year. This stable balance sheet growth helped us achieve the highest level of revenue in Byline's history. We enter 2024 on solid footing and with great momentum to continue growing the value of our franchise.” Alberto J. Paracchini, President of Byline Bancorp, added, “We are pleased to end the year delivering strong earnings, balanced deposit and loan and lease growth, robust profitability, and disciplined expense management. We remain resolute in serving our customers’ financial needs while diligently focusing on maintaining our asset quality, capital and liquidity positions. I want to thank everyone who works at Byline for their dedication, talent, and contributions to another successful year.” Board Authorizes New Stock Repurchase Program On December 6, 2023, the Company's Board of Directors approved a new stock repurchase program that authorizes the Company to purchase up to 1.25 million shares of the Company's outstanding common stock. The new program is effective January 1, 2024 until December 31, 2024. Under the previous stock repurchase program that expired on December 31, 2023, the Company did not repurchase any shares during 2023. Board Declares Cash Dividend of $0.09 per Share On January 23, 2024, the Company's Board of Directors declared a cash dividend of $0.09 per share, payable on February 20, 2024, to stockholders of record of the Company's common stock as of February 6, 2024. STATEMENTS OF OPERATIONS HIGHLIGHTS Net Interest Income Net interest income for the fourth quarter of 2023 was $86.3 million, a decrease of $6.2 million, or 6.7%, from the third quarter of 2023. The decrease in net interest income was primarily due to an increase of $6.1 million in deposit interest expense due to growth and higher rates, and a decrease of $1.4 million in interest income and fees on loans and leases mainly due to lower accretion income on acquired loans of $5.2 million, offset by growth. Tax-equivalent net interest margin(1) for the fourth quarter of 2023 was 4.09%, a decrease of 38 basis points compared to the third quarter of 2023. Total net loan accretion income impact on the margin contributed 24 basis points to the net interest margin for the current quarter compared to 50 basis points for the prior quarter. The average cost of total deposits was 2.42% for the fourth quarter of 2023, an increase of 29 basis points compared to the third quarter of 2023, as a result of higher rates on money market accounts and time deposits. Average non-interest-bearing demand deposits were 27.5% of average total deposits for the current quarter compared to 28.8% during the prior quarter. Net interest income for the year ended December 31, 2023 was $330.6 million, an increase of $65.3 million, or 24.6%, from the year ended December 31, 2022. The increase in net interest income was primarily due to an increase of $167.6 million in interest income and fees on loans and leases due to growth and accretion income on acquired loans; partially offset by an increase of $101.6 million in deposit interest expense due to higher rates paid and growth. Tax-equivalent net interest margin(1) for the year ended December 31, 2023 was 4.32%, an increase of 31 basis points compared to year ended December 31, 2022. Total net loan accretion income impact on the margin contributed 22 basis points to the net interest margin for the current year compared to seven basis points for the prior year. The average cost of total deposits was 1.90% for the year ended December 31, 2023, an increase of 154 basis points compared to the year ended December 31, 2022, as a result of higher rates on money market accounts and time deposits. Average non-interest-bearing demand deposits were 30.7% of average total deposits for the current year compared to 40.4% during the prior year. Provision for Credit Losses The provision for credit losses was $7.2 million for the fourth quarter of 2023, a decrease of $1.6 million compared to $8.8 million for the third quarter of 2023, mainly attributed to a $2.7 million provision allocated for the acquired non-credit-deteriorated loans resulting from acquisition accounting taken in the prior quarter, partially offset by impairments on non-performing loans. The provision for credit losses for the current quarter is comprised of a provision for loan and lease losses of $8.2 million and a recapture for unfunded commitments of $940,000. The provision for credit losses was $31.7 million for the year ended December 31, 2023, an increase of $7.8 million compared to $23.9 million for the year ended December 31, 2022, mainly attributed to an increase in non-performing loans and acquired non-credit-deteriorated loans. The provision for credit losses for the current year is comprised of a provision for loan and lease losses of $32.2 million and a recapture for unfunded commitments of $567,000. (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. Non-interest Income Non-interest income for the fourth quarter of 2023 was $14.5 million, an increase of $2.1 million, or 17.2%, compared to $12.4 million for the third quarter of 2023. The increase in total non-interest income was primarily due to a $2.4 