Skip to main content

Byline Bancorp, Inc. Reports Full Year and Fourth Quarter 2021 Financial Results

Select Full Year 2021 Financial Highlights

  • Net income of $92.8 million, or $2.40 per diluted share
  • Net interest margin of 3.84%
  • Return on average assets of 1.40%
  • Efficiency ratio of 57.27%
  • Originated loans and leases increased $425.9 million, or 11.6%
  • Non-interest-bearing deposits increased $395.7 million, or 22.5%
  • Top SBA lender for Illinois and Wisconsin for the eighth consecutive year
  • Returned $40.3 million capital to common stockholders through dividends and share repurchases

Select Fourth Quarter 2021 Financial Highlights

  • Net income of $17.2 million, or $0.45 per diluted share
  • Total revenue1 of $80.7 million, including $61.7 million net interest income and $19.0 million non-interest income
  • Net interest margin of 3.96%
  • Return on average assets of 1.02%, as adjusted1 1.56%
  • Total loan and lease production of $313.7 million
  • Common Equity Tier 1 to risk weighted assets of 11.39%

Byline Bancorp, Inc. ("Byline", the “Company”, "we", "our", or "us")(NYSE: BY), the parent company of Byline Bank (the “Bank”), today reported net income of $17.2 million, or $0.45 per diluted share, for the fourth quarter of 2021, compared with net income of $25.3 million, or $0.66 per diluted share, for the third quarter of 2021, and net income of $12.3 million, or $0.31 per diluted share, for the fourth quarter 2020. Adjusted net income1 was $26.3 million, or $0.69 per adjusted diluted share, for the fourth quarter of 2021, compared with $26.4 million, or $0.69 per adjusted diluted share1, for the third quarter of 2021, and $15.2 million, or $0.38 per adjusted diluted share, for the fourth quarter of 2020.

Roberto R. Herencia, Executive Chairman and Chief Executive Officer of Byline Bancorp, commented, “A lot has changed in the last year, and our fourth quarter and full year results highlight the value of our diversified business model, which allowed us to deliver strong results for our shareholders. This was an extraordinary year for the Byline franchise that brought both challenges and opportunities. I’m proud of how we came together to support our customers and communities while consistently executing on our strategic plan to drive organic loan and deposit growth resulting in a higher level of profitability. As we look ahead, I’m confident in our ability to create shareholder value as we continue to invest in talent and technology to drive revenue growth and efficiency improvement. We remain well positioned to support our continued growth and I want to thank all our employees for being flexible, for being resilient, and for bringing our core values to life for the benefit of our customers every day.”

Alberto J. Paracchini, President of Byline Bancorp, added, “We ended 2021 on a good note as our fourth quarter results were supported by continued strong inflows of commercial non-interest bearing deposits and annualized loan and lease growth of 6.6%, excluding PPP loans. During the quarter we announced the consolidation of six branch locations and the disposition of real estate in efforts to adapt to changes in customer behavior and improve operating efficiencies. During 2021, we returned $40.3 million of capital to shareholders through common dividends and share repurchases. As we moved through the year, we saw a favorable shift in our mix of earning assets and produced record earnings for the company. As we enter this new year in a strong position, we believe we continue to have a healthy loan pipeline and our focus remains on supporting new and existing customers, executing our strategy, and growing the value of our franchise.”

Board Approves Redemption of Series B Preferred Stock

On January 25, 2022, the Company's Board of Directors approved the redemption of all of the outstanding shares of the Company’s 7.50% fixed-to-floating, noncumulative perpetual preferred stock, Series B ("Series B Preferred Stock"), on March 31, 2022. The Company currently has 10,438 shares of Series B Preferred Stock, with a liquidation of preference of $1,000 per share, plus any declared and unpaid dividends from any prior dividend period.

Board Declares Cash Dividend of $0.09 per Share

On January 25, 2022, the Company's Board of Directors declared a cash dividend of $0.09 per share, payable on February 22, 2022, to stockholders of record of the Company's common stock as of February 8, 2022.

Consolidation of Six Branches and Disposal of Real Estate

On December 10, 2021 Byline announced plans to continue to optimize its branch network, dispose of a portfolio of owned real estate properties and reduce the amount of office square footage it occupies as part of its efforts to adapt to changes in customer behavior and improve operating efficiencies. Byline Bank plans to consolidate six of its 44 full-service branches during the second quarter of 2022. The Company also plans to dispose of a real estate portfolio that includes former branch locations and other properties and reduce the amount of office square footage it occupies to accommodate current trends in remote working preferences. The impact of the branch consolidations and the strategic real estate reduction is expected to result in total charges of approximately $15.0 million, of which $13.0 million were incurred during the fourth quarter 2021, with the remainder to be incurred during the first half of 2022, and expects to generate approximately $5.3 million in annualized cost savings. We expect to reinvest approximately 70% of the anticipated annualized cost savings into talent and technology that will further enhance our digital banking capabilities.

(1)

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

STATEMENTS OF OPERATIONS

Net Interest Income

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

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

 

Three Months Ended

 

 

Change from

 

 

December 31,

 

September 30,

 

December 31,

 

 

September 30,

 

December 31,

(dollars in thousands)

 

2021

 

2021

 

2020

 

 

2021

 

2020

INTEREST AND DIVIDEND INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans and leases

 

$

58,570

 

 

$

56,291

 

 

$

53,441

 

 

 

4.0

%

 

 

9.6

%

Interest on securities

 

 

5,619

 

 

 

5,534

 

 

 

6,252

 

 

 

1.5

%

 

 

(10.1

)%

Other interest and dividend income

 

 

495

 

 

 

947

 

 

 

232

 

 

 

(47.8

)%

 

 

113.2

%

Total interest and dividend income

 

 

64,684

 

 

 

62,772

 

 

 

59,925

 

 

 

3.0

%

 

 

7.9

%

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

1,037

 

 

 

986

 

 

 

1,814

 

 

 

5.2

%

 

 

(42.8

)%

Other borrowings

 

 

330

 

 

 

349

 

 

 

480

 

 

 

(5.8

)%

 

 

(31.4

)%

Subordinated notes and debentures

 

 

1,589

 

 

 

1,592

 

 

 

1,611

 

 

 

(0.2

)%

 

 

(1.4

)%

Total interest expense

 

 

2,956

 

 

 

2,927

 

 

 

3,905

 

 

 

1.0

%

 

 

(24.3

)%

Net interest income

 

$

61,728

 

 

$

59,845

 

 

$

56,020

 

 

 

3.1

%

 

 

10.2

%

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

 

 

 

December 31, 2021

 

September 30, 2021

(dollars in thousands)

 

Average

Balance(5)

 

Interest

Inc / Exp

 

Average

Yield /

Rate

 

Average

Balance(5)

 

Interest

Inc / Exp

 

Average

Yield /

Rate

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

106,170

 

 

$

42

 

 

 

0.16

%

 

$

40,088

 

 

$

19

 

 

 

0.19

%

Loans and leases(1)

 

 

4,610,608

 

 

 

58,570

 

 

 

5.04

%

 

 

4,539,111

 

 

 

56,291

 

 

 

4.92

%

Taxable securities

 

 

1,288,969

 

 

 

5,111

 

 

 

1.57

%

 

 

1,309,802

 

 

 

5,472

 

 

 

1.66

%

Tax-exempt securities(2)

 

 

184,015

 

 

 

1,217

 

 

 

2.62

%

 

 

187,064

 

 

 

1,254

 

 

 

