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Byline Bancorp, Inc. Reports First Quarter 2021 Financial Results

Select First Quarter 2021 Highlights

  • Net income of $21.8 million, or $0.56 per diluted share
  • Net interest margin of 3.77%
  • Return on average assets of 1.34%, as adjusted1 1.37%
  • Efficiency ratio of 51.25%
  • Non-interest bearing deposits 40.1% of total deposits
  • Originated loans and leases increased $181.0 million, total production of $411.8 million
  • Common Equity Tier 1 to risk weighted assets of 12.09%

Byline Bancorp, Inc. (the “Company” or “Byline”) (NYSE: BY), the parent company of Byline Bank (the “Bank”), today reported net income of $21.8 million, or $0.56 per diluted share, for the first quarter of 2021, compared with net income of $12.3 million, or $0.31 per diluted share, for the fourth quarter of 2020 and net income of $3.0 million, or $0.07 per diluted share for the first quarter 2020. Adjusted net income1 was $22.2 million, or $0.57 per adjusted diluted share, for the first quarter of 2021, compared with $15.2 million, or $0.38 per adjusted diluted share1, for the fourth quarter of 2020 and $3.5 million, or $0.09 per adjusted diluted share for the first quarter of 2020.

Roberto R. Herencia, Executive Chairman and Chief Executive Officer of Byline Bancorp, commented, “We delivered a very strong first quarter driven by solid loan and lease production and deposit gathering across our commercial banking platform, the continued reduction in our average cost of deposits, improved asset quality, and increased efficiencies following our ongoing branch consolidations. The significant progress we have made in enhancing our earnings power through organic growth and accretive acquisitions resulted in the highest return on average stockholders’ equity since our IPO in 2017.”

Alberto J. Paracchini, President of Byline Bancorp, added, “Increasing confidence in the strength of the economic recovery is being reflected in higher loan demand and a growing loan pipeline. Given our strong liquidity and capital, we believe we are well positioned to support a higher level of loan growth going forward, which should lead to further increases in our level of profitability with a favorable shift in our mix of earning assets in the coming quarters,” said Mr. Paracchini.

Board Declares Cash Dividend of $0.06 per Share

On April 27, 2021, the Company’s Board of Directors declared a cash dividend of $0.06 per share, payable on May 25, 2021, to stockholders of record of the Company’s common stock as of May 11, 2021.

First Quarter 2021 Updates

Paycheck Protection Program (PPP)

As of March 31, 2021, over $501.2 million of PPP loans were in various stages of the SBA forgiveness process, with over $283.7 million approved for forgiveness by the SBA. As of April 26, 2021, we have received over 2,800 applications and approved the funding of $329.8 million of second round PPP loans.

We have helped our customers navigate over 6,600 applications, resulting in $964.8 million in PPP funds to help these small businesses to support their employees during COVID-19.

(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.

The following table presents the net PPP loans outstanding as of March 31, 2021:

 

 

PPP Loans Outstanding

 

(dollars in thousands)

 

First Round

 

 

Second Round

 

 

Total

 

Principal outstanding

 

$

323,686

 

 

$

307,484

 

 

$

631,170

 

Unearned processing fee

 

 

(5,447

)

 

 

(13,330

)

 

 

(18,777

)

Deferred cost

 

 

1,366

 

 

 

3,247

 

 

 

4,613

 

PPP loans, net

 

$

319,605

 

 

$

297,401

 

 

$

617,006

 

Number of loans

 

 

1,769

 

 

 

2,252

 

 

 

4,021

 

Loan and Lease Deferrals

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

 

 

Active Deferrals

 

 

 

As of March 31, 2021

 

 

As of December 31, 2020

 

 

March 31, 2021 Change from

December 31, 2020

 

 

 

Count

 

 

Amount

 

 

% of Total Loans and Leases(2)

 

 

Count

 

 

Amount

 

 

% of Total Loans and Leases(2)

 

 

Count

 

 

Amount

 

Commercial Banking

 

 

11

 

 

$

19,336

 

 

 

0.47

%

 

 

21

 

 

$

22,905

 

 

 

0.60

%

 

 

(10

)

 

$

(3,569

)

Consumer Loans

 

 

2

 

 

 

49

 

 

<0.01

%

 

 

2

 

 

 

703

 

 

 

0.02

%

 

 

-

 

 

 

(654

)

Leasing

 

 

7

 

 

 

303

 

 

 

0.01

%

 

 

30

 

 

 

1,528

 

 

 

0.04

%

 

 

(23

)

 

 

(1,225

)

Government Guaranteed Lending

 

 

106

 

 

 

34,688

 

 

 

0.84

%

 

 

262

 

 

 

75,444

 

 

 

1.97

%

 

 

(156

)

 

 

(40,756

)

Total

 

 

126

 

 

$

54,376

 

 

 

1.31

%

 

 

315

 

 

$

100,580

 

 

 

2.63

%

 

 

(189

)

 

$

(46,204

)

STATEMENTS OF OPERATIONS

Net Interest Income

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

 

 

Three Months Ended

 

 

March 31, 2021

Change from

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

(dollars in thousands)

 

2021

 

 

2020

 

 

2020

 

 

2020

 

 

2020

 

INTEREST AND DIVIDEND INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans and leases

 

$

53,808

 

 

$

53,441

 

 

$

54,158

 

 

 

0.7

%

 

 

(0.6

)%

Interest on securities

 

 

6,089

 

 

 

6,252

 

 

 

8,016

 

 

 

(2.6

)%

 

 

(24.0

)%

Other interest and dividend income

 

 

262

 

 

 

232

 

 

 

992

 

 

 

12.8

%

 

 

(73.6

)%

Total interest and dividend income

 

 

60,159

 

 

 

59,925

 

 

 

63,166

 

 

 

0.4

%

 

 

(4.8

)%

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

1,421

 

 

 

1,814

 

 

 

7,804

 

 

 

(21.6

)%

 

 

(81.8

)%

Other borrowings

 

 

502

 

 

 

480

 

 

 

1,897

 

 

 

4.6

%

 

 

(73.5

)%

Subordinated notes and debentures

 

 

1,596

 

 

 

1,611

 

 

 

640

 

 

 

(1.0

)%

 

 

149.5

%

Total interest expense

 

 

3,519

 

 

 

3,905

 

 

 

10,341

 

 

 

(9.9

)%

 

 

(66.0

)%

Net interest income

 

$

56,640

 

 

$

56,020

 

 

$

52,825

 

 

 

1.1

%

 

 

7.2

%

(2) Excludes PPP loans.