million decrease in the downward valuation of the loan servicing asset reflecting lower discount rate and improved secondary market conditions, and a $1.2 million gain on the change in fair value of equity securities, partially offset by a decrease of $993,000 in the net gains on sales of loans due to a lower volume of loans sold. During the fourth quarter of 2023, we sold $89.1 million of U.S. government guaranteed loans compared to $101.1 million during the third quarter of 2023. Non-interest income for the year ended December 31, 2023 was $56.3 million, a decrease of $1.0 million, or 1.7%, compared to $57.3 million for the year ended December 31, 2022. The decrease in total non-interest income was primarily due to a decrease in net gains on sales of loans of $9.1 million, partially offset by a $6.7 million decrease in the downward valuation on the loan servicing asset, reflecting a lower discount rate and improved secondary market conditions. During the current year, we sold $348.4 million of U.S. government guaranteed loans compared to $382.2 million during the prior year. Non-interest Expense Non-interest expense for the fourth quarter of 2023 was $53.6 million, a decrease of $4.3 million, or 7.4%, from $57.9 million for the third quarter of 2023. The decrease in total non-interest expense was mainly due to a decrease of $3.0 million in salaries and employee benefits, and decreases of $1.5 million in both data processing and legal, audit and other professional, primarily driven by merger-related expenses taken in the third quarter. Our efficiency ratio was 51.63% for the fourth quarter of 2023 compared to 53.75% for the third quarter of 2023, an improvement of 212 basis points. Excluding significant items, our adjusted efficiency ratio(1) for the fourth quarter 2023 was 48.64%, compared to 47.35% for the third quarter of 2023. Non-interest expense for the year ended December 31, 2023 was $209.6 million, an increase of $25.5 million, or 13.9%, from $184.1 million for the year ended December 31, 2022. The increase in total non-interest expense was mainly due to the Inland acquisition. Our efficiency ratio was 52.62% for the year ended December 31, 2023 compared to 54.99% for the year ended December 31, 2022, an improvement of 237 basis points. Excluding significant items, our adjusted efficiency ratio(1) for the current year was 49.61%, compared to 54.70% for the prior year. Income Taxes We recorded income tax expense of $10.4 million during the fourth quarter of 2023, compared to $9.9 million during the third quarter of 2023. The effective tax rate was 25.9% and 26.0% for the fourth quarter of 2023 and third quarter of 2023, respectively. We recorded income tax expense of $37.8 million during the year ended December 31, 2023, compared to $26.7 million during the year ended December 31, 2022. The effective tax rate was 25.9% and 23.3% for the current year and prior year, respectively. (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 $8.9 billion as of December 31, 2023, a decrease of $61.4 million, or 0.7%, compared to $8.9 billion at September 30, 2023 and an increase of $1.5 billion from $7.4 billion at December 31, 2022. The current quarter decrease was primarily due to a decrease in cash and cash equivalents of $202.8 million due to cash management strategies, offset by an increase in net loans and leases of $75.0 million mainly due to the increases in commercial banking and lease financings, and an increase in securities available-for-sale of $102.6 million, driven by an increase in fair values. The increase from the prior year is primarily due to the Inland acquisition and organic loan and lease growth. Non-performing loans and leases were $64.1 million at December 31, 2023, an increase of $12.0 million from $52.1 million at September 30, 2023, and $28.0 million from $36.0 million at December 31, 2022. The increases were primarily the result of increases to purchased credit deteriorated loans and increases in non-performing commercial real estate loans and commercial and industrial loans. Allowance for Credit Losses ("ACL") - Loans and Leases The ACL was $101.7 million as of December 31, 2023, a decrease of $4.0 million, or 3.8%, from $105.7 million at September 30, 2023, mainly due to net charge-offs. The ACL increase of $19.8 million from $81.9 million as of December 31, 2022 is mainly due to loan growth, adjustment for acquired purchase credit deteriorated loans, and an increase in non-performing loans. Net charge-offs of loans and leases during the fourth quarter of 2023 were $12.2 million, or 0.73% of average loans and leases, on an annualized basis. This was an increase of $6.8 million compared to net charge-offs of $5.4 million, or 0.33% of average loans and leases, during the third quarter of 2023. Increases in the current quarter are primarily due to the resolution of impaired commercial and industrial loans and commercial real estate loans. Net charge-offs of loans and leases during the year ended December 31, 2023 were $23.1 million, or 0.38% of average loans and leases. This was an increase of $15.1 million compared to net charge-offs of $7.9 million, or 