2.66

%

Total interest-earning assets

 

$

6,189,762

 

 

$

64,940

 

 

 

4.16

%

 

$

6,076,065

 

 

$

63,036

 

 

 

4.12

%

Allowance for loan and lease losses

 

 

(59,144

)

 

 

 

 

 

 

 

 

(61,528

)

 

 

 

 

 

 

All other assets

 

 

568,451

 

 

 

 

 

 

 

 

 

546,331

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

6,699,069

 

 

 

 

 

 

 

 

$

6,560,868

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest checking

 

$

659,841

 

 

$

236

 

 

 

0.14

%

 

$

653,543

 

 

$

228

 

 

 

0.14

%

Money market accounts

 

 

1,089,398

 

 

 

345

 

 

 

0.13

%

 

 

1,031,009

 

 

 

280

 

 

 

0.11

%

Savings

 

 

633,469

 

 

 

75

 

 

 

0.05

%

 

 

625,037

 

 

 

75

 

 

 

0.05

%

Time deposits

 

 

688,154

 

 

 

381

 

 

 

0.22

%

 

 

709,805

 

 

 

403

 

 

 

0.23

%

Total interest-bearing deposits

 

 

3,070,862

 

 

 

1,037

 

 

 

0.13

%

 

 

3,019,394

 

 

 

986

 

 

 

0.13

%

Other borrowings

 

 

385,787

 

 

 

330

 

 

 

0.34

%

 

 

426,284

 

 

 

349

 

 

 

0.33

%

Subordinated notes and debentures

 

 

110,341

 

 

 

1,589

 

 

 

5.71

%

 

 

110,195

 

 

 

1,592

 

 

 

5.73

%

Total borrowings

 

 

496,128

 

 

 

1,919

 

 

 

1.53

%

 

 

536,479

 

 

 

1,941

 

 

 

1.44

%

Total interest-bearing liabilities

 

$

3,566,990

 

 

$

2,956

 

 

 

0.33

%

 

$

3,555,873

 

 

$

2,927

 

 

 

0.33

%

Non-interest-bearing demand deposits

 

 

2,222,583

 

 

 

 

 

 

 

 

 

2,106,189

 

 

 

 

 

 

 

Other liabilities

 

 

70,521

 

 

 

 

 

 

 

 

 

75,052

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

838,975

 

 

 

 

 

 

 

 

 

823,754

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

6,699,069

 

 

 

 

 

 

 

 

$

6,560,868

 

 

 

 

 

 

 

Net interest spread(3)

 

 

 

 

 

 

 

 

3.83

%

 

 

 

 

 

 

 

 

3.79

%

Net interest income, fully taxable equivalent

 

 

 

 

$

61,984

 

 

 

 

 

 

 

 

$

60,109

 

 

 

 

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

 

 

 

 

 

 

 

 

3.97

%

 

 

 

 

 

 

 

 

3.92

%

Tax-equivalent adjustment

 

 

 

 

 

(256

)

 

 

0.01

%

 

 

 

 

 

(264

)

 

 

0.01

%

Net interest income

 

 

 

 

$

61,728

 

 

 

 

 

 

 

 

$

59,845

 

 

 

 

Net interest margin(4)

 

 

 

 

 

 

 

 

3.96

%

 

 

 

 

 

 

 

 

3.91

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loan accretion impact on margin

 

 

 

 

$

1,450

 

 

 

0.09

%

 

 

 

 

$

1,638

 

 

 

0.11

%

(1)

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

(2)

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

(3)

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

(4)

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

(5)

Average balances are average daily balances.

Net interest income for the fourth quarter of 2021 was $61.7 million, an increase of $1.9 million, or 3.1%, from the third quarter of 2021.

The increase in net interest income was primarily due to:

  • An increase of $2.3 million in interest income on loans and leases, due to higher balances and yields on loans and leases.

Partially offset by:

  • A decrease of $452,000 in other interest and dividend income due to lower dividends on equity investments.

Tax-equivalent net interest margin for the fourth quarter of 2021 was 3.97%, an increase of five basis points compared to the third quarter of 2021. Total net accretion income on acquired loans contributed nine basis points to the net interest margin for the fourth quarter of 2021 compared to 11 basis points for the third quarter of 2021, a decrease of two basis points. PPP loan interest income and net fee income combined contributed $4.5 million to net interest income for the fourth quarter of 2021 compared to $5.4 million for the third quarter of 2021.

The average cost of total deposits was 0.08% for the fourth quarter of 2021, flat compared to the third quarter of 2021. Average non-interest-bearing demand deposits increased $116.4 million, while average money market account deposits increased by $58.4 million. Average non-interest-bearing demand deposits were 42.0% of average total deposits for the fourth quarter of 2021 compared to 41.1% during the third quarter of 2021.

Provision for Loan and Lease Losses

The provision for loan and lease losses was a recapture of $1.3 million for the fourth quarter of 2021, a decrease of $1.6 million compared to a provision of $352,000 for the third quarter of 2021. The recapture of provision during the fourth quarter of 2021 was mainly driven by a decrease in non-performing loans and leases, and changes in qualitative factors due to continuing economic improvement.

Non-interest Income

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

 

 

Three Months Ended

 

 

December 31, 2021

Change from

 

 

December 31,

 

September 30,

 

December 31,

 

September 30,

 

December 31,

(dollars in thousands)

 

2021

 

2021

 

2020

 

2021

 

2020

NON-INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges on deposits

 

$

1,955

 

 

$

1,867

 

 

$

1,740

 

 

 

4.7

%

 

 

12.4

%

Loan servicing revenue

 

 

3,392

 

 

 

3,344

 

 

 

2,645

 

 

 

1.4

%

 

 

28.2

%

Loan servicing asset revaluation

 

 

(2,510

)

 

 

(2,650

)

 

 

(2,298

)

 

 

(5.3

)%

 

 

9.2

%

ATM and interchange fees

 

 

1,219

 

 

 

1,201

 

 

 

1,076

 

 

 

1.6

%

 

 

13.3

%

Net realized gains (losses) on securities available-for-sale

 

 

(21

)

 

 

130

 

 

 

2,889

 

 

NM

 

 

NM

 

Change in fair value of equity securities, net

 

 

(98

)

 

 

(275

)

 

 

428

 

 

 

(64.6

)%

 

NM

 

Net gains on sales of loans

 

 

12,924

 

 

 

12,761

 

 

 

9,449

 

 

 

1.3

%

 

 

36.8

%

Wealth management and trust income

 

 

764

 

 

 

815

 

 

 

710

 

 

 

(6.4

)%

 

 

7.5

%

Other non-interest income

 

 

1,389

 

 

 

1,302

 

 

 

1,051

 

 

 

6.7

%

 

 

32.1

%

Total non-interest income

 

$

19,014

 

 

$

18,495

 

 

$

17,690

 

 

 

2.8

%

 

 

7.5

%

Non-interest income for the fourth quarter of 2021 was $19.0 million, an increase of $519,000, or 2.8%, compared to $18.5 million for the third quarter of 2021.

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

  • An increase of $178,000 in the fair value of equity securities, net, due to changes in the market value of securities; and
  • An increase of $162,000 in net gains on sales of loans due to higher volume of loans sold.

Partially offset by:

  • A decrease in net realized losses on securities available-for-sale of $152,000 due to sales of securities.

During the fourth quarter of 2021, we sold $113.9 million of U.S. government guaranteed loans compared to $104.2 million during the third quarter of 2021.