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

 

 

For the Three Months Ended

 

 

March 31, 2021

 

December 31, 2020

(dollars in thousands)

 

Average

Balance(5)

 

Interest

Inc / Exp

 

Average

Yield /

Rate

 

Average

Balance(5)

 

Interest

Inc / Exp

 

Average

Yield /

Rate

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

55,477

 

 

$

28

 

 

 

0.21

%

 

$

39,500

 

 

$

21

 

 

 

0.22

%

Loans and leases(1)

 

 

4,432,246

 

 

 

53,808

 

 

 

4.92

%

 

 

4,340,388

 

 

 

53,441

 

 

 

4.90

%

Taxable securities

 

 

1,430,625

 

 

 

5,379

 

 

 

1.52

%

 

 

1,364,980

 

 

 

5,555

 

 

 

1.62

%

Tax-exempt securities(2)

 

 

179,364

 

 

 

1,194

 

 

 

2.70

%

 

 

168,878

 

 

 

1,148

 

 

 

2.71

%

Total interest-earning assets

 

$

6,097,712

 

 

$

60,409

 

 

 

4.02

%

 

$

5,913,746

 

 

$

60,165

 

 

 

4.05

%

Allowance for loan and lease losses

 

 

(66,989

)

 

 

 

 

 

 

 

 

(63,891

)

 

 

 

 

 

 

All other assets

 

 

557,042

 

 

 

 

 

 

 

 

 

550,766

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

6,587,765

 

 

 

 

 

 

 

 

$

6,400,621

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest checking

 

$

546,730

 

 

$

199

 

 

 

0.15

%

 

$

578,520

 

 

$

287

 

 

 

0.20

%

Money market accounts

 

 

1,124,101

 

 

 

381

 

 

 

0.14

%

 

 

1,152,012

 

 

 

444

 

 

 

0.15

%

Savings

 

 

577,504

 

 

 

67

 

 

 

0.05

%

 

 

554,633

 

 

 

66

 

 

 

0.05

%

Time deposits

 

 

777,266

 

 

 

774

 

 

 

0.40

%

 

 

802,409

 

 

 

1,017

 

 

 

0.50

%

Total interest-bearing deposits

 

 

3,025,601

 

 

 

1,421

 

 

 

0.19

%

 

 

3,087,574

 

 

 

1,814

 

 

 

0.23

%

Other borrowings

 

 

649,639

 

 

 

502

 

 

 

0.31

%

 

 

577,309

 

 

 

480

 

 

 

0.33

%

Subordinated notes and debentures

 

 

109,859

 

 

 

1,596

 

 

 

5.89

%

 

 

109,704

 

 

 

1,611

 

 

 

5.84

%

Total borrowings

 

 

759,498

 

 

 

2,098

 

 

 

1.12

%

 

 

687,013

 

 

 

2,091

 

 

 

1.21

%

Total interest-bearing liabilities

 

$

3,785,099

 

 

$

3,519

 

 

 

0.38

%

 

$

3,774,587

 

 

$

3,905

 

 

 

0.41

%

Non-interest-bearing demand deposits

 

 

1,924,178

 

 

 

 

 

 

 

 

 

1,761,902

 

 

 

 

 

 

 

Other liabilities

 

 

72,036

 

 

 

 

 

 

 

 

 

58,539

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

806,452

 

 

 

 

 

 

 

 

 

805,593

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

6,587,765

 

 

 

 

 

 

 

 

$

6,400,621

 

 

 

 

 

 

 

Net interest spread(3)

 

 

 

 

 

 

 

 

3.64

%

 

 

 

 

 

 

 

 

3.64

%

Net interest income, fully taxable equivalent

 

 

 

 

$

56,890

 

 

 

 

 

 

 

 

$

56,260

 

 

 

 

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

 

 

 

 

 

 

 

 

3.78

%

 

 

 

 

 

 

 

 

3.78

%

Tax-equivalent adjustment

 

 

 

 

 

(250

)

 

 

0.01

%

 

 

 

 

 

(240

)

 

 

0.01

%

Net interest income

 

 

 

 

$

56,640

 

 

 

 

 

 

 

 

$

56,020

 

 

 

 

Net interest margin(4)

 

 

 

 

 

 

 

 

3.77

%

 

 

 

 

 

 

 

 

3.77

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loan accretion impact on margin

 

 

 

 

$

1,968

 

 

 

0.13

%

 

 

 

 

$

2,304

 

 

 

0.16

%

(1)

 

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

(2)

 

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

(3)

 

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

(4)

 

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

(5)

 

Average balances are average daily balances.

Net interest income for the first quarter of 2021 was $56.6 million, an increase of $620,000, or 1.1%, from the fourth quarter of 2020.

The increase in net interest income was primarily due to:

  • An increase of $367,000 in interest income on loans and leases, due to the recognition of net fee income related to PPP loan forgiveness; and
  • A decrease of $393,000 in interest expense on deposits, due to maturities of higher-rate time deposits and lower rates paid;

Partially offset by:

  • A decrease of $163,000 in interest income on securities, due to elevated prepayment speeds and runoff of higher yielding securities resulting in lower yields.

Tax-equivalent net interest margin for the first quarter of 2021 was 3.78%, flat compared to the fourth quarter of 2020. Total net accretion income on acquired loans contributed 13 basis points to the net interest margin for the first quarter of 2021 compared to 16 basis points for the fourth quarter of 2020, a decrease of three basis points. PPP interest income and net fee income combined contributed $7.0 million to net interest income for the first quarter 2021 compared to $5.5 million for the fourth quarter 2020.

The average cost of total deposits was 0.12% for the first quarter of 2021, a decrease of three basis points compared to the fourth quarter of 2020, mainly due to a lower average cost of time deposits and interest-bearing demand, as well as a favorable change in deposit mix. Average non-interest-bearing demand deposits increased $162.3 million, while average time deposits decreased by $25.1 million. Average non-interest-bearing demand deposits were 38.9% of average total deposits for the first quarter of 2021 compared to 36.3% the fourth quarter of 2020.

Provision for Loan and Lease Losses

The provision for loan and lease losses was $4.4 million for the first quarter of 2021, a decrease of $5.9 million compared to $10.2 million for the fourth quarter of 2020. The provision during the first quarter of 2021 mainly included net specific impairments of $5.6 million primarily driven by the unguaranteed portion of government guaranteed loans, partially offset by a release in provision for acquired impaired loans.

Non-interest Income

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

 

 

Three Months Ended

 

 

March 31, 2021

Change from

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

(dollars in thousands)

 

2021

 

 

2020

 

 

2020

 

 

2020

 

 

2020

 

NON-INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges on deposits

 

$

1,664

 

 

$

1,740

 

 

$

1,673

 

 

 

(4.3

)%

 

 

(0.5

)%

Loan servicing revenue

 

 

2,769

 

 

 

2,645

 

 

 

2,758

 

 

 

4.7

%

 

 

0.4

%

Loan servicing asset revaluation

 

 

(1,505

)

 

 

(2,298

)

 

 

(3,064

)

 

 

(34.5

)%

 

 

(50.9

)%

ATM and interchange fees

 

 

1,012

 

 

 

1,076

 

 

 

1,216

 

 

 

(5.9

)%

 

 

(16.7

)%

Net gains on sales of securities available-for-sale

 

 

1,462

 

 

 

2,889

 

 

 

1,375

 

 

 

(49.4

)%

 

 

6.3

%

Change in fair value of equity securities, net

 

 

(206

)

 

 

428

 

 

 

(619

)

 

 

(148.1

)%

 

 

(66.7

)%

Net gains on sales of loans

 

 

8,319

 

 

 

9,449

 

 

 

4,773

 

 

 

(12.0

)%

 

 

74.3

%

Wealth management and trust income

 

 

768

 

 

 

710

 

 

 

669

 

 

 

8.1

%

 

 

14.7

%

Other non-interest income

 

 

1,459

 

 

 

1,051

 

 

 

526

 

 

 

38.7

%

 

 

178.0

%

Total non-interest income

 

$

15,742

 

 

$

17,690

 

 

$

9,307

 

 

 

(11.0

)%

 

 

69.2

%

Non-interest income for the first quarter of 2021 was $15.7 million, a decrease of $1.9 million, or 11.0%, compared to $17.7 million for the fourth quarter of 2020.