0.16% of average loans and leases, during the year ended December 31, 2022. Increases for the full year were mainly driven by resolutions on purchased credit deteriorated loans and commercial real estate loans. Deposits and Other Liabilities Total deposits increased $223.3 million to $7.2 billion at December 31, 2023 compared to $7.0 billion at September 30, 2023 and $5.7 billion as of December 31, 2022. The increase in deposits in the current quarter was mainly due to organic growth. Time deposit growth of $127.2 million was principally due to increased personal time deposits. Money market growth of $203.8 million was due to increases in consumer and commercial deposits. Non-interest-bearing demand deposits decreased $54.0 million primarily due to lower consumer deposits. Increases for the full year were primarily driven by the Inland acquisition and organic deposit growth, and were impacted by shifting deposit mix due to the rising interest rate environment. Total borrowings and other liabilities were $714.8 million at December 31, 2023, a decrease of $354.8 million from $1.1 billion at September 30, 2023, and a decrease of $187.0 million from $902.0 million at December 31, 2022. These decreases were primarily driven by lower Federal Home Loan Bank advances. Stockholders’ Equity Total stockholders’ equity was $990.2 million at December 31, 2023, increase of $70.2 million from $919.9 million at September 30, 2023, and an increase of $224.5 million from December 31, 2022. The quarterly increase was primarily due to increases in other comprehensive income and retained earnings as a result of net income. The full year increase was primarily due to merger consideration and retained earnings as a result of 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, January 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 183253. A recorded replay can be accessed through February 9, 2024, by dialing (866) 813-9403; passcode: 953063. A slide presentation relating to our fourth quarter 2023 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 $8.9 billion in assets and operates 48 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, 2022. Any forward-looking statement speaks only as of the date on which it is made, and Byline undertakes no obligation to update any forward-looking statement, whether to reflect events or circumstances after the date on which the statement is made, to reflect new information or the occurrence of unanticipated events, or otherwise unless required under the federal securities laws. BYLINE BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited) December 31, September 30, December 31, (dollars in thousands) 2023 2023 2022 ASSETS Cash and due from banks $ 60,431 $ 71,248 $ 62,274 Interest bearing deposits with other banks 165,705 357,640 117,079 Cash and cash equivalents 226,136 428,888 179,353 Equity and other securities, at fair value 8,743 7,902 7,989 Securities available-for-sale, at fair value 1,342,480 1,239,929 1,174,431 Securities held-to-maturity, at amortized cost 1,157 1,157 2,705 Restricted stock, at cost 16,304 30,505 28,202 Loans held for sale 18,005 7,299 47,823 Loans and leases: Loans and leases 6,684,306 6,613,303 5,421,258 Allowance for credit losses - loans and leases (101,686 ) (105,696 ) (81,924 ) Net loans and leases 6,582,620 6,507,607 5,339,334 Servicing assets, at fair value 19,844 19,743 19,172 Premises and equipment, net 66,627 67,121 56,798 Other real estate owned, net 1,200 1,671 4,717 Goodwill and other intangible assets, net 203,478 205,028 158,887 Bank-owned life insurance 96,900 96,268 82,093 Deferred tax assets, net 50,058 89,841 68,213 Accrued interest receivable and other assets 248,415 240,409 193,224 Total assets $ 8,881,967 $ 8,943,368 $ 7,362,941 LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES Non-interest-bearing demand deposits $ 1,905,876 $ 1,959,855 $ 2,138,645 Interest-bearing deposits 5,271,123 4,993,835 3,556,476 Total deposits 7,176,999 6,953,690 5,695,121 Other borrowings 395,190 713,233 640,399 Subordinated notes, net 73,866 73,822 73,691 Junior subordinated debentures issued to capital trusts, net 70,452 70,336 37,338 Accrued expenses and other liabilities 175,309 212,342 150,576 Total liabilities 7,891,816 8,023,423 6,597,125 STOCKHOLDERS’ EQUITY Common stock 451 450 389 Additional paid-in capital 710,488 708,615 598,297 Retained earnings 429,036 403,368 335,794 Treasury stock (49,707 ) (50,329 ) (51,114 ) Accumulated other comprehensive loss, net of tax (100,117 ) (142,159 ) (117,550 ) Total stockholders’ equity 990,151 919,945 765,816 Total liabilities and stockholders’ equity $ 8,881,967 $ 8,943,368 $ 7,362,941 BYLINE BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three Months Ended Year Ended (dollars in thousands, December 31, September 30, December 31, December 31, December 31, except per share data) 2023 2023 2022 2023 2022 INTEREST AND DIVIDEND INCOME Interest and fees on loans and leases $ 124,042 $ 125,465 $ 85,720 $ 440,984 $ 273,412 Interest on securities 9,227 8,415 6,569 30,801 25,390 Other interest and dividend income 2,345 2,710 1,515 7,693 2,757 Total interest and