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Section 1: 425 (425)

425

Filed by Byline Bancorp, Inc.

Pursuant to Rule 425 of the Securities Act of 1933

and deemed filed pursuant to Rule 14a-12

of the Securities Exchange Act of 1934

Subject Company: Byline Bancorp, Inc. (Commission File No.: 001-38139)

 

LOGO

Byline Bancorp, Inc. Reports Fourth Quarter 2018 Financial Results

Fourth Quarter 2018 Highlights

 

   

Net income of $17.1 million, or $0.46 per diluted share, a record high since our initial public offering

 

   

Net interest margin of 4.69% for the fourth quarter of 2018, compared to 4.73% for the third quarter of 2018, and 4.26% for the fourth quarter of 2017

 

   

Net interest margin excluding accretion income1 improves to 4.13% for the fourth quarter of 2018, compared to 3.99% for the third quarter of 2018, and 3.96% for the fourth quarter of 2017

 

   

Originated loans and leases grew to $2.2 billion at December 31, 2018, an increase of $171.6 million, or 8.3%, from September 30, 2018

 

   

Efficiency ratio of 56.81% for the fourth quarter of 2018, compared to 56.57% for the third quarter of 2018, and 66.06% for the fourth quarter of 2017

 

   

Adjusted efficiency ratio1 improves to 54.95% for the fourth quarter of 2018, compared to 55.78% for the third quarter of 2018, and 63.23% for the fourth quarter of 2017

 

   

Return on average assets improves to 1.39% for the fourth quarter of 2018, compared to 1.20% for the third quarter of 2018, and (0.09)% for the fourth quarter of 2017

 

   

Return on average stockholders’ equity improves to 10.61% for the fourth quarter of 2018, compared to 9.22% for the third quarter of 2018, and (0.66)% for the fourth quarter of 2017

Full Year 2018 Highlights

 

   

2018 net income of $41.2 million, or $1.18 per diluted share, compared to 2017 net income of $21.7 million, or $0.38 per diluted share

 

   

Net interest margin improves to 4.60% for 2018, compared to 4.11% for 2017

 

   

Net interest margin excluding accretion income1 improves to 4.07% for 2018, compared to 3.82% for 2017

 

   

Originated loans and leases grew to $2.2 billion at December 31, 2018, an increase of $664.4 million, or 42.2%, from December 31, 2017

 

   

Efficiency ratio improves to 65.31% for 2018, compared to 67.32% for 2017

 

   

Adjusted efficiency ratio1 improves to 59.87% for 2018, compared to 66.04% for 2017

 

   

Return on average assets improves to 0.97% for 2018, compared to 0.66% for 2017

 

   

Return on average stockholders’ equity improves to 7.34% for 2018, compared to 5.08% for 2017

Chicago, IL, January 24, 2019 – Byline Bancorp, Inc. (the “Company” or “Byline”)(NYSE: BY), the parent company of Byline Bank (the “Bank”), today reported net income of $17.1 million, or $0.46 per diluted share, for the fourth quarter of 2018, compared with net income of $14.5 million, or $0.39 per diluted share, for the third quarter of 2018, and a net loss of $766,000, or $0.03 per diluted share, for the fourth

 

(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.


Byline Bancorp, Inc.

Page 2 of 23

 

quarter of 2017. The Company’s financial results during 2018 include certain costs associated with its acquisition and integration of First Evanston Bancorp, Inc. (“First Evanston”) and its bank subsidiary First Bank & Trust, which closed on May 31, 2018, as well as its previously announced pending acquisition of Oak Park River Forest Bankshares, Inc. Excluding these merger-related expenses, planned core system conversion expenses, and impairment charges on assets held for sale, adjusted net income1 was $18.1 million, or $0.49 per adjusted diluted share, for the fourth quarter of 2018, compared with $14.9 million, or $0.40 per adjusted diluted share, for the third quarter of 2018, and $7.3 million, or $0.24 per adjusted diluted share, for the fourth quarter of 2017. A reconciliation of adjusted net income and adjusted diluted earnings per share to net income and diluted earnings per share, respectively, according to accounting principles generally accepted in the United States of America (“GAAP”) is provided in the financial tables at the end of this release.

Alberto J. Paracchini, President and Chief Executive Officer of Byline, commented, “We delivered a very strong quarter, characterized by a strong net interest margin, improved operating performance, lower credit costs and solid organic growth, with contributions coming from our diversified commercial lending platform, branch network and government guaranteed lending business. Earnings for the quarter were the highest since our IPO, and reflect the hard work of our employees in serving customers and the successful integration of First Evanston.

“We remain focused on executing our strategy of pursuing disciplined organic growth and improving operating efficiencies in 2019. We believe our pending acquisition of Oak Park River Forest Bankshares, Inc. will enhance our position in an attractive Chicago metropolitan market, provide an important source of low-cost deposits, and further enhance the value of the Byline franchise. Completing the acquisition and ensuring a smooth transition for customers and colleagues is a top priority for 2019,” said Mr. Paracchini.