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

  • A decrease of $1.1 million in net gains on sales of loans, mainly due to lower volume of loans sold; and
  • A decrease of $1.4 million in net gains on sales of securities available-for-sale resulting from decreased volume of sales.

Partially offset by:

  • A decrease of $793,000 for loan servicing asset revaluation charges, which was $1.5 million for the current quarter compared to $2.3 million in the prior quarter, due to changes in fair value of the servicing asset.

During the first quarter of 2021, we sold $73.9 million of U.S. government guaranteed loans compared to $108.1 million during the fourth quarter of 2020.

Non-interest Expense

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

 

 

Three Months Ended

 

 

March 31, 2021

Change from

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

(dollars in thousands)

 

2021

 

 

2020

 

 

2020

 

 

2020

 

 

2020

 

NON-INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

$

21,806

 

 

$

22,559

 

 

$

24,666

 

 

 

(3.3

)%

 

 

(11.6

)%

Occupancy and equipment expense, net

 

 

5,779

 

 

 

6,854

 

 

 

5,524

 

 

 

(15.7

)%

 

 

4.6

%

Loan and lease related expenses

 

 

951

 

 

 

1,324

 

 

 

1,318

 

 

 

(28.2

)%

 

 

(27.8

)%

Legal, audit and other professional fees

 

 

2,214

 

 

 

1,336

 

 

 

2,334

 

 

 

65.7

%

 

 

(5.1

)%

Data processing

 

 

2,755

 

 

 

2,748

 

 

 

2,665

 

 

 

0.3

%

 

 

3.4

%

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

 

 

621

 

 

 

495

 

 

 

519

 

 

 

25.3

%

 

 

19.6

%

Other intangible assets amortization expense

 

 

1,749

 

 

 

1,892

 

 

 

1,893

 

 

 

(7.6

)%

 

 

(7.6

)%

Other non-interest expense

 

 

2,967

 

 

 

9,813

 

 

 

4,742

 

 

 

(69.8

)%

 

 

(37.4

)%

Total non-interest expense

 

$

38,842

 

 

$

47,021

 

 

$

43,661

 

 

 

(17.4

)%

 

 

(11.0

)%

Non-interest expense for the first quarter of 2021 was $38.8 million, a decrease of $8.2 million, or 17.4%, from $47.0 million for the fourth quarter of 2020 mainly attributed to our strategic branch consolidation efforts during the fourth quarter of 2020.

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

  • A decrease of $6.8 million in other non-interest expense, mainly due to lower impairment charges on assets held for sale and net losses on other asset disposals; and
  • A decrease of $1.1 million in occupancy and equipment expense, net, mainly due to lower lease obligation expense.

Partially offset by:

  • An increase of $878,000 in legal, audit and other professional fees mainly due to increased loan-related and other legal fees.

Our efficiency ratio improved to 51.25% for the first quarter of 2021 compared to 61.22% for the fourth quarter of 2020. Excluding impairment charges on assets held for sale, the Company's adjusted efficiency ratio1 was 50.41% for the first quarter of 2021, compared with 55.77% for the fourth quarter of 2020.

INCOME TAXES

We recorded income tax expense of $7.4 million during the first quarter of 2021, compared to $4.2 million during the fourth quarter of 2020. The effective tax rate for both periods was 25.3%.

STATEMENTS OF FINANCIAL CONDITION

Total assets were $6.8 billion at March 31, 2021, an increase of $359.5 million compared to $6.4 billion at December 31, 2020.

The current quarter increase was primarily due to:

  • An increase in securities of $228.0 million, principally a result of purchases of mortgage backed securities during the quarter;
  • An increase in loans and leases of $114.1 million, primarily due to the new round of PPP loan funding; and
  • An increase in bank-owned life insurance of $50.2 million primarily due to the purchase of additional policies.

Partially offset by:

  • A decrease in other assets of $107.1 million mainly due to the timing of settlement of government guaranteed loans and securities sold during the prior quarter.

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

 

 

March 31, 2021

 

 

December 31, 2020

 

 

March 31, 2020

 

(dollars in thousands)

 

Amount

 

 

% of Total

 

 

Amount

 

 

% of Total

 

 

Amount

 

 

% of Total

 

Originated loans and leases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

1,064,151

 

 

 

23.9

%

 

$

1,017,587

 

 

 

23.5

%

 

$

839,244

 

 

 

21.7

%

Residential real estate

 

 

399,958

 

 

 

9.0

%

 

 

414,220

 

 

 

9.6

%

 

 

480,946

 

 

 

12.5

%

Construction, land development, and other land

 

 

238,122

 

 

 

5.3

%

 

 

226,408

 

 

 

5.2

%

 

 

242,001

 

 

 

6.3

%

Commercial and industrial

 

 

1,285,759

 

 

 

28.9

%

 

 

1,276,527

 

 

 

29.4

%

 

 

1,263,688

 

 

 

32.7

%

Paycheck protection program

 

 

617,006

 

 

 

13.8

%

 

 

517,815

 

 

 

11.9

%

 

 

 

 

 

 

Installment and other

 

 

1,094

 

 

 

0.0

%

 

 

1,267

 

 

 

0.0

%

 

 

4,594

 

 

 

0.1

%

Leasing financing receivables

 

 

243,399

 

 

 

5.5

%

 

 

214,636

 

 

 

4.9

%

 

 

154,173

 

 

 

4.0

%

Total originated loans and leases

 

$

3,849,489

 

 

 

86.4

%

 

$

3,668,460

 

 

 

84.5

%

 

$

2,984,646

 

 

 

77.3

%

Acquired impaired loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

96,059

 

 

 

2.2

%

 

$

108,484

 

 

 

2.5

%

 

$

127,895

 

 

 

3.3

%

Residential real estate

 

 

74,283

 

 

 

1.7

%

 

 

78,840

 

 

 

1.9

%

 

 

94,198

 

 

 

2.5

%

Construction, land development, and other land

 

 

1,992

 

 

 

0.0

%

 

 

4,113

 

 

 

0.1

%

 

 

5,291

 

 

 

0.1

%

Commercial and industrial

 

 

8,842

 

 

 

0.2

%

 

 

10,178

 

 

 

0.2

%

 

 

15,808

 

 

 

0.4

%

Installment and other

 

 

191

 

 

 

0.0

%

 

 

202

 

 

 

0.0

%

 

 

236

 

 

 

0.0

%

Total acquired impaired loans

 

$

181,367

 

 

 

4.1

%

 

$

201,817

 

 

 

4.7

%

 

$

243,428

 

 

 

6.3

%

Acquired non-impaired loans and leases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

271,458

 

 

 

6.0

%

 

$

295,599

 

 

 

6.8

%

 

$

327,820

 

 

 

8.5

%

Residential real estate

 

 

71,038

 

 

 

1.6

%

 

 

79,211

 

 

 

1.8

%

 