dividend income 135,614 136,590 93,804 479,478 301,559 INTEREST EXPENSE Deposits 43,252 37,163 10,610 121,436 19,796 Other borrowings 3,051 3,981 4,598 17,161 9,322 Subordinated notes and debentures 3,026 2,994 1,992 10,260 7,111 Total interest expense 49,329 44,138 17,200 148,857 36,229 Net interest income 86,285 92,452 76,604 330,621 265,330 PROVISION FOR CREDIT LOSSES 7,235 8,803 5,826 31,653 23,879 Net interest income after provision for credit losses 79,050 83,649 70,778 298,968 241,451 NON-INTEREST INCOME Fees and service charges on deposits 2,486 2,372 2,081 9,211 8,152 Loan servicing revenue 3,377 3,369 3,293 13,503 13,479 Loan servicing asset revaluation (1,234 ) (3,646 ) (3,534 ) (5,089 ) (11,743 ) ATM and interchange fees 1,082 1,205 1,250 4,462 4,437 Net realized gains on securities available-for-sale — — — — 50 Change in fair value of equity securities, net 841 (313 ) 710 1,071 (603 ) Net gains on sales of loans 5,480 6,473 5,509 22,805 31,899 Wealth management and trust income 1,256 939 864 4,158 3,807 Other non-interest income 1,215 1,977 1,282 6,194 7,836 Total non-interest income 14,503 12,376 11,455 56,315 57,314 NON-INTEREST EXPENSE Salaries and employee benefits 31,974 34,969 31,808 126,979 118,051 Occupancy and equipment expense, net 4,346 5,314 3,532 18,508 16,988 Impairment charge on assets held for sale 1,980 — 372 2,000 372 Loan and lease related expenses 649 836 1,126 2,936 1,707 Legal, audit, and other professional fees 2,352 3,805 3,204 12,946 10,357 Data processing 4,982 6,472 3,406 19,509 13,358 Net loss recognized on other real estate owned and other related expenses 89 111 221 385 708 Other intangible assets amortization expense 1,550 1,551 1,596 6,011 6,671 Other non-interest expense 5,662 4,833 5,235 20,329 15,870 Total non-interest expense 53,584 57,891 50,500 209,603 184,082 INCOME BEFORE PROVISION FOR INCOME TAXES 39,969 38,134 31,733 145,680 114,683 PROVISION FOR INCOME TAXES 10,365 9,912 7,366 37,802 26,729 NET INCOME $ 29,604 $ 28,222 $ 24,367 $ 107,878 $ 87,954 Dividends on preferred shares — — — — 196 INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 29,604 $ 28,222 $ 24,367 $ 107,878 $ 87,758 EARNINGS PER COMMON SHARE Basic $ 0.69 $ 0.66 $ 0.66 $ 2.69 $ 2.37 Diluted $ 0.68 $ 0.65 $ 0.65 $ 2.67 $ 2.34 BYLINE BANCORP, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (unaudited) As of or For the Three Months Ended As of or For the Year Ended (dollars in thousands, except share December 31, September 30, December 31, December 31, December 31, and per share data) 2023 2023 2022 2023 2022 Earnings per Common Share Basic earnings per common share $ 0.69 $ 0.66 $ 0.66 $ 2.69 $ 2.37 Diluted earnings per common share $ 0.68 $ 0.65 $ 0.65 $ 2.67 $ 2.34 Adjusted diluted earnings per common share(1)(3) $ 0.73 $ 0.77 $ 0.67 $ 2.89 $ 2.36 Weighted average common shares outstanding (basic) 43,065,294 43,025,927 36,856,221 40,045,208 36,972,972 Weighted average common shares outstanding (diluted) 43,537,778 43,458,110 37,360,113 40,445,553 37,476,120 Common shares outstanding 43,764,056 43,719,203 37,492,775 43,764,056 37,492,775 Cash dividends per common share $ 0.09 $ 0.09 $ 0.09 $ 0.36 $ 0.36 Dividend payout ratio on common stock 13.24 % 13.85 % 13.85 % 13.48 % 15.38 % Book value per common share $ 22.62 $ 21.04 $ 20.43 $ 22.62 $ 20.43 Tangible book value per common share(1) $ 17.98 $ 16.35 $ 16.19 $ 17.98 $ 16.19 Key Ratios and Performance Metrics (annualized where applicable) Net interest margin 4.08 % 4.46 % 4.39 % 4.31 % 4.00 % Net interest margin, fully taxable equivalent (1)(4) 4.09 % 4.47 % 4.40 % 4.32 % 4.01 % Average cost of deposits 2.42 % 2.13 % 0.73 % 1.90 % 0.36 % Efficiency ratio(1)(2) 51.63 % 53.75 % 55.53 % 52.62 % 54.99 % Adjusted efficiency ratio(1)(2)(3) 48.64 % 47.35 % 54.50 % 49.61 % 54.70 % Non-interest income to total revenues(1) 14.39 % 11.81 % 13.01 % 14.55 % 17.76 % Non-interest expense to average assets 2.42 % 2.66 % 2.76 % 2.60 % 2.62 % Adjusted non-interest expense to average assets(1)(3) 2.28 % 2.35 % 2.71 % 2.46 % 2.61 % Return on average stockholders' equity 12.56 % 12.11 % 12.92 % 12.50 % 11.33 % Adjusted return on average stockholders' equity(1)(3) 13.50 % 14.30 % 13.34 % 13.53 % 11.43 % Return on average assets 1.34 % 1.30 % 1.33 % 1.34 % 1.25 % Adjusted return on average assets(1)(3) 1.44 % 1.53 % 1.37 % 1.45 % 1.26 % Pre-tax pre-provision return on average assets(1) 2.13 % 2.16 % 2.05 % 2.20 % 1.97 % Adjusted pre-tax pre-provision return on average assets(1)(3) 2.27 % 2.46 % 2.10 % 2.35 % 1.99 % Return on average tangible common stockholders' equity(1) 16.68 % 16.15 % 17.21 % 16.46 % 15.15 % Adjusted return on average tangible common stockholders' equity(1)(3) 17.89 % 18.95 % 17.75 % 17.76 % 15.28 % Non-interest-bearing deposits to total deposits 26.56 % 28.18 % 37.55 % 26.56 % 37.55 % Loans and leases held for sale and loans and lease held for investment to total deposits 93.39 % 95.21 % 96.03 % 93.39 % 96.03 % Deposits to total liabilities 90.94 % 86.67 % 86.33 % 90.94 % 86.33 % Deposits per branch $ 149,521 $ 144,869 $ 149,872 $ 149,521 $ 149,872 Asset Quality Ratios Non-performing loans and leases to