STATEMENTS OF OPERATIONS

Net Interest Income

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

 

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.


Byline Bancorp, Inc.

Page 3 of 23

 

     Three Months Ended      Year Ended  
(dollars in thousands)    December 31,
2018
     September 30,
2018
     June 30,
2018
     March 31,
2018
     December 31,
2017
     December 31,
2018
     December 31,
2017
 

INTEREST AND DIVIDEND INCOME

                    

Interest and fees on loans and leases

   $ 56,646      $ 55,045      $ 39,627      $ 33,654      $ 31,896      $ 184,972      $ 120,406  

Interest on taxable securities

     5,334        5,076        4,572        4,055        3,679        19,037        14,892  

Interest on tax-exempt securities

     355        337        229        174        176        1,095        634  

Other interest and dividend income

     560        615        413        259        205        1,847        871  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total interest and dividend income

     62,895        61,073        44,841        38,142        35,956        206,951        136,803  

INTEREST EXPENSE

                    

Deposits

     7,115        5,971        3,745        2,498        2,218        19,329        7,736  

Federal Home Loan Bank advances

     1,719        1,723        1,360        1,358        1,009        6,160        3,291  

Subordinated debentures and other borrowings

     800        786        680        591        578        2,857        2,864  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total interest expense

     9,634        8,480        5,785        4,447        3,805        28,346        13,891  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net interest income

   $ 53,261      $ 52,593      $ 39,056      $ 33,695      $ 32,151      $ 178,605      $ 122,912  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 


Byline Bancorp, Inc.

Page 4 of 23

 

The following table presents the quarter-to-date schedule of average interest-earning assets and average interest-bearing liabilities for the periods indicated:

 

     For the Three Months Ended  
     December 31,
2018
    September 30,
2018
 
(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

   $ 91,852     $ 316        1.37   $ 107,555     $ 368        1.36

Loans and leases(1)

     3,470,264       56,646        6.48     3,387,569       55,045        6.45

Securities available-for-sale

     798,234       5,005        2.49     768,189       4,738        2.45

Securities held-to-maturity

     88,115       573        2.58     91,892       585        2.53

Tax-exempt securities(2)

     56,649       355        2.48     55,656       337        2.40
  

 

 

   

 

 

      

 

 

   

 

 

    

Total interest-earning assets

   $ 4,505,114     $ 62,895        5.54   $ 4,410,861     $ 61,073        5.49
  

 

 

   

 

 

      

 

 

   

 

 

    

Allowance for loan and lease losses

     (24,215          (21,557     

All other assets

     415,535            420,635       
  

 

 

        

 

 

      

TOTAL ASSETS

   $ 4,896,434          $ 4,809,939       
  

 

 

        

 

 

      

LIABILITIES AND STOCKHOLDERS’ EQUITY

              

Deposits

              

Interest checking

   $ 308,821     $ 407        0.52   $ 316,394     $ 384        0.48

Money market accounts

     653,141       1,505        0.91     618,213       1,200        0.77

Savings

     489,486       157        0.13     479,837       148        0.12

Time deposits

     1,130,308       5,046        1.77     1,084,550       4,239        1.55
  

 

 

   

 

 

      

 

 

   

 

 

    

Total interest-bearing deposits

     2,581,756       7,115        1.09     2,498,994       5,971        0.95

Federal Home Loan Bank advances

     360,891       1,719        1.89     394,588       1,723        1.73

Other borrowed funds

     65,226       800        4.86     61,582       786        5.06
  

 

 

   

 

 

      

 

 

   

 

 

    

Total borrowings

     426,117       2,519        2.35     456,170       2,509        2.18
  

 

 

   

 

 

      

 

 

   

 

 

    

Total interest-bearing liabilities

   $ 3,007,873     $ 9,634        1.27   $ 2,955,164     $ 8,480        1.14
    

 

 

        

 

 

    

Non-interest bearing demand deposits

     1,194,445            1,175,523       

Other liabilities

     54,231            53,631       

Total stockholders’ equity

     639,885            625,621       
  

 

 

        

 

 

      

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $ 4,896,434          $ 4,809,939       
  

 

 

        

 

 

      

Net interest spread(3)

          4.27          4.35
       

 

 

        

 

 

 

Net interest income

     $ 53,261          $ 52,593     
    

 

 

        

 

 

    

Net interest margin(4)

          4.69          4.73
       

 

 

        

 

 

 

Net loan accretion impact on margin

     $ 6,351        0.56     $ 8,259        0.74
       

 

 

        

 

 

 

Net interest margin excluding loan accretion(6)

          4.13          3.99
       

 

 

        

 

 

 

 

(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 exclude the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis due to immateriality.