 

118,853

 

 

 

3.1

%

Construction, land development, and other land

 

 

210

 

 

 

0.0

%

 

 

212

 

 

 

0.0

%

 

 

30,484

 

 

 

0.8

%

Commercial and industrial

 

 

69,795

 

 

 

1.6

%

 

 

82,195

 

 

 

1.9

%

 

 

135,063

 

 

 

3.5

%

Installment and other

 

 

331

 

 

 

0.0

%

 

 

536

 

 

 

0.0

%

 

 

891

 

 

 

0.0

%

Leasing financing receivables

 

 

10,932

 

 

 

0.3

%

 

 

12,505

 

 

 

0.3

%

 

 

19,074

 

 

 

0.5

%

Total acquired non-impaired loans and leases

 

$

423,764

 

 

 

9.5

%

 

$

470,258

 

 

 

10.8

%

 

$

632,185

 

 

 

16.4

%

Total loans and leases

 

$

4,454,620

 

 

 

100.0

%

 

$

4,340,535

 

 

 

100.0

%

 

$

3,860,259

 

 

 

100.0

%

Allowance for loan and lease losses

 

 

(65,590

)

 

 

 

 

 

 

(66,347

)

 

 

 

 

 

 

(41,840

)

 

 

 

 

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

 

$

4,389,030

 

 

 

 

 

 

$

4,274,188

 

 

 

 

 

 

$

3,818,419

 

 

 

 

 

ASSET QUALITY

Non-Performing Assets

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2021

Change from

 

(dollars in thousands)

 

March 31,

2021

 

 

December 31, 2020

 

 

March 31,

2020

 

 

December 31, 2020

 

 

March 31,

2020

 

Non-performing assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans and leases

 

$

37,084

 

 

$

41,103

 

 

$

48,964

 

 

 

(9.8

)%

 

 

(24.3

)%

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

 

 

 

 

 

 

 

 

 

 

%

 

%

Total non-performing loans and leases

 

$

37,084

 

 

$

41,103

 

 

$

48,964

 

 

 

(9.8

)%

 

 

(24.3

)%

Other real estate owned

 

 

5,952

 

 

 

6,350

 

 

 

9,273

 

 

 

(6.3

)%

 

 

(35.8

)%

Total non-performing assets

 

$

43,036

 

 

$

47,453

 

 

$

58,237

 

 

 

(9.3

)%

 

 

(26.1

)%

Accruing troubled debt restructured loans (1)

 

$

2,719

 

 

$

2,495

 

 

$

1,725

 

 

 

9.0

%

 

 

57.7

%

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

 

 

0.83

%

 

 

0.95

%

 

 

1.27

%

 

 

 

 

 

 

 

 

Total non-performing assets as a percentage of total assets

 

 

0.64

%

 

 

0.74

%

 

 

1.02

%

 

 

 

 

 

 

 

 

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

 

 

176.87

%

 

 

161.42

%

 

 

85.45

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing assets guaranteed by

U.S. government:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans guaranteed

 

$

3,388

 

 

$

3,645

 

 

$

4,957

 

 

 

(7.0

)%

 

 

(31.7

)%

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

 

 

 

 

 

 

 

 

 

 

—%

 

 

—%

 

Total non-performing loans guaranteed

 

$

3,388

 

 

$

3,645

 

 

$

4,957

 

 

 

(7.0

)%

 

 

(31.7

)%

Accruing troubled debt restructured loans guaranteed (1)

 

$

 

 

$

 

 

$

 

 

—%

 

 

—%

 

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

 

 

0.76

%

 

 

0.86

%

 

 

1.14

%

 

 

 

 

 

 

 

 

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

 

 

0.59

%

 

 

0.69

%

 

 

0.93

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Accruing troubled debt restructured loans are not included in total non-performing loans and leases or in non-performing assets.

Variances in non-performing assets were:

  • Non-performing loans and leases were $37.1 million at March 31, 2021, a decrease of $4.0 million from $41.1 million at December 31, 2020; and
  • Other real estate owned was $6.0 million at March 31, 2021, a decrease of $398,000 from $6.4 million at December 31, 2020 mainly due to sales and write downs.

U.S. government guaranteed balances of non-performing loans were $3.4 million at March 31, 2021 and $3.6 million at December 31, 2020.

Allowance for Loan and Lease Losses

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

 

 

Three Months Ended

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

(dollars in thousands)

 

2021

 

 

2020

 

 

2020

 

Allowance for loan and lease losses, beginning of period

 

$

66,347

 

 

$

61,258

 

 

$

31,936

 

Provision for loan and lease losses

 

 

4,367

 

 

 

10,236

 

 

 

14,455

 

Net charge-offs of loans and leases

 

 

(5,124

)

 

 

(5,147

)

 

 

(4,551

)

Allowance for loan and lease losses, end of period

 

$

65,590

 

 

$

66,347

 

 

$

41,840

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

1.47

%

 

 

1.53

%

 

 

1.08

%

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

 

 

0.47

%

 

 

0.47

%

 

 

0.48

%

Provision for loan and lease losses to net charge-offs during the period

 

 

0.85

x

 

 

1.99

x

 

 

3.18

x

The allowance for loan and lease losses as a percentage of total loans and leases held for investment decreased to 1.47% at March 31, 2021 compared to 1.53% at December 31, 2020. The allowance for loan and lease losses as a percentage of total loans and leases held for investment excluding PPP loans decreased to 1.71% at March 31, 2021 from 1.74% at December 31, 2020.

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

Net Charge-Offs

Net charge-offs during the first quarter of 2021 and fourth quarter of 2020 were $5.1 million for each quarter, or 0.47% of average loans and leases, on an annualized basis, for each quarter.

Net charge-offs for the first quarter of 2021 included $3.3 million in the unguaranteed portion of U.S. government guaranteed loans, while net charge-offs for the fourth quarter of 2020 included $5.0 million in the unguaranteed portion of U.S. government guaranteed loans.

Deposits and Other Liabilities

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2021

Change from

 

(dollars in thousands)

 

March 31, 2021

 

 

December 31, 2020

 

 

March 31, 2020

 

 

December 31, 2020

 

 

March 31, 2020

 

Non-interest-bearing demand deposits

 

$

2,015,643

 

 

$

1,762,676

 

 

$

1,290,896

 

 

 

14.4

%

 

 

56.1

%

Interest-bearing checking accounts

 

 

567,660

 

 

 

494,424

 

 

 

355,678

 

 

 

14.8

%

 

 

59.6

%

Money market demand accounts

 

 

1,075,330

 

 

 

1,142,709

 

 

 

1,104,276

 

 

 

(5.9

)%

 

 

(2.6

)%

Other savings

 

 

600,725

 

 

 

564,700

 

 

 

486,131

 

 

 

6.4

%

 

 

23.6

%

Time deposits (below $250,000)

 

 

579,682

 

 

 

600,810

 

 

 

800,759

 

 

 

(3.5

)%

 

 

(27.6

)%

Time deposits ($250,000 and above)

 

 

185,500

 

 

 

186,712

 

 

 

201,096

 

 

 

(0.6

)%

 

 

(7.8

)%

Total deposits

 

$

5,024,540

 

 

$

4,752,031

 

 

$

4,238,836

 

 

 

5.7

%

 

 

18.5

%

Total deposits were $5.0 billion at March 31, 2021, an increase of $272.5 million, or 5.7%, compared to $4.8 billion at December 31, 2020. Non-interest-bearing deposits were 40.1% and 37.1% of total deposits at March 31, 2021 and December 31, 2020, respectively.