Non-interest Expense

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

 

 

Three Months Ended

 

December 31, 2021

Change from

 

 

December 31,

 

September 30,

 

December 31,

 

September 30,

 

December 31,

(dollars in thousands)

 

2021

 

2021

 

2020

 

2021

 

2020

NON-INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

$

28,850

 

 

$

25,978

 

 

$

22,559

 

 

 

11.1

%

 

 

27.9

%

Occupancy and equipment expense, net

 

 

4,995

 

 

 

4,982

 

 

 

6,854

 

 

 

0.3

%

 

 

(27.1

)%

Loan and lease related expenses

 

 

2,328

 

 

 

1,175

 

 

 

1,324

 

 

 

98.1

%

 

 

75.8

%

Legal, audit and other professional fees

 

 

2,376

 

 

 

2,710

 

 

 

1,336

 

 

 

(12.4

)%

 

 

77.8

%

Data processing

 

 

3,070

 

 

 

3,108

 

 

 

2,748

 

 

 

(1.2

)%

 

 

11.7

%

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

 

 

26

 

 

 

42

 

 

 

495

 

 

 

(39.1

)%

 

 

(94.8

)%

Other intangible assets amortization expense

 

 

1,738

 

 

 

1,738

 

 

 

1,892

 

 

 

 

 

 

(8.2

)%

Other non-interest expense

 

 

15,585

 

 

 

4,447

 

 

 

9,813

 

 

 

250.6

%

 

 

58.8

%

Total non-interest expense

 

$

58,968

 

 

$

44,180

 

 

$

47,021

 

 

 

33.5

%

 

 

25.4

%

Non-interest expense for the fourth quarter of 2021 was $59.0 million, an increase of $14.8 million, or 33.5%, from $44.2 million for the third quarter of 2021.

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

  • An increase of $11.1 million in other non-interest expense mainly due to $8.4 million of impairment charges on assets held for sale and $4.1 million on branch consolidation charges; and
  • An increase of $2.9 million in salaries and employee benefits mainly related to increases in salary expense of $499,000 with new additional hires, increase of $1.5 million in commissions and incentive expense, and $573,000 related to branch consolidation charges; and
  • An increase of $1.2 million in loan and lease related expenses mainly related to higher expenses associated with originations of government guaranteed loans.

Our efficiency ratio was 70.88% for the fourth quarter of 2021 compared to 54.18% for the third quarter of 2021. Excluding asset impairment charges, our adjusted efficiency ratio1 was 55.46% for the fourth quarter of 2021, compared with 52.35% for the third quarter of 2021.

(1)

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

INCOME TAXES

We recorded income tax expense of $5.9 million during the fourth quarter of 2021, compared to $8.5 million during the third quarter of 2021. The effective tax rate was 25.5% and 25.1% for the fourth quarter and third quarter of 2021, respectively.

STATEMENTS OF FINANCIAL CONDITION

Total assets were $6.7 billion at December 31, 2021, a decrease of $8.3 million compared to $6.7 billion at September 30, 2021.

The current quarter decrease was primarily due to:

  • A decrease in net loans and leases of $66.5 million due to PPP forgiveness.

Partially offset by:

  • An increase in securities available for sale of $26.9 million due to purchases of securities.

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

 

 

December 31, 2021

 

September 30, 2021

 

December 31, 2020

(dollars in thousands)

 

Amount

 

% of Total

 

Amount

 

% of Total

 

Amount

 

% of Total

Originated loans and leases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

1,379,000

 

 

 

30.4

%

 

$

1,298,454

 

 

 

28.2

%

 

$

1,017,587

 

 

 

23.5

%

Residential real estate

 

 

379,796

 

 

 

8.4

%

 

 

387,578

 

 

 

8.4

%

 

 

414,220

 

 

 

9.6

%

Construction, land development, and other land

 

 

323,886

 

 

 

7.1

%

 

 

336,460

 

 

 

7.3

%

 

 

226,408

 

 

 

5.2

%

Commercial and industrial

 

 

1,534,745

 

 

 

33.8

%

 

 

1,480,076

 

 

 

32.1

%

 

 

1,276,527

 

 

 

29.4

%

Paycheck Protection Program

 

 

123,712

 

 

 

2.7

%

 

 

268,081

 

 

 

5.8

%

 

 

517,815

 

 

 

11.9

%

Installment and other

 

 

940

 

 

 

0.0

%

 

 

998

 

 

 

0.0

%

 

 

1,267

 

 

 

0.0

%

Leasing financing receivables

 

 

352,247

 

 

 

7.8

%

 

 

331,149

 

 

 

7.2

%

 

 

214,636

 

 

 

4.9

%

Total originated loans and leases

 

$

4,094,326

 

 

 

90.2

%

 

$

4,102,796

 

 

 

89.0

%

 

$

3,668,460

 

 

 

84.5

%

Acquired impaired loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

72,160

 

 

 

1.6

%

 

$

84,821

 

 

 

1.8

%

 

$

108,484

 

 

 

2.5

%

Residential real estate

 

 

49,401

 

 

 

1.1

%

 

 

61,893

 

 

 

1.3

%

 

 

78,840

 

 

 

1.9

%

Construction, land development, and other land

 

 

1,312

 

 

 

0.0

%

 

 

1,746

 

 

 

0.1

%

 

 

4,113

 

 

 

0.1

%

Commercial and industrial

 

 

4,014

 

 

 

0.1

%

 

 

6,651

 

 

 

0.1

%

 

 

10,178

 

 

 

0.2

%

Installment and other

 

 

164

 

 

 

0.0

%

 

 

169

 

 

 

0.0

%

 

 

202

 

 

 

0.0

%

Total acquired impaired loans

 

$

127,051

 

 

 

2.8

%

 

$

155,280

 

 

 

3.3

%

 

$

201,817

 

 

 

4.7

%

Acquired non-impaired loans and leases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

214,588

 

 

 

4.7

%

 

$

235,103

 

 

 

5.1

%

 

$

295,599

 

 

 

6.8

%

Residential real estate

 

 

51,317

 

 

 

1.1

%

 

 

58,283

 

 

 

1.3

%

 

 

79,211

 

 

 

1.8

%

Construction, land development, and other land

 

 

201

 

 

 

0.1

%

 

 

206

 

 

 

0.0

%

 

 

212

 

 

 

0.0

%

Commercial and industrial

 

 

43,202

 

 

 

1.0

%

 

 

49,678

 

 

 

1.1

%

 

 

82,195

 

 

 

1.9

%

Installment and other

 

 

264

 

 

 

0.0

%

 

 

275

 

 

 

0.0

%

 

 

536

 

 

 

0.0

%

Leasing financing receivables

 

 

6,179

 

 

 

0.1

%

 

 

7,607

 

 

 

0.2

%

 

 

12,505

 

 

 

0.3

%

Total acquired non-impaired loans and leases

 

$

315,751

 

 

 

7.0

%

 

$

351,152

 

 

 

7.7

%

 

$

470,258

 

 

 

10.8

%

Total loans and leases

 

$

4,537,128

 

 

 

100.0

%

 

$

4,609,228

 

 

 

100.0

%

 

$

4,340,535

 

 

 

100.0

%

Allowance for loan and lease losses

 

 

(55,012

)

 

 

 

 

 

(60,598

)

 

 

 

 

 

(66,347

)

 

 

 

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

 

$

4,482,116

 

 

 

 

 

$

4,548,630

 

 

 

 

 

$

4,274,188

 

 

 

 

Paycheck Protection Program

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

 

 

PPP Loans Outstanding

(dollars in thousands)

 

First Round

 

Second Round

 

Total

Principal outstanding

 

$

3,637

 

 

$

123,547

 

 

$

127,184

 

Unearned processing fee

 

 

(46

)

 

 

(4,303

)

 

 

(4,349

)

Deferred cost

 

 

11

 

 

 

866

 

 

 

877

 

PPP loans, net

 

$

3,602

 

 

$

120,110

 

 

$

123,712

 

Number of loans outstanding

 

 

62

 

 

 

710

 

 

 

772

 

 

 

 

 

 

 

 

 

 

 

Forgiven

 

 

97.1

%

 

 

67.5

%

 

 

87.0

%

In review or submission process

 

 

0.3

%

 

 

7.7

%

 

 

2.8

%

Not applied for forgiveness

 

 

2.6

%

 

 

24.8

%

 

 

10.2

%

PPP loans decreased by $144.4 million in the fourth quarter of 2021 primarily as a result of forgiveness of PPP loans. Forgiveness for the fourth quarter 2021 was $160.3 million compared to $202.4 million for the third quarter of 2021.