(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.

(6)

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.


Byline Bancorp, Inc.

Page 5 of 23

 

Net interest income for the fourth quarter of 2018 was $53.3 million, an increase of $668,000, or 1.3%, from $52.6 million for the third quarter of 2018.

The increase in net interest income was primarily due to:

 

   

An increase of $1.6 million in interest and fees on loans and leases, primarily due to growth in loan and lease originations and the rising interest rate environment; and

 

   

An increase of $258,000 in interest income on securities, primarily due to additional purchases during the fourth quarter of 2018.

Partially offset by:

 

   

An increase of $1.1 million in interest expense on deposits, primarily due to the rising interest rate environment.

Net interest margin for the fourth quarter of 2018 was 4.69%, a decrease of four 4 basis points compared to 4.73% for the third quarter of 2018. Total net accretion income on acquired loans contributed 56 basis points to the net interest margin for the fourth quarter of 2018 compared to 74 basis points for the third quarter of 2018, a decrease of 18 basis points. Net interest margin excluding loan accretion increased 14 basis points to 4.13% during the fourth quarter of 2018, compared to 3.99% for the third quarter of 2018. Despite a $1.9 million decrease in net loan accretion, interest and fees on loans and leases increased $1.6 million for the fourth quarter of 2018 compared to the third quarter of 2018.

The average cost of total deposits was 0.75% for the fourth quarter of 2018, an increase of 11 basis points compared to the third quarter of 2018, primarily due to increased rates on interest bearing deposits. Additionally, there was growth in average time deposits of $45.8 million and money market accounts of $34.9 million, partially offset by growth in average non-interest bearing demand deposits of $18.9 million.

Provision for Loan and Lease Losses

The provision for loan and lease losses was $3.9 million for the fourth quarter of 2018, a decrease of $1.9 million compared to $5.8 million for the third quarter of 2018. The fourth quarter provision included allocations of $2.5 million for originated loans and leases, $1.6 million for acquired non-impaired loans, and a $152,000 release for acquired impaired loans. The decreased provision during the fourth quarter of 2018 was primarily due to a reduction in specific impairment in the unguaranteed portion of the government guaranteed portfolio offset by increases to the general reserve driven by originated loan and lease portfolio growth.


Byline Bancorp, Inc.

Page 6 of 23

 

Non-interest Income

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

 

     Three Months Ended     Year Ended  
(dollars in thousands)    December 31,
2018
    September 30,
2018
    June 30,
2018
    March 31,
2018
    December 31,
2017
    December 31,
2018
    December 31,
2017
 

NON-INTEREST INCOME

              

Fees and service charges on deposits

   $ 1,852     $ 1,825     $ 1,456     $ 1,312     $ 1,304     $ 6,445     $ 5,289  

Loan servicing revenue

     2,667       2,622       2,533       2,450       2,548       10,272       9,599  

Loan servicing asset revaluation

     (2,862     (2,446     (2,074     (1,887     (1,844     (9,269     (5,941

ATM and interchange fees

     1,286       1,781       1,141       1,218       1,498       5,426       5,840  

Net gains on sales of securities available-for-sale

     160       —         4       —         —         164       8  

Net gains on sales of loans

     9,337       5,015       9,723       7,476       9,036       31,551       33,062  

Wealth management and trust income

     679       674       192       —         —         1,545       —    

Other non-interest income

     1,447       1,672       1,527       859       97       5,505       2,201  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-interest income

   $ 14,566     $ 11,143     $ 14,502     $ 11,428     $ 12,639     $ 51,639     $ 50,058  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-interest income for the fourth quarter of 2018 was $14.6 million, an increase of $3.4 million compared to $11.1 million for the third quarter of 2018.

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

 

   

An increase of $4.3 million in net gains on sales of loans, primarily due to an increase in government guaranteed loans sold, coupled with a slight increase in average premiums as a result of the mix of loans sold; and

 

   

An increase of $160,000 in net gains on sales of securities available-for-sale due to calls of securities during the quarter.

Partially offset by:

 

   

A decrease of $495,000 in ATM and interchange fees, primarily due to a credit card vendor agreement signing bonus in the prior quarter; and

 

   

An additional $416,000 in loan servicing asset revaluation, primarily due to the change in fair value of the servicing asset as a result of increased prepayment rates and a higher interest rate environment.

During the fourth quarter of 2018, the Company sold $87.4 million of government guaranteed loans compared to $59.6 million during the third quarter of 2018, contributing to the increase in net gains on sale of loans for the quarter. The increase in sales is primarily due to the timing of loans closed becoming fully funded and mix of loans sold. While the current government shutdown may impact our level of originations and government guaranteed loan sales during the first quarter of 2019, as a Small Business Administration (“SBA”) preferred lender with an experienced team, we continue to source new transactions and remain ready to resume normal operations after the shutdown ends.