total loans and leases held for investment, net before ACL 0.96 % 0.79 % 0.66 % 0.96 % 0.66 % ACL to total loans and leases held for investment, net before ACL 1.52 % 1.60 % 1.51 % 1.52 % 1.51 % Net charge-offs to average total loans and leases held for investment, net before ACL - loans and leases 0.73 % 0.33 % 0.24 % 0.38 % 0.16 % Capital Ratios Common equity to total assets 11.15 % 10.29 % 10.40 % 11.15 % 10.40 % Tangible common equity to tangible assets(1) 9.06 % 8.18 % 8.42 % 9.06 % 8.42 % Leverage ratio 10.86 % 10.75 % 10.29 % 10.86 % 10.29 % Common equity tier 1 capital ratio 10.35 % 10.08 % 10.20 % 10.35 % 10.20 % Tier 1 capital ratio 11.39 % 11.12 % 10.85 % 11.39 % 10.85 % Total capital ratio 13.38 % 13.17 % 13.00 % 13.38 % 13.00 % (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 assets held for sale and 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 December 31, 2023 September 30, 2023 December 31, 2022 (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 $ 201,862 $ 1,822 3.58 % $ 195,019 $ 1,724 3.51 % $ 89,367 $ 234 1.04 % Loans and leases(1) 6,632,827 124,042 7.42 % 6,484,875 125,465 7.68 % 5,389,210 85,720 6.31 % Taxable securities 1,389,580 8,848 2.53 % 1,371,979 8,465 2.45 % 1,288,750 7,043 2.17 % Tax-exempt securities(2) 163,608 1,142 2.77 % 168,805 1,184 2.78 % 155,562 1,021 2.60 % Total interest-earning assets $ 8,387,877 $ 135,854 6.43 % $ 8,220,678 $ 136,838 6.60 % $ 6,922,889 $ 94,018 5.39 % Allowance for credit losses - loans and leases (106,474 ) (108,315 ) (81,815 ) All other assets 506,233 521,982 424,979 TOTAL ASSETS $ 8,787,636 $ 8,634,345 $ 7,266,053 LIABILITIES AND STOCKHOLDERS’ EQUITY Deposits Interest checking $ 570,706 $ 2,335 1.62 % $ 579,917 $ 2,208 1.51 % $ 596,627 $ 1,902 1.27 % Money market accounts 2,159,841 18,730 3.44 % 2,040,476 16,676 3.24 % 1,472,050 5,458 1.47 % Savings 560,372 208 0.15 % 594,555 228 0.15 % 647,536 243 0.15 % Time deposits 1,861,279 21,979 4.68 % 1,706,531 18,051 4.20 % 788,856 3,007 1.51 % Total interest-bearing deposits 5,152,198 43,252 3.33 % 4,921,479 37,163 3.00 % 3,505,069 10,610 1.20 % Other borrowings 395,711 3,051 3.06 % 463,561 3,981 3.41 % 514,518 4,598 3.55 % Subordinated notes and debentures 144,230 3,026 8.32 % 144,171 2,994 8.24 % 110,947 1,992 7.12 % Total borrowings 539,941 6,077 4.47 % 607,732 6,975 4.55 % 625,465 6,590 4.18 % Total interest-bearing liabilities $ 5,692,139 $ 49,329 3.44 % $ 5,529,211 $ 44,138 3.17 % $ 4,130,534 $ 17,200 1.65 % Non-interest-bearing demand deposits 1,950,644 1,987,996 2,235,464 Other liabilities 209,656 192,860 151,763 Total stockholders’ equity 935,197 924,278 748,292 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 8,787,636 $ 8,634,345 $ 7,266,053 Net interest spread(3) 2.99 % 3.43 % 3.74 % Net interest income, fully taxable equivalent $ 86,525 $ 92,700 $ 76,818 Net interest margin, fully taxable equivalent(2)(4) 4.09 % 4.47 % 4.40 % Less: Tax-equivalent adjustment 240 0.01 % 248 0.01 % 214 0.01 % Net interest income $ 86,285 $ 92,452 $ 76,604 Net interest margin(4) 4.08 % 4.46 % 4.39 % Net loan accretion impact on margin $ 5,110 0.24 % $ 10,276 0.50 % $ 369 0.02 % (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 YEAR-TO-DATE STATEMENT OF AVERAGE INTEREST-EARNING ASSETS AND AVERAGE INTEREST-BEARING LIABILITIES (unaudited) For the Year Ended December 31, 2023 December 31, 2022 (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 $ 157,754 $ 5,029 3.19 % $ 76,978 $ 547 0.71 % Loans and leases(1) 6,038,797 440,984 7.30 % 5,073,288 273,412 5.39 % Taxable securities 1,322,379 30,068 2.27 % 1,316,147 24,156 1.84 % Tax-exempt securities(2) 158,918 4,300 2.71 % 164,051 4,359 2.66 % Total interest-earning assets $ 7,677,848 $ 480,381 6.26 % $ 6,630,464 $ 302,474 4.56 % Allowance for credit losses - loans and leases (98,067 ) (74,233 ) All other assets 468,550 462,548 TOTAL ASSETS $ 8,048,331 $ 7,018,779 LIABILITIES AND STOCKHOLDERS’ EQUITY Deposits Interest checking $ 574,335 $ 9,212 1.60 % $ 593,903 $ 3,572 0.60 % Money market accounts 1,802,675 53,933 2.99 % 1,357,371 10,484 0.77 % Savings 585,820 883 0.15 % 658,968 649 0.10 % Time deposits 1,468,836 57,408 3.91 % 691,650 5,091 0.74 % Total interest-bearing deposits 4,431,666 121,436 2.74 % 3,301,892 19,796 0.60 % Other borrowings 484,984 17,125 3.53 % 478,374 9,308 1.95 % Federal funds purchased 685 36 5.30 % 630 14 2.32 % Subordinated notes and debentures 127,825 10,260 8.03 % 110,723 7,111 6.42 % Total borrowings 613,494 27,421 4.47 % 589,727 16,433 2.79 % Total interest-bearing liabilities $ 5,045,160 $ 148,857 2.95 % $ 3,891,619 $ 36,229 0.93 % Non-interest-bearing demand deposits 1,965,663 2,236,615 Other liabilities 174,416 114,320 Total stockholders’ equity 863,092 776,225 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 8,048,331 $ 7,018,779 Net interest spread(3) 3.31 % 3.63 % Net interest income, fully taxable equivalent $ 331,524 $ 266,245 Net interest margin, fully taxable equivalent(2)(4) 4.32 % 4.01 % Less: Tax-equivalent adjustment 903 0.01 % 915 0.01 % Net interest income $ 330,621 $ 265,330 Net interest margin(4) 4.31 % 4.00 % Net loan accretion impact on margin $ 16,726 