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:

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

Change from

(dollars in thousands)

 

December 31,

2021

 

September 30,

2021

 

December 31,

2020

 

September 30,

2021

 

December 31,

2020

Non-performing assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans and leases

 

$

23,130

 

 

$

34,465

 

 

$

41,103

 

 

 

(32.9

)%

 

 

(43.7

)%

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

 

 

 

 

 

 

 

 

 

 

—%

 

 

—%

 

Total non-performing loans and leases

 

$

23,130

 

 

$

34,465

 

 

$

41,103

 

 

 

(32.9

)%

 

 

(43.7

)%

Other real estate owned

 

 

2,112

 

 

 

3,033

 

 

 

6,350

 

 

 

(30.4

)%

 

 

(66.7

)%

Total non-performing assets

 

$

25,242

 

 

$

37,498

 

 

$

47,453

 

 

 

(32.7

)%

 

 

(46.8

)%

Accruing troubled debt restructured loans (1)

 

$

1,927

 

 

$

2,366

 

 

$

2,495

 

 

 

(18.5

)%

 

 

(22.8

)%

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

 

 

0.51

%

 

 

0.75

%

 

 

0.95

%

 

 

 

 

 

 

Total non-performing assets as a percentage of total assets

 

 

0.38

%

 

 

0.56

%

 

 

0.74

%

 

 

 

 

 

 

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

 

 

237.84

%

 

 

175.82

%

 

 

161.42

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans guaranteed

 

$

3,270

 

 

$

6,326

 

 

$

3,645

 

 

 

(48.3

)%

 

 

(10.3

)%

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

 

 

 

 

 

 

 

 

 

 

—%

 

 

—%

 

Total non-performing loans guaranteed

 

$

3,270

 

 

$

6,326

 

 

$

3,645

 

 

 

(48.3

)%

 

 

(10.3

)%

Accruing troubled debt restructured loans guaranteed (1)

 

$

 

 

$

 

 

$

 

 

—%

 

 

—%

 

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

 

 

0.44

%

 

 

0.61

%

 

 

0.86

%

 

 

 

 

 

 

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

 

 

0.33

%

 

 

0.46

%

 

 

0.69

%

 

 

 

 

 

 

(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 $23.1 million at December 31, 2021, a decrease of $11.3 million from $34.5 million at September 30, 2021 primarily due to payoffs and resolutions; and
  • Other real estate owned was $2.1 million at December 31, 2021, a decrease of $921,000 from $3.0 million at September 30, 2021 due to sales.

Allowance for Loan and Lease Losses

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

 

 

Three Months Ended

 

 

December 31,

 

September 30,

 

December 31,

(dollars in thousands)

 

2021

 

2021

 

2020

Allowance for loan and lease losses, beginning of period

 

$

60,598

 

 

$

61,719

 

 

$

61,258

 

Provision/(recapture) for loan and lease losses

 

 

(1,293

)

 

 

352

 

 

 

10,236

 

Net charge-offs of loans and leases

 

 

(4,293

)

 

 

(1,473

)

 

 

(5,147

)

Allowance for loan and lease losses, end of period

 

$

55,012

 

 

$

60,598

 

 

$

66,347

 

 

 

 

 

 

 

 

 

 

 

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

 

 

1.21

%

 

 

1.31

%

 

 

1.53

%

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

 

 

0.37

%

 

 

0.13

%

 

 

0.47

%

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

 

(0.30)

x

 

 

0.24

x

 

 

1.99

x

The allowance for loan and lease losses as a percentage of total loans and leases held for investment decreased to 1.21% at December 31, 2021 compared to 1.31% at September 30, 2021. The allowance for loan and lease losses as a percentage of total loans and leases held for investment excluding PPP loans decreased to 1.25% at December 31, 2021 from 1.40% at September 30, 2021.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance on the recognition of credit losses, otherwise known as "CECL", which replaces the incurred loss impairment methodology with a methodology that reflects current expected credit losses. In November 2019, the FASB delayed the effective date of the standard for smaller reporting companies, which includes emerging growth companies. Assuming we remain an emerging growth company, the Company anticipates adopting the standard on December 31, 2022. We are in the process of implementation and determining the impact that this new authoritative guidance will have on our consolidated financial statements.

Net Charge-Offs

Net charge-offs during the fourth quarter of 2021 were $4.3 million, or 0.37% of average loans and leases, on an annualized basis, an increase of $2.8 million compared to $1.5 million, or 0.13% of average loans and leases, during the third quarter of 2021, and a decrease of $854,000 from $5.1 million or 0.47% of average loans and leases from the comparable period a year ago.

Net charge-offs for the fourth quarter of 2021 included $1.5 million in the unguaranteed portion of U.S. government guaranteed loans, while net charge-offs for the third quarter of 2021 and fourth quarter of 2020 included $1.3 million and $5.0 million, respectively, in the unguaranteed portion of U.S. government guaranteed loans.

Deposits and Other Liabilities

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

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

Change from

(dollars in thousands)

 

December 31,

2021

 

September 30,

2021

 

December 31,

2020

 

September 30,

2021

 

December 31,

2020

Non-interest-bearing demand deposits

 

$

2,158,420

 

 

$

2,117,749

 

 

$

1,762,676

 

 

 

1.9

%

 

 

22.5

%

Interest-bearing checking accounts

 

 

572,426

 

 

 

652,824

 

 

 

494,424

 

 

 

(12.3

)%

 

 

15.8

%

Money market demand accounts

 

 

1,106,272

 

 

 

1,057,419

 

 

 

1,142,709

 

 

 

4.6

%

 

 

(3.2

)%

Other savings

 

 

638,218

 

 

 

627,294

 

 

 

564,700

 

 

 

1.7

%

 

 

13.0

%

Time deposits (below $250,000)

 

 

532,589

 

 

 

553,364

 

 

 

600,810

 

 

 

(3.8

)%

 

 

(11.4

)%

Time deposits ($250,000 and above)

 

 

147,122

 

 

 

149,628

 

 

 

186,712

 

 

 

(1.7

)%

 

 

(21.2

)%

Total deposits

 

$

5,155,047

 

 

$

5,158,278

 

 

$

4,752,031

 

 

 

(0.1

)%

 

 

8.5

%

Total deposits remained at $5.2 billion at December 31, 2021 compared to September 30, 2021. Non-interest-bearing deposits were 41.9% and 41.1% of total deposits at December 31, 2021 and September 30, 2021, respectively.