The increase in the current quarter was primarily due to:

  • An increase in non-interest-bearing deposits of $253.0 million, due to increases in commercial deposits; and
  • An increase in interest-bearing checking accounts of $73.2 million, mostly due to increases in personal and brokered accounts.

Partially offset by:

  • A decrease in money market demand accounts of $67.4 million, principally driven by decreases purchase money market deposits offset by increases in seasonal public funds.

Total borrowings and other liabilities were $931.8 million at March 31, 2021, an increase of $98.6 million from $833.2 million at December 31, 2020, primarily driven by an increase in Federal Home Loan Bank advances of $95.0 million. The Paycheck Protection Program Liquidity Facility increased $15.7 million to $387.6 million at March 31, 2021 from $371.9 million at December 31, 2020.

Stockholders’ Equity

Total stockholders’ equity was $793.8 million at March 31, 2021, a decrease of $11.7 million from $805.5 million at December 31, 2020. The decrease was primarily due to a decrease in the fair value of available-for-sale securities.

Under its board approved stock repurchase program announced in the fourth quarter of 2020, the Company repurchased an aggregate of 332,744 shares at an average price per share of $19.12 and is authorized to purchase up to an aggregate of 1,250,000 shares of the Company’s outstanding common stock. The program is in effect until December 31, 2022, unless terminated earlier.

The following table presents the actual regulatory capital dollar amounts and ratios of the Company and Byline Bank as of March 31, 2021:

 

 

Actual

 

 

Minimum Capital

Required

 

 

Required to be

Considered

Well Capitalized

 

March 31, 2021

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

Total capital to risk weighted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

793,016

 

 

 

15.96

%

 

$

397,443

 

 

 

8.00

%

 

N/A

 

 

N/A

 

Bank

 

 

701,759

 

 

 

14.17

%

 

 

396,075

 

 

 

8.00

%

 

$

495,093

 

 

 

10.00

%

Tier 1 capital to risk weighted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

655,851

 

 

 

13.20

%

 

$

298,083

 

 

 

6.00

%

 

N/A

 

 

N/A

 

Bank

 

 

639,805

 

 

 

12.92

%

 

 

297,056

 

 

 

6.00

%

 

$

396,075

 

 

 

8.00

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

600,413

 

 

 

12.09

%

 

$

223,562

 

 

 

4.50

%

 

N/A

 

 

N/A

 

Bank

 

 

639,805

 

 

 

12.92

%

 

 

222,792

 

 

 

4.50

%

 

$

321,811

 

 

 

6.50

%

Tier 1 capital to average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

655,851

 

 

 

10.93

%

 

$

239,918

 

 

 

4.00

%

 

N/A

 

 

N/A

 

Bank

 

 

639,805

 

 

 

10.68

%

 

 

239,711

 

 

 

4.00

%

 

$

299,639

 

 

 

5.00

%

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

Conference Call, Webcast and Slide Presentation

We will host a conference call and webcast at 9:00 a.m. Central Time on Friday, April 30, 2021 to discuss our quarterly financial results. Analysts and investors may participate in the question-and-answer session. The call can be accessed via telephone at (877) 512-8755. A recorded replay can be accessed through May 14, 2021 by dialing (877) 344-7529; passcode: 10153981.

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

About Byline Bancorp, Inc.

Headquartered in Chicago, Byline Bancorp, Inc. is the parent company for Byline Bank, a full service commercial bank serving small- and medium-sized businesses, financial sponsors, and consumers. Byline Bank has approximately $6.7 billion in assets and operates more than 40 full service branch locations throughout the Chicago and Milwaukee metropolitan areas. Byline Bank offers a broad range of commercial and retail banking products and services including small ticket equipment leasing solutions and is one of the top five Small Business Administration lenders in the United States.

Non-GAAP Financial Measures

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

Forward-Looking Statements

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

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

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

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

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)

 

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

(dollars in thousands)

 

2021

 

 

2020

 

 

2020

 

 

2020

 

 

2020

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

47,101

 

 

$

41,432

 

 

$

47,433

 

 

$

51,818

 

 

$

45,233

 

Interest bearing deposits with other banks

 

 

66,038

 

 

 

41,988

 

 

 

53,645

 

 

 

88,113

 

 

 

74,386

 

Cash and cash equivalents

 

 

113,139

 

 

 

83,420

 

 

 

101,078

 

 

 

139,931

 

 

 

119,619

 

Equity and other securities, at fair value

 

 

8,557

 

 

 

8,764

 

 

 

8,335

 

 

 

8,181

 

 

 

7,413

 

Securities available-for-sale, at fair value

 

 

1,675,907

 

 

 

1,447,230

 

 

 

1,509,211

 

 

 

1,426,871

 

 

 

1,299,483

 

Securities held-to-maturity, at amortized cost

 

 

3,892

 

 

 

4,395

 

 

 

4,400

 

 

 

4,404

 

 

 

4,408

 

Restricted stock, at cost

 

 

19,057

 

 

 

10,507

 

 

 

9,652

 

 

 

6,232

 

 

 

24,197

 

Loans held for sale

 

 

28,584

 

 

 

7,924

 

 

 

49,049

 

 

 

3,031

 

 

 

13,299

 

Loans and leases:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans and leases

 

 

4,454,620

 

 

 

4,340,535

 

 

 

4,374,517

 

 

 

4,391,122

 

 

 

3,860,259

 

Allowance for loan and lease losses

 

 

(65,590

)

 

 

(66,347

)

 

 

(61,258

)

 

 

(51,300

)

 

 

(41,840

)

Net loans and leases

 

 

4,389,030

 

 

 

4,274,188

 

 

 

4,313,259

 

 

 

4,339,822

 

 

 

3,818,419

 

Servicing assets, at fair value

 

 

22,140

 

 

 

22,042

 

 

 

21,267

 

 

 

18,351

 

 

 

17,800

 

Premises and equipment, net

 

 

85,182

 

 

 

86,728

 

 

 

94,638

 

 

 

95,546

 

 

 

96,446

 

Operating lease right-of-use assets

 

 

9,672

 

 

 

 

 

 

 

 

 

 

 

 

 

Other real estate owned, net

 

 

5,952

 

 

 

6,350

 

 

 

8,150

 

 

 

8,652

 

 

 

9,273

 

Goodwill and other intangible assets, net

 

 

170,882

 

 

 

172,631

 

 

 

174,523

 

 

 

176,470

 

 

 

178,362

 

Bank-owned life insurance

 

 

60,258

 

 

 

10,009

 

 

 

9,952

 

 

 

9,896

 

 

 

9,898

 

Deferred tax assets, net

 

 

48,662

 

 

 

40,181

 

 

 

35,945

 

 

 

37,082

 

 

 

33,845

 

Accrued interest receivable and other assets

 

 

109,211

 

 

 

216,283

 

 

 

157,054

 

 

 

119,049

 

 

 

102,292

 

Total assets

 

$

6,750,125

 