0.22 % $ 4,555 0.07 % (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: December 31, 2023 September 30, 2023 December 31, 2022 (dollars in thousands) Amount % of Total Amount % of Total Amount % of Total Originated loans and leases: Commercial real estate $ 1,907,029 28.5 % $ 1,837,531 27.8 % $ 1,712,152 31.6 % Residential real estate 465,133 7.0 % 454,456 6.9 % 426,226 7.9 % Construction, land development, and other land 415,162 6.2 % 406,334 6.1 % 438,617 8.1 % Commercial and industrial 2,311,563 34.6 % 2,286,058 34.6 % 2,030,616 37.5 % Installment and other 2,919 0.0 % 2,968 0.0 % 1,410 0.0 % Leasing financing receivables 665,239 10.0 % 641,032 9.7 % 521,689 9.6 % Total originated loans and leases $ 5,767,045 86.3 % $ 5,628,379 85.1 % $ 5,130,710 94.7 % Purchased credit deteriorated loans: Commercial real estate $ 137,807 2.1 % $ 154,573 2.3 % $ 45,143 0.8 % Residential real estate 42,510 0.6 % 47,485 0.7 % 32,228 0.6 % Construction, land development, and other land 25,331 0.4 % 29,587 0.5 % 372 0.0 % Commercial and industrial 19,460 0.3 % 21,014 0.3 % 2,192 0.0 % Installment and other 125 0.0 % 125 0.0 % 140 0.0 % Total purchased credit deteriorated loans $ 225,233 3.4 % $ 252,784 3.8 % $ 80,075 1.4 % Acquired non-credit-deteriorated loans and leases: Commercial real estate $ 275,476 4.1 % $ 296,656 4.5 % $ 152,193 2.8 % Residential real estate 211,887 3.2 % 220,091 3.4 % 31,508 0.6 % Construction, land development, and other land 86,344 1.3 % 87,087 1.3 % — 0.0 % Commercial and industrial 117,538 1.7 % 127,253 1.9 % 24,266 0.5 % Installment and other 156 0.0 % 153 0.0 % 209 0.0 % Leasing financing receivables 627 0.0 % 900 0.0 % 2,297 0.0 % Total acquired non-credit-deteriorated loans and leases $ 692,028 10.3 % $ 732,140 11.1 % $ 210,473 3.9 % Total loans and leases $ 6,684,306 100.0 % $ 6,613,303 100.0 % $ 5,421,258 100.0 % Allowance for credit losses - loans and leases (101,686 ) (105,696 ) (81,924 ) Total loans and leases, net of allowance for credit losses - loans and leases $ 6,582,620 $ 6,507,607 $ 5,339,334 The following table presents the balance and activity within the allowance for credit losses - loans and lease for the periods indicated: Three Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, (dollars in thousands) 2023 2023 2022 2023 2022 ACL - loans and leases, beginning of period $ 105,696 $ 92,665 $ 79,704 $ 81,924 $ 55,012 Adjustment for acquired PCD loans — 10,596 — 10,596 — Adjustment for CECL adoption — — — — 12,168 Provision for credit losses - loans and leases 8,176 7,865 5,399 32,220 22,674 Net charge-offs - loans and leases (12,186 ) (5,430 ) (3,179 ) (23,054 ) (7,930 ) ACL - loans and leases, end of period $ 101,686 $ 105,696 $ 81,924 $ 101,686 $ 81,924 Net charge-offs - loans and leases to average total loans and leases held for investment, net before ACL 0.73 % 0.33 % 0.24 % 0.38 % 0.16 % Provision for credit losses - loans and leases to net charge-offs - loans and leases during the period 0.67 x 1.45 x 1.70 x 1.40 x 2.86 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: December 31, 2023 Change from (dollars in thousands) December 31, 2023 September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 Non-performing assets: Non-accrual loans and leases $ 64,107 $ 52,070 $ 36,027 23.1 % 77.9 % Past due loans and leases 90 days or more and still accruing interest — — — —% —% Total non-performing loans and leases $ 64,107 $ 52,070 $ 36,027 23.1 % 77.9 % Other real estate owned 1,200 1,671 4,717 (28.2 )% (74.6 )% Total non-performing assets $ 65,307 $ 53,741 $ 40,744 21.5 % 60.3 % Total non-performing loans and leases as a percentage of total loans and leases 0.96 % 0.79 % 0.66 % Total non-performing assets as a percentage of total assets 0.74 % 0.60 % 0.55 % Allowance for credit losses - loans and lease as a percentage of non-performing loans and leases 158.62 % 202.99 % 227.40 % Non-performing assets guaranteed by U.S. government: Non-accrual loans guaranteed $ 4,154 $ 3,588 $ 2,225 15.8 % 86.7 % Past due loans 90 days or more and still accruing interest guaranteed — — — —% —% Total non-performing loans guaranteed $ 4,154 $ 3,588 $ 2,225 15.8 % 86.7 % Total non-performing loans and leases not guaranteed as a percentage of total loans and leases 0.90 % 0.73 % 0.62 % Total non-performing assets not guaranteed as a percentage of total assets 0.69 % 0.56 % 0.52 % The following table presents the composition of deposits at the dates indicated: December 31, 2023 Change from (dollars in thousands) December 31, 2023 September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 Non-interest-bearing demand deposits $ 1,905,876 $ 1,959,855 $ 2,138,645 (2.8 )% (10.9 )% Interest-bearing checking accounts 577,609 592,771 592,098 (2.6 )% (2.4 )% Money market demand accounts 2,266,030 2,062,252 1,415,653 9.9 % 60.1 % Other savings 542,532 581,073 625,798 (6.6 )% (13.3 )% Time deposits (below $250,000) 1,520,082 1,446,485 762,250 5.0 % 99.4 % Time deposits ($250,000 and above) 364,870 311,254 160,677 17.4 % 127.1 % Total deposits $ 7,176,999 $ 6,953,690 $ 5,695,121 3.2 % 26.0 % BYLINE BANCORP, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited) Non-GAAP