The decrease in the current quarter was primarily due to:

  • A decrease in interest bearing checking deposits of $80.4 million primarily due to decreases in public funds deposits.

Partially offset by:

  • An increase in non-interest-bearing deposits of $40.7 million, due to increases in consumer deposits; and
  • An increase in money market demand accounts of $48.9 million, principally driven by business accounts.

Total borrowings and other liabilities were $704.7 million at December 31, 2021, a decrease of $17.1 million from $721.8 million at September 30, 2021, primarily driven by the repayment of the Paycheck Protection Program Liquidity Facility of $156.4 million, offset by increases in Federal Home Loan Bank advances of $135.0 million.

Stockholders’ Equity

Total stockholders’ equity was $836.4 million at December 31, 2021, an increase of $12.0 million from $824.4 million at September 30, 2021. The increase was primarily due to an increase in retained earnings, offset by a decrease in the fair value of available-for-sale securities.

Under its stock repurchase program, the Company repurchased an aggregate 1,331,708 shares at an average price of $21.68 during 2021. The Company did not repurchase any shares during the fourth quarter.

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

 

 

Actual

 

Minimum Capital

Required

 

Required to be

Considered

Well Capitalized

December 31, 2021

 

Amount

 

Ratio

 

Amount

 

Ratio

 

Amount

 

Ratio

Total capital to risk weighted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

830,262

 

 

 

14.70

%

 

$

451,903

 

 

 

8.00

%

 

N/A

 

 

N/A

 

Bank

 

 

753,480

 

 

 

13.38

%

 

 

450,470

 

 

 

8.00

%

 

$

563,087

 

 

 

10.00

%

Tier 1 capital to risk weighted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

698,846

 

 

 

12.37

%

 

$

338,927

 

 

 

6.00

%

 

N/A

 

 

N/A

 

Bank

 

$

697,064

 

 

 

12.38

%

 

 

337,852

 

 

 

6.00

%

 

$

450,470

 

 

 

8.00

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

643,408

 

 

 

11.39

%

 

$

254,195

 

 

 

4.50

%

 

N/A

 

 

N/A

 

Bank

 

 

697,064

 

 

 

12.38

%

 

 

253,389

 

 

 

4.50

%

 

$

366,007

 

 

 

6.50

%

Tier 1 capital to average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

698,846

 

 

 

10.89

%

 

$

256,657

 

 

 

4.00

%

 

N/A

 

 

N/A

 

Bank

 

 

697,064

 

 

 

10.87

%

 

 

256,478

 

 

 

4.00

%

 

$

320,597

 

 

 

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, January 28, 2022 to discuss our quarterly financial results. Analysts and investors may participate in the question-and-answer session. The call can be accessed via telephone at (844) 200-6205; passcode 337883. A recorded replay can be accessed through February 11, 2022 by dialing (866) 813-9403; passcode: 531731.

A slide presentation relating to our fourth 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.

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)

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

(dollars in thousands)

 

2021

 

2021

 

2021

 

2021

 

2020

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

35,247

 

 

$

46,900

 

 

$

50,558

 

 

$

47,101

 

 

$

41,432

 

Interest bearing deposits with other banks

 

 

122,684

 

 

 

95,978

 

 

 

52,138

 

 

 

66,038

 

 

 

41,988

 

Cash and cash equivalents

 

 

157,931

 

 

 

142,878

 

 

 

102,696

 

 

 

113,139

 

 

 

83,420

 

Equity and other securities, at fair value

 

 

10,578

 

 

 

10,299

 

 

 

10,575

 

 

 

8,557

 

 

 

8,764

 

Securities available-for-sale, at fair value

 

 

1,454,542

 

 

 

1,427,605

 

 

 

1,495,789

 

 

 

1,675,907

 

 

 

1,447,230

 

Securities held-to-maturity, at amortized cost

 

 

3,885

 

 

 

3,887

 

 

 

3,890

 

 

 

3,892

 

 

 

4,395

 

Restricted stock, at cost

 

 

22,002

 

 

 

15,927

 

 

 

11,927

 

 

 

19,057

 

 

 

10,507

 

Loans held for sale

 

 

64,460

 

 

 

48,372

 

 

 

25,046

 

 

 

28,584

 

 

 

7,924

 

Loans and leases:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans and leases

 

 

4,537,128

 

 

 

4,609,228

 

 

 

4,469,457

 

 

 

4,454,620

 

 

 

4,340,535

 

Allowance for loan and lease losses

 

 

(55,012

)

 

 

(60,598

)

 

 

(61,719

)

 

 

(65,590

)

 

 

(66,347

)

Net loans and leases

 

 

4,482,116

 

 

 

4,548,630

 

 

 

4,407,738

 

 

 

4,389,030

 

 

 

4,274,188

 

Servicing assets, at fair value

 

 

23,744

 

 

 

23,597

 

 

 

24,683

 

 

 

22,140

 

 

 

22,042

 

Premises and equipment, net

 

 

62,548

 

 

 

76,995

 

 

 

80,482

 

 

 

85,182

 

 

 

86,728

 

Other real estate owned, net

 

 

2,112

 

 

 

3,033

 

 

 

4,417

 

 

 

5,952

 

 

 

6,350

 

Goodwill and other intangible assets, net

 

 

165,558

 

 

 

167,296

 

 

 

169,034

 

 

 

170,882

 

 

 

172,631

 

Bank-owned life insurance

 

 

80,039

 

 

 

60,992

 

 

 

60,628

 

 

 

60,258

 

 

 

10,009

 

Deferred tax assets, net

 

 

50,329

 

 

 

45,165

 

 

 

43,127

 

 

 

48,662

 

 

 

40,181

 

Accrued interest receivable and other assets

 

 

116,328

 

 

 

129,775

 

 

 

100,570

 

 

 

118,883

 

 

 

216,283

 

Total assets

 

$

6,696,172

 

 

$

6,704,451

 

 

$

6,540,602

 

 

$

6,750,125

 

 

$

6,390,652

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing demand deposits

 

$

2,158,420

 

 

$

2,117,749

 

 

$

2,089,455

 

 

$

2,015,643

 

 

$

1,762,676

 

Interest-bearing deposits

 

 

2,996,627

 

 

 

3,040,529

 

 

 

3,002,740

 

 

 

3,008,897

 

 

 

2,989,355

 

Total deposits

 

 

5,155,047

 

 

 

5,158,278

 

 

 

5,092,195

 

 

 

5,024,540

 

 

 

4,752,031

 

Other borrowings

 

 

519,723

 

 

 

539,119

 

 

 

446,836

 

 

 

749,719

 

 

 

647,901

 

Subordinated notes, net

 

 

73,517

 

 

 

73,473

 

 

 

73,429

 

 

 

73,386

 

 

 

73,342

 

Junior subordinated debentures issued to capital trusts, net

 

 

36,906

 

 

 

36,796

 

 

 

36,682

 

 

 

36,565

 

 

 

36,451

 

Accrued expenses and other liabilities

 

 

74,597

 

 

 

72,367

 

 

 

74,387

 

 

 

72,120

 

 

 

75,463

 

Total liabilities

 

 

5,859,790

 

 

 

5,880,033

 

 

 

5,723,529

 

 

 

5,956,330

 

 

 

5,585,188

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

 

 

10,438

 

Common stock

 

 

387

 

 

 

386

 

 

 

385

 

 

 

385

 

 

 

384

 

Additional paid-in capital

 

 