 

$

6,390,652

 

 

$

6,496,513

 

 

$

6,393,518

 

 

$

5,734,754

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing demand deposits

 

$

2,015,643

 

 

$

1,762,676

 

 

$

1,718,682

 

 

$

1,768,675

 

 

$

1,290,896

 

Interest-bearing deposits

 

 

3,008,897

 

 

 

2,989,355

 

 

 

3,091,563

 

 

 

3,189,670

 

 

 

2,947,940

 

Total deposits

 

 

5,024,540

 

 

 

4,752,031

 

 

 

4,810,245

 

 

 

4,958,345

 

 

 

4,238,836

 

Other borrowings

 

 

749,719

 

 

 

647,901

 

 

 

710,560

 

 

 

510,414

 

 

 

640,647

 

Subordinated notes, net

 

 

73,386

 

 

 

73,342

 

 

 

73,299

 

 

 

48,777

 

 

 

 

Junior subordinated debentures issued to capital trusts, net

 

 

36,565

 

 

 

36,451

 

 

 

36,331

 

 

 

36,206

 

 

 

37,462

 

Operating lease liabilities

 

 

12,273

 

 

 

 

 

 

 

 

 

 

 

 

 

Accrued expenses and other liabilities

 

 

59,847

 

 

 

75,463

 

 

 

71,382

 

 

 

58,841

 

 

 

55,142

 

Total liabilities

 

 

5,956,330

 

 

 

5,585,188

 

 

 

5,701,817

 

 

 

5,612,583

 

 

 

4,972,087

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

Common stock

 

 

385

 

 

 

384

 

 

 

383

 

 

 

381

 

 

 

380

 

Additional paid-in capital

 

 

589,209

 

 

 

587,165

 

 

 

586,057

 

 

 

583,307

 

 

 

582,517

 

Retained earnings

 

 

210,385

 

 

 

191,098

 

 

 

180,162

 

 

 

168,444

 

 

 

160,652

 

Treasury stock

 

 

(8,275

)

 

 

(1,668

)

 

 

(1,668

)

 

 

(1,668

)

 

 

(1,668

)

Accumulated other comprehensive income (loss), net of tax

 

 

(8,347

)

 

 

18,047

 

 

 

19,324

 

 

 

20,033

 

 

 

10,348

 

Total stockholders’ equity

 

 

793,795

 

 

 

805,464

 

 

 

794,696

 

 

 

780,935

 

 

 

762,667

 

Total liabilities and stockholders’ equity

$

6,750,125

 

 

$

6,390,652

 

 

$

6,496,513

 

 

$

6,393,518

 

 

$

5,734,754

 

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

(dollars in thousands, except per share data)

 

2021

 

 

2020

 

 

2020

 

 

2020

 

 

2020

 

INTEREST AND DIVIDEND INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans and leases

 

$

53,808

 

 

$

53,441

 

 

$

51,036

 

 

$

50,153

 

 

$

54,158

 

Interest on securities

 

 

6,089

 

 

 

6,252

 

 

 

7,070

 

 

 

7,530

 

 

 

8,016

 

Other interest and dividend income

 

 

262

 

 

 

232

 

 

 

128

 

 

 

222

 

 

 

992

 

Total interest and dividend income

 

 

60,159

 

 

 

59,925

 

 

 

58,234

 

 

 

57,905

 

 

 

63,166

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

1,421

 

 

 

1,814

 

 

 

2,760

 

 

 

4,246

 

 

 

7,804

 

Other borrowings

 

 

502

 

 

 

480

 

 

 

465

 

 

 

476

 

 

 

1,897

 

Subordinated notes and debentures

 

 

1,596

 

 

 

1,611

 

 

 

1,485

 

 

 

574

 

 

 

640

 

Total interest expense

 

 

3,519

 

 

 

3,905

 

 

 

4,710

 

 

 

5,296

 

 

 

10,341

 

Net interest income

 

 

56,640

 

 

 

56,020

 

 

 

53,524

 

 

 

52,609

 

 

 

52,825

 

PROVISION FOR LOAN AND LEASE LOSSES

 

 

4,367

 

 

 

10,236

 

 

 

15,740

 

 

 

15,518

 

 

 

14,455

 

Net interest income after provision for loan and lease losses

 

 

52,273

 

 

 

45,784

 

 

 

37,784

 

 

 

37,091

 

 

 

38,370

 

NON-INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges on deposits

 

 

1,664

 

 

 

1,740

 

 

 

1,603

 

 

 

1,455

 

 

 

1,673

 

Loan servicing revenue

 

 

2,769

 

 

 

2,645

 

 

 

2,936

 

 

 

2,980

 

 

 

2,758

 

Loan servicing asset revaluation

 

 

(1,505

)

 

 

(2,298

)

 

 

1,122

 

 

 

(711

)

 

 

(3,064

)

ATM and interchange fees

 

 

1,012

 

 

 

1,076

 

 

 

1,028

 

 

 

845

 

 

 

1,216

 

Net gains on sales of securities available-for-sale

 

 

1,462

 

 

 

2,889

 

 

 

1,037

 

 

 

 

 

 

1,375

 

Change in fair value of equity securities, net

 

 

(206

)

 

 

428

 

 

 

154

 

 

 

766

 

 

 

(619

)

Net gains on sales of loans

 

 

8,319

 

 

 

9,449

 

 

 

12,671

 

 

 

6,456

 

 

 

4,773

 

Wealth management and trust income

 

 

768

 

 

 

710

 

 

 

693

 

 

 

608

 

 

 

669

 

Other non-interest income

 

 

1,459

 

 

 

1,051

 

 

 

990

 

 

 

430

 

 

 

526

 

Total non-interest income

 

 

15,742

 

 

 

17,690

 

 

 

22,234

 

 

 

12,829

 

 

 

9,307

 

NON-INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

21,806

 

 

 

22,559

 

 

 

23,126

 

 

 

19,405

 

 

 

24,666

 

Occupancy and equipment expense, net

 

 

5,779

 

 

 

6,854

 

 

 

5,220

 

 

 

5,359

 

 

 

5,524

 

Loan and lease related expenses

 

 

951

 

 

 

1,324

 

 

 

2,053

 

 

 

1,260

 

 

 

1,318

 

Legal, audit, and other professional fees

 

 

2,214

 

 

 

1,336

 

 

 

2,390

 

 

 

2,078

 

 

 

2,334

 

Data processing

 

 

2,755

 

 

 

2,748

 

 

 

2,661

 

 

 

2,826

 

 

 

2,665

 

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

 

 

621

 

 

 

495

 

 

 

349

 

 

 

456

 

 

 

519

 

Other intangible assets amortization expense

 

 

1,749

 

 

 

1,892

 

 

 

1,947

 

 

 

1,892

 

 

 

1,893

 

Other non-interest expense

 

 

2,967

 

 

 

9,813

 

 

 

3,941

 

 

 

3,777

 

 

 

4,742

 

Total non-interest expense

 

 

38,842

 

 

 

47,021

 

 

 

41,687

 

 

 

37,053

 

 

 

43,661

 

INCOME BEFORE PROVISION FOR INCOME TAXES

 

 

29,173

 

 

 

16,453

 

 

 

18,331

 

 

 

