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Byline Bancorp, Inc. Reports Second Quarter 2022 Financial Results

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Select Second Quarter 2022 Financial Highlights

  • Net income of $20.3 million, or $0.54 per diluted share

  • Net interest income of $61.6 million and $14.2 million of non-interest income

    • Total revenue1 of $75.8 million

  • Net interest margin of 3.76%

  • Return on average assets of 1.17%

  • Efficiency ratio of 55.29%

  • Non-interest bearing deposits totaled 40.5% of total deposits

  • Originated loans and leases increased $425.1 million, loan and lease production, net of loan sales of $443.0 million

  • Common Equity Tier 1 to risk weighted assets of 10.26%

CHICAGO, July 28, 2022--(BUSINESS WIRE)--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 $20.3 million, or $0.54 per diluted share, for the second quarter of 2022, compared with net income of $22.3 million, or $0.58 per diluted share, for the first quarter of 2022, and net income of $28.5 million, or $0.73 per diluted share, for the second quarter 2021.

Roberto R. Herencia, Executive Chairman and Chief Executive Officer of Byline Bancorp, Inc., commented, "We are pleased with our second quarter results as our team continued to move with agility and execute well in a highly dynamic environment. We continued to experience healthy growth in our loan and lease portfolio as we eclipsed $5.0 billion in loans and leases and surpassed $7.0 billion total assets. I want to thank our employees for their hard work and unwavering dedication to our business."

Alberto J. Paracchini, President of Byline Bancorp, Inc. added, "Our second quarter results reflect the strength and durability of our business model as we posted strong growth in net interest income. Loan and lease growth exceeded our expectations with annualized growth of 34.2%, excluding PPP loans. Credit quality remains solid, and we continue to manage our operating expenses prudently. As we head into the second half of the year we face an uncertain economic environment. However, we believe we are well positioned for the range of possible outcomes given our strong liquidity and capital ratios, our diversified business mix, and our well-established risk management track record."

Board Declares Cash Dividend of $0.09 per Share

On July 26, 2022, the Company's Board of Directors declared a cash dividend of $0.09 per share, payable on August 23, 2022, to stockholders of record of the Company's common stock as of August 9, 2022.

Company Completes Branch Consolidations

The Company continued to execute on its previously announced strategic efforts to optimize its branch network by consolidating six branches during the second quarter 2022, which resulted in a one-time charge of $267,000 during the quarter. These consolidations conclude the Company’s branch consolidation and real estate reduction strategic efforts announced on December 10, 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.

STATEMENTS OF OPERATIONS

Net Interest Income

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

For the Three Months Ended

June 30, 2022

March 31, 2022

June 30, 2021

(dollars in thousands)

Average
Balance(5)

Interest
Inc / Exp

Avg.
Yield /
Rate

Average
Balance(5)

Interest
Inc / Exp

Avg.
Yield /
Rate

Average
Balance(5)

Interest
Inc / Exp

Avg.
Yield /
Rate

ASSETS

Cash and cash equivalents

$

66,034

$

74

0.45

%

$

74,822

$

29

0.16

%

$

75,382

$

28

0.15

%

Loans and leases(1)

5,009,077

59,674

4.78

%

4,670,070

55,426

4.81

%

4,491,197

54,324

4.85

%

Taxable securities

1,330,200

5,904

1.78

%

1,339,345

5,475

1.66

%

1,477,070

5,947

1.62

%

Tax-exempt securities(2)

168,567

1,131

2.69

%

169,652

1,124

2.69

%

187,967

1,281

2.73

%

Total interest-earning assets

$

6,573,878

$

66,783

4.07

%

$

6,253,889

$

62,054

4.02

%

$

6,231,616

$

61,580

3.96

%

Allowance for loan and lease losses

(59,883

)

(55,885

)

(65,848

)

All other assets

461,730

507,982

554,724

TOTAL ASSETS

$

6,975,725

$

6,705,986

$

6,720,492

LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits

Interest checking

$

615,831

$

415

0.27

%

$

579,297

$

178

0.12

%

$

626,886

$

220

0.14

%

Money market accounts

1,307,320

1,194

0.37

%

1,255,431

474

0.15

%

1,052,223

279

0.11

%

Savings

664,954

83

0.05

%

649,269

76

0.05

%

607,035

72

0.05

%

Time deposits

627,199

436

0.28

%

662,080

359

0.22

%

717,795

487

0.27

%

Total interest-bearing deposits

3,215,304

2,128

0.27

%

3,146,077

1,087

0.14

%

3,003,939

1,058

0.14

%

Other borrowings

497,082

1,083

0.87

%

290,545

395

0.55

%

642,586

482

0.30

%

Federal funds purchased

2,527

14

2.32

%

0.00

%

0.00

%

Subordinated notes and debentures

110,649

1,694

6.14

%

110,490

1,600

5.87

%

110,030

1,597

5.82

%

Total borrowings

610,258

2,791

1.83

%

401,035

1,995

2.02

%

752,616

2,079

1.11

%

Total interest-bearing liabilities

$

3,825,562

$

4,919

0.52

%

$

3,547,112

$

3,082

0.35

%

$

3,756,555

$

3,137

0.33

%

Non-interest-bearing demand deposits

2,265,426

2,248,035

2,085,358

Other liabilities

104,085

78,678

68,089

Total stockholders’ equity

780,652

832,161

810,490

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

6,975,725

$

6,705,986

$

6,720,492

Net interest spread(3)

3.55

%

3.67

%

3.63

%

Net interest income, fully taxable equivalent

$

61,864

$

58,972

$

58,443

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

3.77

%

3.82

%

3.76

%

Tax-equivalent adjustment

(237

)

0.01

%

(236

)

0.01

%

(269

)

0.02

%

Net interest income

$

61,627

$

58,736

$

58,174

Net interest margin(4)

3.76

%

3.81

%

3.74

%

Net loan accretion impact on margin

$

1,383

0.08

%

$

1,476

0.10

%

$

1,395

0.09

%

(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.

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

June 30, 2022

Three Months Ended

Change from

June 30,

March 31,

June 30,

March 31,

June 30,

(dollars in thousands)

2022

2022

2021

2022

2021

INTEREST AND DIVIDEND INCOME

Interest and fees on loans and leases

$

59,674

$

55,426

$

54,324

7.7

%

9.8

%

Interest on securities

6,264

6,155

6,359

1.8

%

(1.5

)%

Other interest and dividend income

608

237

628

157.2

%

(3.3

)%

Total interest and dividend income

66,546

61,818

61,311

7.6

%

8.5

%

INTEREST EXPENSE

Deposits

2,128

1,087

1,058

95.8

%

101.2

%

Other borrowings

1,097

395

482

178.0

%

128.0

%

Subordinated notes and debentures

1,694

1,600

1,597

5.9

%

6.0

%

Total interest expense

4,919

3,082

...