Financial Measures This release contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These measures include adjusted net income, adjusted diluted earnings per share, adjusted efficiency ratio, adjusted non-interest expense to average assets, tax-equivalent net interest margin, total revenue, non-interest income to total revenues, adjusted return on average stockholders’ equity, adjusted return on average assets, pre-tax pre-provision return on average assets, adjusted pre-tax pre-provision return on average assets, tangible book value per common share, tangible common equity to tangible assets, return on average tangible common stockholders' equity, and adjusted return on average tangible common stockholders' equity. Management believes that these non-GAAP financial measures provide useful information to management and investors that is supplementary to the Company’s financial condition, results of operations and cash flows computed in accordance with GAAP; however, management acknowledges that our non-GAAP financial measures have a number of limitations. As such, these disclosures should not be viewed as a substitute for results determined in accordance with GAAP financial measures that we and other companies use. Management also uses these measures for peer comparison. See below in the financial schedules included in this press release for a reconciliation of the non-GAAP financial measures to the comparable GAAP financial measures. Additionally, please refer to the Company’s Annual Report on Form 10-K for the detailed definitions of these non-GAAP financial measures. As of or For the Three Months Ended As of or For the Year Ended December 31, September 30, December 31, December 31, December 31, (dollars in thousands, except per share data) 2023 2023 2022 2023 2022 Net income and earnings per share excluding significant items: Reported Net Income $ 29,604 $ 28,222 $ 24,367 $ 107,878 $ 87,954 Significant items: Impairment charges on assets held for sale and ROU assets 1,981 394 372 2,395 372 Merger-related expenses 1,035 6,307 538 9,222 538 Tax benefit (793 ) (1,617 ) (118 ) (2,696 ) (118 ) Adjusted Net Income $ 31,827 $ 33,306 $ 25,159 $ 116,799 $ 88,746 Reported Diluted Earnings per Share $ 0.68 $ 0.65 $ 0.65 $ 2.67 $ 2.34 Significant items: Impairment charges on assets held for sale and ROU assets 0.05 0.01 0.01 0.06 0.01 Merger-related expenses 0.02 0.15 0.01 0.23 0.01 Tax benefit (0.02 ) (0.04 ) — (0.07 ) — Adjusted Diluted Earnings per Share $ 0.73 $ 0.77 $ 0.67 $ 2.89 $ 2.36 BYLINE BANCORP, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited) As of or For the Three Months Ended As of or For the Year Ended (dollars in thousands, except per share data, December 31, September 30, December 31, December 31, December 31, ratios annualized, where applicable) 2023 2023 2022 2023 2022 Adjusted non-interest expense: Non-interest expense $ 53,584 $ 57,891 $ 50,500 $ 209,603 $ 184,082 Less: Significant items Impairment charges on assets held for sale and ROU assets 1,981 394 372 2,395 372 Merger-related expenses 1,035 6,307 538 9,222 538 Adjusted non-interest expense $ 50,568 $ 51,190 $ 49,590 $ 197,986 $ 183,172 Adjusted non-interest expense excluding amortization of intangible assets: Adjusted non-interest expense $ 50,568 $ 51,190 $ 49,590 $ 197,986 $ 183,172 Less: Amortization of intangible assets 1,550 1,551 1,596 6,011 6,671 Adjusted non-interest expense excluding amortization of intangible assets $ 49,018 $ 49,639 $ 47,994 $ 191,975 $ 176,501 Pre-tax pre-provision net income: Pre-tax income $ 39,969 $ 38,134 $ 31,733 $ 145,680 $ 114,683 Add: Provision for credit losses 7,235 8,803 5,826 31,653 23,879 Pre-tax pre-provision net income $ 47,204 $ 46,937 $ 37,559 $ 177,333 $ 138,562 Adjusted pre-tax pre-provision net income: Pre-tax pre-provision net income $ 47,204 $ 46,937 $ 37,559 $ 177,333 $ 138,562 Add: Impairment charges on assets held for sale and ROU assets 1,981 394 372 2,395 372 Add: Merger-related expenses 1,035 6,307 538 9,222 538 Adjusted pre-tax pre-provision net income $ 50,220 $ 53,638 $ 38,469 $ 188,950 $ 139,472 Tax equivalent net interest income: Net interest income $ 86,285 $ 92,452 $ 76,604 $ 330,621 $ 265,330 Add: Tax-equivalent adjustment 240 248 214 903 915 Net interest income, fully taxable equivalent $ 86,525 $ 92,700 $ 76,818 $ 331,524 $ 266,245 Total revenue: Net interest income $ 86,285 $ 92,452 $ 76,604 $ 330,621 $ 265,330 Add: Non-interest income 14,503 12,376 11,455 56,315 $ 57,314 Total revenue $ 100,788 $ 104,828 $ 88,059 $ 386,936 $ 322,644 Tangible common stockholders' equity: Total stockholders' equity $ 990,151 $ 919,945 $ 765,816 $ 990,151 $ 765,816 Less: Goodwill and other intangibles 203,478 205,028 158,887 203,478 158,887 Tangible common stockholders' equity $ 786,673 $ 714,917 $ 606,929 $ 786,673 $ 606,929 Tangible assets: Total assets $ 8,881,967 $ 8,943,368 $ 7,362,941 $ 8,881,967 $ 7,362,941 Less: Goodwill and other intangibles 203,478 205,028 158,887 203,478 158,887 Tangible assets $ 8,678,489 $ 8,738,340 $ 7,204,054 $ 8,678,489 $ 7,204,054 Average tangible common stockholders' equity: Average total stockholders' equity $ 935,197 $ 924,278 $ 748,292 $ 863,092 $ 776,225 Less: Average preferred stock — — — — 2,459 Less: Average goodwill and other intangibles 204,191 202,978 159,680 180,717 162,203 Average tangible common stockholders' equity $ 731,006 $ 721,300 $ 588,612 $ 682,375 $ 611,563 Average tangible assets: Average total assets $ 8,787,636 $ 8,634,345 $ 7,266,053 $ 8,048,331 $ 7,018,779 Less: Average goodwill and other intangibles 204,191 202,978 159,680 180,717 162,203 Average tangible assets $ 8,583,445 $ 8,431,367 $ 7,106,373 $ 7,867,614 $ 6,856,576 Tangible net income available to common stockholders: Net income available to common stockholders $ 29,604 $ 28,222 $ 24,367 $ 107,878 $ 87,758 Add: After-tax intangible asset amortization 1,138 1,137 1,170 4,408 4,890 Tangible net income available to common stockholders $ 30,742 $ 29,359 $ 25,537 $ 112,286 $ 92,648 Adjusted tangible net income available to common stockholders: Tangible net income available to common stockholders $ 30,742 $ 29,359 $ 25,537 $ 112,286 $ 92,648 Impairment charges on assets held for sale and ROU assets 1,981 394 372 2,395 372 Merger-related expenses 1,035 6,307 538 9,222 538 Tax benefit on significant items (793 ) (1,617 ) (118 ) (2,696 ) (118 ) Adjusted tangible net income available to common stockholders $ 32,965 $ 34,443 $ 26,329 $ 121,207 $ 93,440 BYLINE BANCORP, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited) As of or For the Three Months Ended As of or For the Year Ended (dollars in thousands, except share and per share December 31, September 30, December 31, December 31, December 31, data, ratios annualized, where applicable) 2023 2023 2022 2023 2022 Pre-tax pre-provision return on average assets: Pre-tax pre-provision net income $ 47,204 $ 46,937 $ 37,559 $ 177,333 $ 138,562 Average total assets 8,787,636 8,634,345 7,266,053 8,048,331 7,018,779 Pre-tax pre-provision return on average assets 2.13 % 2.16 % 2.05 % 2.20 % 1.97 % Adjusted pre-tax pre-provision return on average assets: Adjusted pre-tax pre-provision net income $ 50,220 $ 53,638 $ 38,469 $ 188,950 $ 139,472 Average total assets 8,787,636 8,634,345 7,266,053 8,048,331 7,018,779 Adjusted pre-tax pre-provision return on average assets 2.27 % 2.46 % 2.10 % 2.35 % 1.99 % Net interest margin, fully taxable equivalent: Net interest income, fully taxable equivalent $ 86,525 $ 92,700 $ 76,818 $ 331,524 $ 266,245 Total average interest-earning assets 8,387,877 8,220,678 6,922,889 7,677,848 6,630,464 Net interest margin, fully taxable equivalent 4.09 % 4.47 % 4.40 % 4.32 % 4.01 % Non-interest income to total revenues: Non-interest income $ 14,503 $ 12,376 $ 11,455 $ 56,315 $ 57,314 Total revenues 100,788 104,828 88,059 386,936 322,644 Non-interest income to total revenues 14.39 % 11.81 % 13.01 % 14.55 % 17.76 % Adjusted non-interest expense to average assets: Adjusted non-interest expense $ 50,568 $ 51,190 $ 49,590 $ 197,986 $ 183,172 Average total assets 8,787,636 8,634,345 7,266,053 8,048,331 7,018,779 Adjusted non-interest expense to average assets 2.28 % 2.35 % 2.71 % 2.46 % 2.61 % Adjusted efficiency ratio: Adjusted non-interest expense excluding amortization of intangible assets $ 49,018 $ 49,639 $ 47,994 $ 191,975 $ 176,501 Total revenues 100,788 104,828 88,059 386,936 322,644 Adjusted efficiency ratio 48.64 % 47.35 % 54.50 % 49.61 % 54.70 % Adjusted return on average assets: Adjusted net income $ 31,827 $ 33,306 $ 25,159 $ 116,799 $ 88,746 Average total assets 8,787,636 8,634,345 7,266,053 8,048,331 7,018,779 Adjusted return on average assets 1.44 % 1.53 % 1.37 % 1.45 % 1.26 % Adjusted return on average stockholders' equity: Adjusted net income $ 31,827 $ 33,306 $ 25,159 $ 116,799 $ 88,746 Average stockholders' equity 935,197 924,278 748,292 863,092 776,225 Adjusted return on average stockholders' equity 13.50 % 14.30 % 13.34 % 13.53 % 11.43 % Tangible common equity to tangible assets: Tangible common equity $ 786,673 $ 714,917 $ 606,929 $ 786,673 $ 606,929 Tangible assets 8,678,489 8,738,340 7,204,054 8,678,489 7,204,054 Tangible common equity to tangible assets 9.06 % 8.18 % 8.42 % 9.06 % 8.42 % Return on average tangible common stockholders' equity: Tangible net income available to common stockholders $ 30,742 $ 29,359 $ 25,537 $ 112,286 $ 92,648 Average tangible common stockholders' equity 731,006 721,300 588,612 682,375 611,563 Return on average tangible common stockholders' equity 16.68 % 16.15 % 17.21 % 16.46 % 15.15 % Adjusted return on average tangible common stockholders' equity: Adjusted tangible net income available to common stockholders $ 32,965 $ 34,443 $ 26,329 $ 121,207 $ 93,440 Average tangible common stockholders' equity 731,006 721,300 588,612 682,375 611,563 Adjusted return on average tangible common stockholders' equity 17.89 % 18.95 % 17.75 % 17.76 % 15.28 % Tangible book value per share: Tangible common equity $ 786,673 $ 714,917 $ 606,929 $ 786,673 $ 606,929 Common shares outstanding 43,764,056 43,719,203 37,492,775 43,764,056 37,492,775 Tangible book value per share $ 17.98 $ 16.35 $ 16.19 $ 17.98 $ 16.19 View source version on businesswire.com: https://www.businesswire.com/news/home/20240125027265/en/