12,867

 

 

 

4,016

 

PROVISION FOR INCOME TAXES

 

 

7,375

 

 

 

4,162

 

 

 

5,260

 

 

 

3,728

 

 

 

1,050

 

NET INCOME

 

 

21,798

 

 

 

12,291

 

 

 

13,071

 

 

 

9,139

 

 

 

2,966

 

Dividends on preferred shares

 

 

196

 

 

 

196

 

 

 

196

 

 

 

195

 

 

 

196

 

INCOME AVAILABLE TO COMMON STOCKHOLDERS

 

$

21,602

 

 

$

12,095

 

 

$

12,875

 

 

$

8,944

 

 

$

2,770

 

EARNINGS PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.57

 

 

$

0.32

 

 

$

0.34

 

 

$

0.24

 

 

$

0.07

 

Diluted

 

$

0.56

 

 

$

0.31

 

 

$

0.34

 

 

$

0.24

 

 

$

0.07

 

BYLINE BANCORP, INC. AND SUBSIDIARIES

SELECTED FINANCIAL DATA (unaudited)

 

 

 

As of or For the Three Months Ended

 

(dollars in thousands, except share and

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

per share data)

 

2021

 

 

2020

 

 

2020

 

 

2020

 

 

2020

 

Common Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$

0.57

 

 

$

0.32

 

 

$

0.34

 

 

$

0.24

 

 

$

0.07

 

Diluted earnings per common share

 

$

0.56

 

 

$

0.31

 

 

$

0.34

 

 

$

0.24

 

 

$

0.07

 

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

 

$

0.57

 

 

$

0.38

 

 

$

0.34

 

 

$

0.24

 

 

$

0.09

 

Weighted average common shares outstanding (basic)

 

 

38,164,201

 

 

 

38,202,665

 

 

 

38,057,350

 

 

 

37,919,480

 

 

 

37,943,333

 

Weighted average common shares outstanding (diluted)

 

 

38,915,482

 

 

 

38,574,129

 

 

 

38,249,335

 

 

 

38,027,289

 

 

 

38,663,658

 

Common shares outstanding

 

 

38,641,851

 

 

 

38,618,054

 

 

 

38,568,916

 

 

 

38,383,217

 

 

 

38,383,021

 

Cash dividends per common share

 

$

0.06

 

 

$

0.03

 

 

$

0.03

 

 

$

0.03

 

 

$

0.03

 

Dividend payout ratio on common stock

 

 

10.71

%

 

 

9.68

%

 

 

8.82

%

 

 

12.50

%

 

 

42.86

%

Tangible book value per common share(1)

 

$

15.85

 

 

$

16.12

 

 

$

15.81

 

 

$

15.47

 

 

$

14.95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Key Ratios and Performance Metrics (annualized where applicable)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

3.78

%

 

 

3.78

%

 

 

3.61

%

 

 

3.72

%

 

 

4.18

%

Average cost of deposits

 

 

0.12

%

 

 

0.15

%

 

 

0.22

%

 

 

0.36

%

 

 

0.75

%

Efficiency ratio(2)

 

 

51.25

%

 

 

61.22

%

 

 

52.46

%

 

 

53.73

%

 

 

67.23

%

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

 

 

50.41

%

 

 

55.77

%

 

 

52.42

%

 

 

53.73

%

 

 

66.08

%

Non-interest expense to average assets

 

 

2.39

%

 

 

2.92

%

 

 

2.59

%

 

 

2.41

%

 

 

3.15

%

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

 

 

2.35

%

 

 

2.67

%

 

 

2.59

%

 

 

2.41

%

 

 

3.10

%

Return on average stockholders' equity

 

 

10.96

%

 

 

6.07

%

 

 

6.57

%

 

 

4.74

%

 

 

1.56

%

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

 

 

11.18

%

 

 

7.50

%

 

 

6.58

%

 

 

4.74

%

 

 

1.83

%

Return on average assets

 

 

1.34

%

 

 

0.76

%

 

 

0.81

%

 

 

0.59

%

 

 

0.21

%

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

 

 

1.37

%

 

 

0.94

%

 

 

0.81

%

 

 

0.59

%

 

 

0.25

%

Non-interest income to total revenues(1)

 

 

21.75

%

 

 

24.00

%

 

 

29.35

%

 

 

19.61

%

 

 

14.98

%

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

 

 

2.06

%

 

 

1.66

%

 

 

2.12

%

 

 

1.85

%

 

 

1.33

%

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

 

 

2.10

%

 

 

1.91

%

 

 

2.12

%

 

 

1.85

%

 

 

1.39

%

Return on average tangible common stockholders' equity(1)

 

 

14.86

%

 

 

8.61

%

 

 

9.39

%

 

 

7.05

%

 

 

2.89

%

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

 

 

15.15

%

 

 

10.47

%

 

 

9.40

%

 

 

7.05

%

 

 

3.25

%

Non-interest-bearing deposits to total deposits

 

 

40.12

%

 

 

37.09

%

 

 

35.73

%

 

 

35.67

%

 

 

30.45

%

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

 

 

89.23

%

 

 

91.51

%

 

 

91.96

%

 

 

88.62

%

 

 

91.38

%

Deposits to total liabilities

 

 

84.36

%

 

 

85.08

%

 

 

84.36

%

 

 

88.34

%

 

 

85.25

%

Deposits per branch

 

$

109,229

 

 

$

103,305

 

 

$

84,390

 

 

$

86,989

 

 

$

74,366

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

0.83

%

 

 

0.95

%

 

 

0.99

%

 

 

0.92

%

 

 

1.27

%

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

 

 

1.47

%

 

 

1.53

%

 

 

1.40

%

 

 

1.17

%

 

 

1.08

%

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

 

 

0.47

%

 

 

0.47

%

 

 

0.53

%

 

 

0.57

%

 

 

0.48

%

Acquisition accounting adjustments(4)

 

$

10,424

 

 

$

13,389

 

 

$

17,133

 

 

$

19,324

 

 

$

25,889

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity to total assets

 

 

11.61

%

 

 

12.44

%

 

 

12.07

%

 

 

12.05

%

 

 

13.12

%

Tangible common equity to tangible assets(1)

 

 

9.31

%

 

 

10.01

%

 

 

9.64

%

 

 

9.55

%

 

 

10.33

%

Leverage ratio

 

 

10.93

%

 

 

11.12

%

 

 

10.93

%

 

 

10.29

%

 

 

11.18

%

Common equity tier 1 capital ratio

 

 

12.09

%

 

 

12.20

%

 

 

12.55

%

 

 

12.33

%

 

 

12.24

%

Tier 1 capital ratio

 

 

13.20

%

 

 

13.36

%

 

 

13.77

%

 

 

13.56

%

 

 

13.52

%

Total capital ratio

 

 

15.96

%

 

 

16.18

%

 

 

16.67

%

 

 

15.86

%

 

 

14.50

%

(1)

 

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

(2)

 

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

(3)

 

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

(4)

 

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

(5)

 

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

BYLINE BANCORP, INC. AND SUBSIDIARIES

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

 

 

 

For the Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

(dollars in thousands)

 

Average

Balance(5)

 

 

Interest

Inc / Exp

 

 

Average

Yield /

Rate

 

 

Average

Balance(5)