593,753

 

 

 

592,192

 

 

 

590,422

 

 

 

589,209

 

 

 

587,165

 

Retained earnings

 

 

271,676

 

 

 

258,077

 

 

 

236,363

 

 

 

210,385

 

 

 

191,098

 

Treasury stock

 

 

(31,570

)

 

 

(31,161

)

 

 

(20,712

)

 

 

(8,275

)

 

 

(1,668

)

Accumulated other comprehensive income (loss), net of tax

 

 

(8,302

)

 

 

(5,514

)

 

 

177

 

 

 

(8,347

)

 

 

18,047

 

Total stockholders’ equity

 

 

836,382

 

 

 

824,418

 

 

 

817,073

 

 

 

793,795

 

 

 

805,464

 

Total liabilities and stockholders equity

 

$

6,696,172

 

$

6,704,451

 

$

6,540,602

 

$

6,750,125

 

$

6,390,652

 

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

 

 

Three Months Ended

 

Year Ended

(dollars in thousands, except per share data)

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

December 31,

 

December 31,

 

2021

 

2021

 

2021

 

2021

 

2020

 

2021

 

2020

INTEREST AND DIVIDEND INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans and leases

$

58,570

 

 

$

56,291

 

 

$

54,324

 

 

$

53,808

 

 

$

53,441

 

 

$

222,993

 

 

$

208,788

 

Interest on securities

 

5,619

 

 

 

5,534

 

 

 

6,359

 

 

 

6,089

 

 

 

6,252

 

 

 

23,601

 

 

 

28,868

 

Other interest and dividend income

 

495

 

 

 

947

 

 

 

628

 

 

 

262

 

 

 

232

 

 

 

2,332

 

 

 

1,574

 

Total interest and dividend income

 

64,684

 

 

 

62,772

 

 

 

61,311

 

 

 

60,159

 

 

 

59,925

 

 

 

248,926

 

 

 

239,230

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

1,037

 

 

 

986

 

 

 

1,058

 

 

 

1,421

 

 

 

1,814

 

 

 

4,502

 

 

 

16,624

 

Other borrowings

 

330

 

 

 

349

 

 

 

482

 

 

 

502

 

 

 

480

 

 

 

1,663

 

 

 

3,318

 

Subordinated notes and debentures

 

1,589

 

 

 

1,592

 

 

 

1,597

 

 

 

1,596

 

 

 

1,611

 

 

 

6,374

 

 

 

4,310

 

Total interest expense

 

2,956

 

 

 

2,927

 

 

 

3,137

 

 

 

3,519

 

 

 

3,905

 

 

 

12,539

 

 

 

24,252

 

Net interest income

 

61,728

 

 

 

59,845

 

 

 

58,174

 

 

 

56,640

 

 

 

56,020

 

 

 

236,387

 

 

 

214,978

 

PROVISION/(RECAPTURE) FOR LOAN AND LEASE LOSSES

 

(1,293

)

 

 

352

 

 

 

(1,969

)

 

 

4,367

 

 

 

10,236

 

 

 

1,457

 

 

 

55,949

 

Net interest income after provision/(recapture) for loan and lease losses

 

63,021

 

 

 

59,493

 

 

 

60,143

 

 

 

52,273

 

 

 

45,784

 

 

 

234,930

 

 

 

159,029

 

NON-INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges on deposits

 

1,955

 

 

 

1,867

 

 

 

1,768

 

 

 

1,664

 

 

 

1,740

 

 

 

7,254

 

 

 

6,471

 

Loan servicing revenue

 

3,392

 

 

 

3,344

 

 

 

3,188

 

 

 

2,769

 

 

 

2,645

 

 

 

12,693

 

 

 

11,319

 

Loan servicing asset revaluation

 

(2,510

)

 

 

(2,650

)

 

 

7

 

 

 

(1,505

)

 

 

(2,298

)

 

 

(6,658

)

 

 

(4,951

)

ATM and interchange fees

 

1,219

 

 

 

1,201

 

 

 

1,044

 

 

 

1,012

 

 

 

1,076

 

 

 

4,476

 

 

 

4,165

 

Net realized gains (losses) on securities available-for-sale

 

(21

)

 

 

130

 

 

 

(136

)

 

 

1,462

 

 

 

2,889

 

 

 

1,435

 

 

 

5,301

 

Change in fair value of equity securities, net

 

(98

)

 

 

(275

)

 

 

517

 

 

 

(206

)

 

 

428

 

 

 

(62

)

 

 

729

 

Net gains on sales of loans

 

12,924

 

 

 

12,761

 

 

 

12,270

 

 

 

8,319

 

 

 

9,449

 

 

 

46,274

 

 

 

33,349

 

Wealth management and trust income

 

764

 

 

 

815

 

 

 

722

 

 

 

768

 

 

 

710

 

 

 

3,069

 

 

 

2,680

 

Other non-interest income

 

1,389

 

 

 

1,302

 

 

 

1,622

 

 

 

1,459

 

 

 

1,051

 

 

 

5,772

 

 

 

2,997

 

Total non-interest income

 

19,014

 

 

 

18,495

 

 

 

21,002

 

 

 

15,742

 

 

 

17,690

 

 

 

74,253

 

 

 

62,060

 

NON-INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

28,850

 

 

 

25,978

 

 

 

24,588

 

 

 

21,806

 

 

 

22,559

 

 

 

101,222

 

 

 

89,756

 

Occupancy and equipment expense, net

 

4,995

 

 

 

4,982

 

 

 

4,856

 

 

 

5,779

 

 

 

6,854

 

 

 

20,612

 

 

 

22,957

 

Loan and lease related expenses

 

2,328

 

 

 

1,175

 

 

 

1,503

 

 

 

951

 

 

 

1,324

 

 

 

5,957

 

 

 

5,955

 

Legal, audit, and other professional fees

 

2,376

 

 

 

2,710

 

 

 

2,898

 

 

 

2,214

 

 

 

1,336

 

 

 

10,198

 

 

 

8,138

 

Data processing

 

3,070

 

 

 

3,108

 

 

 

2,847

 

 

 

2,755

 

 

 

2,748

 

 

 

11,780

 

 

 

10,900

 

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

 

26

 

 

 

42

 

 

 

389

 

 

 

621

 

 

 

495

 

 

 

1,078

 

 

 

1,819

 

Other intangible assets amortization expense

 

1,738

 

 

 

1,738

 

 

 

1,848

 

 

 

1,749

 

 

 

1,892

 

 

 

7,073

 

 

 

7,624

 

Other non-interest expense

 

15,585

 

 

 

4,447

 

 

 

4,052

 

 

 

2,967

 

 

 

9,813

 

 

 

27,051

 

 

 

22,273

 

Total non-interest expense

 

58,968

 

 

 

44,180

 

 

 

42,981

 

 

 

38,842

 

 

 

47,021

 

 

 

184,971

 

 

 

169,422

 

INCOME BEFORE PROVISION FOR INCOME TAXES

 

23,067

 

 

 

33,808

 

 

 

38,164

 

 

 

29,173

 

 

 

16,453

 

 

 

124,212

 

 

 

51,667

 

PROVISION FOR INCOME TAXES

 

5,878

 

 

 

8,502

 

 

 

9,672

 

 

 

7,375

 

 

 

4,162

 

 

 

31,427

 

 

 

14,200

 

NET INCOME

 

17,189

 

 

 

25,306

 

 

 

28,492

 

 

 

21,798

 

 

 

12,291

 

 

 

92,785

 

 

 

37,467

 

Dividends on preferred shares

 

196

 

 

 

196

 

 

 

195

 

 

 

196

 

 

 

196

 

 

 

783

 

 

 

783

 

INCOME AVAILABLE TO COMMON STOCKHOLDERS

$

16,993

 

 

$

25,110

 

 

$

28,297

 

 

$

21,602

 

 

$

12,095

 

 

$

92,002

 

 

$

36,684

 

EARNINGS PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.46

 

 

$

0.68

 

 

$

0.75

 

 

$

0.57

 

 

$

0.32

 

 

$

2.45

 

 

$

0.96

 

Diluted

$

0.45

 

 

$

0.66

 

 

$

0.73

 

 

$

0.56

 

 

$

0.31

 

 

$

2.40

 

 

$

0.96

 

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 and per share data)

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

December 31,

 

December 31,

 

2021

 

2021

 

2021

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

0.46

 

 

$

0.68

 

 

$

0.75

 

 

$

0.57

 

 

$

0.32

 

 

$

2.45

 

 

$

0.96

 

Diluted earnings per common share

$

0.45

 

 

$

0.66

 

 

$

0.73

 

 

$

0.56

 

 

$

0.31

 

 

$

2.40

 

 

$

0.96

 

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

$

0.69

 

 

$

0.69

 

 

$

0.77

 

 

$

0.57

 

 

$

0.38

 

 

$

2.71

 

 

$

1.05

 

Weighted average common shares outstanding (basic)

 

37,124,176

 

 

 

37,200,778

 

 

 

37,965,658

 

 

 

38,164,201

 

 

 

38,202,665

 

 

 

37,609,723

 

 

 

38,031,250

 

Weighted average common shares outstanding (diluted)

 

37,999,401

 

 

 

38,018,301

 

 

 

38,696,036

 

 

 

38,915,482

 

 

 

38,574,129

 

 

 

38,369,067

 

 

 

38,312,608

 

Common shares outstanding

 

37,713,903

 

 

 

37,690,087

 

 

 

38,094,972

 

 

 

38,641,851

 

 

 

38,618,054

 

 

 

37,713,903

 

 

 

38,618,054

 

Cash dividends per common share

$

0.09

 

 

$

0.09

 

 

$

0.06

 

 

$

0.06

 

 

$

0.03

 

 

$

0.30

 

 

$

0.12

 

Dividend payout ratio on common stock

 

20.00

%

 

 

13.64

%

 

 

8.22

%

 

 

10.71

%

 

 

9.68

%

 

 

12.50

%

 

 

12.50

%

Tangible book value per common share(1)

$

17.51

 

 

$

17.16

 

 

$

16.74

 

 

$

15.85

 

 

$

16.12

 

 

$

17.51

 

 

$

16.12

 

Key Ratios and Performance Metrics

(annualized where applicable)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

3.97

%

 

 

3.92

%

 

 

3.76

%

 

 

3.78

%

 

 

3.78

%

 

 

3.86

%

 

 

3.81

%

Average cost of deposits

 

0.08

%

 

 

0.08

%

 

 

0.08

%

 

 

0.12

%

 

 

0.15

%

 

 

0.09

%

 

 

0.35

%

Efficiency ratio(2)

 

70.88

%

 

 

54.18

%

 

 

51.95

%

 

 

51.25

%

 

 

61.22

%

 

 

57.27

%

 

 

58.40

%

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

 

55.46

%

 

 

52.35

%

 

 

49.50

%

 

 

50.41

%

 

 

55.77

%

 

 

51.98

%

 

 

56.68

%

Non-interest expense to average assets

 

3.49

%

 

 

2.67

%

 

 

2.57

%

 

 

2.39

%

 

 

2.92

%

 

 

2.78

%

 

 

2.76

%

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

 

2.76

%

 

 

2.58

%

 

 

2.45

%

 

 

2.35

%

 

 

2.67

%

 

 

2.54

%

 

 

2.68

%

Return on average stockholders' equity

 

8.13

%

 

 

12.19

%

 

 

14.10

%

 

 

10.96

%

 

 

6.07

%

 

 

11.31

%

 

 

4.78

%

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

 

12.42

%

 

 

12.69

%

 

 

14.80

%

 

 

11.18

%

 

 

7.50

%

 

 

12.77

%

 

 

5.21

%

Return on average assets

 

1.02

%

 

 

1.53

%

 

 

1.70

%

 

 

1.34

%

 

 

0.76

%

 

 

1.40

%

 

 

0.61

%

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

 

1.56

%

 

 

1.59

%

 

 

1.78

%

 

 

1.37

%

 

 

0.94

%

 

 

1.58

%

 

 

0.67

%

Non-interest income to total revenues(1)

 

23.55

%

 

 

23.61

%

 

 

26.53

%

 

 

21.75

%

 

 

24.00

%

 

 

23.90

%

 

 

22.40

%

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

 

1.29

%

 

 

2.07

%

 

 

2.16

%

 

 

2.06

%

 

 

1.66

%

 

 

1.89

%

 

 

1.75

%

Adjusted pre-tax pre-provision return

on average assets(1)(3)

 

2.03

%

 

 

2.15

%

 

 

2.28

%

 

 

2.10

%

 

 

1.91

%

 

 

2.14

%

 

 

1.83

%

Return on average tangible common stockholders' equity(1)

 

10.94

%

 

 

16.22

%

 

 

18.87

%

 

 

14.86

%

 

 

8.61

%

 

 

15.17

%

 

 

7.06

%

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

 

16.38

%

 

 

16.86

%

 

 

19.77

%

 

 

15.15

%

 

 

10.47

%

 

 

17.04

%

 

 

7.63

%

Non-interest-bearing deposits to total deposits

 

41.87

%

 

 

41.06

%

 

 

41.03

%

 

 

40.12

%

 

 

37.09

%

 

 

41.87

%

 

 

37.09

%

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

 

89.26

%

 

 

90.29

%

 

 

88.26

%

 

 

89.23

%

 

 

91.51

%

 

 

89.26

%

 

 

91.51

%

Deposits to total liabilities

 

87.97

%

 

 

87.73

%

 

 

88.97

%

 

 

84.36

%

 

 

85.08

%

 

 

87.97

%

 

 

85.08

%

Deposits per branch

$

117,160

 

 

$

117,234

 

 

$

115,732

 

 

$

109,229

 

 

$

103,305

 

 

$

117,160

 

 

$

103,305

 

Asset Quality Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

0.51

%

 

 

0.75

%

 

 

0.79

%

 

 

0.83

%

 

 

0.95

%

 

 

0.51

%

 

 

0.95

%

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

 

1.21

%

 

 

1.31

%

 

 

1.38

%

 

 

1.47

%

 

 

1.53

%

 

 

1.21

%

 

 

1.53

%

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

 

0.37

%

 

 

0.13

%

 

 

0.17

%

 

 

0.47

%

 

 

0.47

%

 

 

0.28

%

 

 

0.51

%

Acquisition accounting adjustments(4)

$

4,769

 

 

$

6,327

 

 

$

9,393

 

 

$

10,424

 

 

$

13,389

 

 

$

4,769

 

 

$

13,389

 

Capital Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity to total assets

 

12.33

%

 

 

12.14

%

 

 

12.33

%

 

 

11.61

%

 

 

12.44

%

 

 

12.33

%

 

 

12.44

%

Tangible common equity to tangible assets(1)

 

10.11

%

 

 

9.89

%

 

 

10.01

%

 