 

 

Interest

Inc / Exp

 

 

Average

Yield /

Rate

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

��

 

Cash and cash equivalents

 

$

55,477

 

 

$

28

 

 

 

0.21

%

 

$

38,934

 

 

$

157

 

 

 

1.63

%

Loans and leases(1)

 

 

4,432,246

 

 

 

53,808

 

 

 

4.92

%

 

 

3,799,213

 

 

 

54,158

 

 

 

5.73

%

Taxable securities

 

 

1,430,625

 

 

 

5,379

 

 

 

1.52

%

 

 

1,175,120

 

 

 

8,316

 

 

 

2.85

%

Tax-exempt securities(2)

 

 

179,364

 

 

 

1,194

 

 

 

2.70

%

 

 

84,679

 

 

 

677

 

 

 

3.22

%

Total interest-earning assets

 

$

6,097,712

 

 

$

60,409

 

 

 

4.02

%

 

$

5,097,946

 

 

$

63,308

 

 

 

4.99

%

Allowance for loan and lease losses

 

 

(66,989

)

 

 

 

 

 

 

 

 

 

 

(33,664

)

 

 

 

 

 

 

 

 

All other assets

 

 

557,042

 

 

 

 

 

 

 

 

 

 

 

501,670

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

6,587,765

 

 

 

 

 

 

 

 

 

 

$

5,565,952

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest checking

 

$

546,730

 

 

$

199

 

 

 

0.15

%

 

$

338,905

 

 

$

260

 

 

 

0.31

%

Money market accounts

 

 

1,124,101

 

 

 

381

 

 

 

0.14

%

 

 

962,205

 

 

 

2,214

 

 

 

0.93

%

Savings

 

 

577,504

 

 

 

67

 

 

 

0.05

%

 

 

480,270

 

 

 

61

 

 

 

0.05

%

Time deposits

 

 

777,266

 

 

 

774

 

 

 

0.40

%

 

 

1,113,596

 

 

 

5,269

 

 

 

1.90

%

Total interest-bearing deposits

 

 

3,025,601

 

 

 

1,421

 

 

 

0.19

%

 

 

2,894,976

 

 

 

7,804

 

 

 

1.08

%

Other borrowings

 

 

649,639

 

 

 

502

 

 

 

0.31

%

 

 

521,108

 

 

 

1,897

 

 

 

1.46

%

Subordinated notes and debentures

 

 

109,859

 

 

 

1,596

 

 

 

5.89

%

 

 

37,385

 

 

 

640

 

 

 

6.88

%

Total borrowings

 

 

759,498

 

 

 

2,098

 

 

 

1.12

%

 

 

558,493

 

 

 

2,537

 

 

 

1.83

%

Total interest-bearing liabilities

 

$

3,785,099

 

 

$

3,519

 

 

 

0.38

%

 

$

3,453,469

 

 

$

10,341

 

 

 

1.20

%

Non-interest-bearing demand deposits

 

 

1,924,178

 

 

 

 

 

 

 

 

 

 

 

1,298,800

 

 

 

 

 

 

 

 

 

Other liabilities

 

 

72,036

 

 

 

 

 

 

 

 

 

 

 

48,256

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

806,452

 

 

 

 

 

 

 

 

 

 

 

765,427

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

6,587,765

 

 

 

 

 

 

 

 

 

 

$

5,565,952

 

 

 

 

 

 

 

 

 

Net interest spread(3)

 

 

 

 

 

 

 

 

 

 

3.64

%

 

 

 

 

 

 

 

 

 

 

3.79

%

Net interest income, fully taxable equivalent

 

 

 

 

 

$

56,890

 

 

 

 

 

 

 

 

 

 

$

52,967

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

3.78

%

 

 

 

 

 

 

 

 

 

 

4.18

%

Tax-equivalent adjustment

 

 

 

 

 

 

(250

)

 

 

0.01

%

 

 

 

 

 

 

(142

)

 

 

0.01

%

Net interest income

 

 

 

 

 

$

56,640

 

 

 

 

 

 

 

 

 

 

$

52,825

 

 

 

 

 

Net interest margin(4)

 

 

 

 

 

 

 

 

 

 

3.77

%

 

 

 

 

 

 

 

 

 

 

4.17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loan accretion impact on margin

 

 

 

 

 

$

1,968

 

 

 

0.13

%

 

 

 

 

 

$

3,671

 

 

 

0.29

%

(1)

 

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

(2)

 

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

(3)

 

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

(4)

 

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

(5)

 

Average balances are average daily balances.

BYLINE BANCORP, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)

 

 

 

As of or For the Three Months Ended

 

(dollars in thousands, except per share data)

 

March 31,

2021

 

 

December 31,

2020

 

 

September 30,

2020

 

 

June 30,

2020

 

 

March 31,

2020

 

Net income and earnings per share

excluding significant items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Net Income

 

$

21,798

 

 

$

12,291

 

 

$

13,071

 

 

$

9,139

 

 

$

2,966

 

Significant items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment charges on assets held for sale

 

 

604

 

 

 

4,022

 

 

 

32

 

 

 

 

 

 

715

 

Tax benefit

 

 

(165

)

 

 

(1,120

)

 

 

(9

)

 

 

 

 

 

(199

)

Adjusted Net Income

 

$

22,237

 

 

$

15,193

 

 

$

13,094

 

 

$

9,139

 

 

$

3,482

 

Reported Diluted Earnings per Share

 

$

0.56

 

 

$

0.31

 

 

$

0.34

 

 

$

0.24

 

 

$

0.07

 

Significant items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment charges on assets held for sale

 

 

0.02

 

 

 

0.10

 

 

 

 

 

 

 

 

 

0.02

 

Tax benefit

 

 

(0.01

)

 

 

(0.03

)

 

 

 

 

 

 

 

 

 

Adjusted Diluted Earnings per Share

 

$

0.57

 

 

$

0.38

 

 

$

0.34

 

 

$

0.24

 

 

$

0.09

 

 

BYLINE BANCORP, INC. AND SUBSIDIARIES

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

 

 

 

As of or For the Three Months Ended

 

(dollars in thousands, except per share data,

ratios annualized, where applicable)

 

March 31,

2021

 

 

December 31,

2020

 

 

September 30,

2020

 

 

June 30,

2020

 

 

March 31,

2020

 

Adjusted non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense

 

$

38,842

 

 

$

47,021

 

 

$

41,687

 

 

$

37,053

 

 

$

43,661

 

Less: Significant items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment charges on assets held for sale

 

 

604

 

 

 

4,022

 

 

 

32

 

 

 

 

 

 

715

 

Adjusted non-interest expense

 

$

38,238

 

 

$

42,999

 

 

$

41,655

 

 

$

37,053

 

 

$

42,946

 

Adjusted non-interest expense excluding

amortization of intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted non-interest expense

 

$

38,238

 

 

$

42,999

 

 

$

41,655

 

 

$

37,053

 

 

$

42,946

 

Less: Amortization of intangible assets

 

 

1,749

 

 

 

1,892

 

 

 

1,947

 

 

 

1,892

 

 

 

1,893

 

Adjusted non-interest expense excluding

amortization of intangible assets

 

$

36,489

 

 

$

41,107

 

 

$

39,708