 

9.31

%

 

 

10.01

%

 

 

10.11

%

 

 

10.01

%

Leverage ratio

 

10.89

%

 

 

11.21

%

 

 

10.82

%

 

 

10.93

%

 

 

11.12

%

 

 

10.89

%

 

 

11.12

%

Common equity tier 1 capital ratio

 

11.39

%

 

 

11.32

%

 

 

11.97

%

 

 

12.09

%

 

 

12.20

%

 

 

11.39

%

 

 

12.20

%

Tier 1 capital ratio

 

12.37

%

 

 

12.32

%

 

 

13.05

%

 

 

13.20

%

 

 

13.36

%

 

 

12.37

%

 

 

13.36

%

Total capital ratio

 

14.70

%

 

 

14.78

%

 

 

15.74

%

 

 

15.96

%

 

 

16.18

%

 

 

14.70

%

 

 

16.18

%

(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 December 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

 

$

106,170

 

 

$

42

 

 

 

0.16

%

 

$

39,500

 

 

$

21

 

 

 

0.22

%

Loans and leases(1)

 

 

4,610,608

 

 

 

58,570

 

 

 

5.04

%

 

 

4,340,388

 

 

 

53,441

 

 

 

4.90

%

Taxable securities

 

 

1,288,969

 

 

 

5,111

 

 

 

1.57

%

 

 

1,364,980

 

 

 

5,555

 

 

 

1.62

%

Tax-exempt securities(2)

 

 

184,015

 

 

 

1,217

 

 

 

2.62

%

 

 

168,878

 

 

 

1,148

 

 

 

2.71

%

Total interest-earning assets

 

$

6,189,762

 

 

$

64,940

 

 

 

4.16

%

 

$

5,913,746

 

 

$

60,165

 

 

 

4.05

%

Allowance for loan and lease losses

 

 

(59,144

)

 

 

 

 

 

 

 

 

(63,891

)

 

 

 

 

 

 

All other assets

 

 

568,451

 

 

 

 

 

 

 

 

 

550,766

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

6,699,069

 

 

 

 

 

 

 

 

$

6,400,621

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest checking

 

$

659,841

 

 

$

236

 

 

 

0.14

%

 

$

578,520

 

 

$

287

 

 

 

0.20

%

Money market accounts

 

 

1,089,398

 

 

 

345

 

 

 

0.13

%

 

 

1,152,012

 

 

 

444

 

 

 

0.15

%

Savings

 

 

633,469

 

 

 

75

 

 

 

0.05

%

 

 

554,633

 

 

 

66

 

 

 

0.05

%

Time deposits

 

 

688,154

 

 

 

381

 

 

 

0.22

%

 

 

802,409

 

 

 

1,017

 

 

 

0.50

%

Total interest-bearing deposits

 

 

3,070,862

 

 

 

1,037

 

 

 

0.13

%

 

 

3,087,574

 

 

 

1,814

 

 

 

0.23

%

Other borrowings

 

 

385,787

 

 

 

330

 

 

 

0.34

%

 

 

577,309

 

 

 

480

 

 

 

0.33

%

Subordinated notes and debentures

 

 

110,341

 

 

 

1,589

 

 

 

5.71

%

 

 

109,704

 

 

 

1,611

 

 

 

5.84

%

Total borrowings

 

 

496,128

 

 

 

1,919

 

 

 

1.53

%

 

 

687,013

 

 

 

2,091

 

 

 

1.21

%

Total interest-bearing liabilities

 

$

3,566,990

 

 

$

2,956

 

 

 

0.33

%

 

$

3,774,587

 

 

$

3,905

 

 

 

0.41

%

Non-interest-bearing demand deposits

 

 

2,222,583

 

 

 

 

 

 

 

 

 

1,761,902

 

 

 

 

 

 

 

Other liabilities

 

 

70,521

 

 

 

 

 

 

 

 

 

58,539

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

838,975

 

 

 

 

 

 

 

 

 

805,593

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

6,699,069

 

 

 

 

 

 

 

 

$

6,400,621

 

 

 

 

 

 

 

Net interest spread(3)

 

 

 

 

 

 

 

 

3.83

%

 

 

 

 

 

 

 

 

3.64

%

Net interest income, fully taxable equivalent

 

 

 

 

$

61,984

 

 

 

 

 

 

 

 

$

56,260

 

 

 

 

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

 

 

 

 

 

 

 

 

3.97

%

 

 

 

 

 

 

 

 

3.78

%

Tax-equivalent adjustment

 

 

 

 

 

(256

)

 

 

0.01

%

 

 

 

 

 

(240

)

 

 

0.01

%

Net interest income

 

 

 

 

$

61,728

 

 

 

 

 

 

 

 

$

56,020

 

 

 

 

Net interest margin(4)

 

 

 

 

 

 

 

 

3.96

%

 

 

 

 

 

 

 

 

3.77

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loan accretion impact on margin

 

 

 

 

$

1,450

 

 

 

0.09

%

 

 

 

 

$

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.

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,

 

 

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

 

$

69,338

 

 

$

117

 

 

 

0.17

%

 

$

46,508

 

 

$

228

 

 

 

0.49

%

Loans and leases(1)

 

 

4,518,836

 

 

 

222,993

 

 

 

4.93

%

 

 

4,196,708

 

 

 

208,788

 

 

 

4.98

%

Taxable securities

 

 

1,376,045

 

 

 

21,909

 

 

 

1.59

%

 

 

1,287,480

 

 

 

27,233

 

 

 

2.12

%

Tax-exempt securities(2)

 

 

184,622

 

 

 

4,946

 

 

 

2.68

%

 

 

128,664

 

 

 

3,773

 

 

 

2.93

%

Total interest-earning assets

 

$

6,148,841

 

 

$

249,965

 

 

 

4.07

%

 

$

5,659,360

 

 

$

240,022

 

 

 

4.24

%

Allowance for loan and lease losses

 

 

(63,351

)

 

 

 

 

 

 

 

 

(48,688

)

 

 

 

 

 

 

All other assets

 

 

556,641

 

 

 

 

 

 

 

 

 

529,471

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

6,642,131

 

 

 

 

 

 

 

 

$

6,140,143

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest checking

 

$

622,147

 

 

$

883

 

 

 

0.14

%

 

$

469,418

 

 

$

938

 

 

 

0.20

%

Money market accounts

 

 

1,073,970

 

 

 

1,285

 

 

 

0.12

%

 

 

1,132,978

 

 

 

4,238

 

 

 

0.37

%

Savings

 

 

610,953

 

 

 

289

 

 

 

0.05

%

 

 

520,472

 

 

 

252

 

 

 

0.05

%

Time deposits

 

 

722,974

 

 

 

2,045

 

 

 

0.28

%

 

 

940,165

 

 

 

11,196

 

 

 

1.19

%

Total interest-bearing deposits

 

 

3,030,044

 

 

 

4,502

 

 

 

0.15

%

 

 

3,063,033

 

 

 

16,624

 

 

 

0.54

%

Other borrowings

 

 

525,078

 

 

 

1,663

 

 

 

0.32

%

 

 

542,937

 

 

 

3,318

 

 

 

0.61

%

Subordinated notes and debentures

 

 

110,108

 

 

 

6,374

 

 

 

5.79

%

 

 

72,188

 

 

 

4,310

 

 

 

5.97

%

Total borrowings

 

 

635,186

 

 

 

8,037

 

 

 

1.27

%

 

 

615,125

 

 

 

7,628

 

 

 

1.24