Byline Bancorp, Inc.

Page 7 of 23

 

Non-interest Expense

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

 

     Three Months Ended     Year Ended  
(dollars in thousands)    December 31,
2018
     September 30,
2018
    June 30,
2018
     March 31,
2018
    December 31,
2017
    December 31,
2018
     December 31,
2017
 

NON-INTEREST EXPENSE

                 

Salaries and employee benefits

   $ 21,548      $ 21,312     $ 19,244      $ 18,278     $ 17,118     $ 80,382      $ 67,269  

Occupancy expense, net

     4,027        3,548       4,499        3,755       3,553       15,829        14,078  

Equipment expense

     641        617       558        603       663       2,419        2,472  

Loan and lease related expenses

     2,223        1,015       1,471        1,400       1,116       6,109        3,685  

Legal, audit and other professional fees

     2,746        2,358       4,418        1,851       2,658       11,373        7,027  

Data processing

     2,846        2,724       10,371        2,301       2,284       18,242        9,539  

Net loss (gain) recognized on other real estate owned and other related expenses

     48        (284     472        (1     (430     235        (294

Regulatory assessments

     462        675       366        241       299       1,744        1,193  

Other intangible assets amortization expense

     1,834        1,898       1,130        767       767       5,629        3,074  

Advertising and promotions

     590        537       347        249       232       1,723        1,035  

Telecommunications

     391        435       466        418       428       1,710        1,593  

Other non-interest expense

     3,008        3,121       2,428        2,057       1,670       10,614        8,852  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Total non-interest expense

   $ 40,364      $ 37,956     $ 45,770      $ 31,919     $ 30,358     $ 156,009      $ 119,523  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Non-interest expense for the fourth quarter of 2018 was $40.4 million, an increase of $2.4 million from $38.0 million for the third quarter of 2018.

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

 

   

An increase of $1.2 million in loan and lease related expenses, primarily due to increased broker fee expenses due to an increase in government guaranteed loan sales;

 

   

An increase of $479,000 in occupancy expense, net, primarily due to costs associated with our prior branch consolidations and seasonal increases; and

 

   

An increase of $388,000 in legal, audit and other professional fees, primarily due to professional services incurred related to the pending acquisition of Oak Park River Forest Bankshares, Inc. and our core system conversion.

Partially offset by:

 

   

A decrease of $213,000 in regulatory assessments, primarily due to an improved risk profile as a result of improved financial ratios and performance.

The Company’s efficiency ratio was 56.81% for the fourth quarter of 2018, compared with 56.57% for the third quarter of 2018. Excluding merger-related expenses, planned core system conversion expenses, and impairment charges on assets held for sale, the Company’s adjusted efficiency ratio(1) was 54.95% for the fourth quarter of 2018, compared with 55.78% for the third quarter of 2018.

 

(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.


Byline Bancorp, Inc.

Page 8 of 23

 

INCOME TAXES

The Company recorded income tax expense of $6.5 million during the fourth quarter of 2018, an effective tax rate of 27.4%, compared to $5.4 million during the third quarter of 2018, an effective tax rate of 27.1%, an increase of $1.1 million. The increase was primarily due to the increase in net income recorded during the quarter.

STATEMENTS OF FINANCIAL CONDITION

Total assets were $4.9 billion at December 31, 2018, an increase of $25.2 million compared to $4.9 billion at September 30, 2018, and an increase of $1.6 billion compared to $3.4 billion at December 31, 2017.

The current quarter increase was primarily due to:

 

   

An increase in loans and leases of $45.8 million, primarily due to an increase of $171.6 million in our originated loan portfolio, partially offset by a decrease of $125.8 million in our acquired loan portfolio;

 

   

An increase in securities of $18.8 million, primarily due to additional purchases of mortgage-backed and government guaranteed mortgage-backed securities during the quarter; and

 

   

An increase in loans held for sale of $11.1 million, primarily due to the timing of loan closings at December 31, 2018.

Partially offset by:

 

   

A decrease in interest bearing deposits with other banks of $27.9 million, primarily due to lower reserve and cash management requirements;

 

   

A decrease in due from counterparty of $9.1 million due to the timing of the settlement of loans sold at December 31, 2018;

 

   

A decrease in deferred tax assets, net of $6.9 million, primarily due to utilization of operating loss carryforwards; and

 

   

A decrease in other assets of $4.8 million, primarily due to a reduction in the fair value of interest rate swaps resulting from lower interest rates.


Byline Bancorp, Inc.

Page 9 of 23

 

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

 

     December 31, 2018     September 30, 2018     December 31, 2017  
(dollars in thousands)    Amount     % of Total     Amount     % of Total     Amount     % of Total  

Originated loans and leases

            

Commercial real estate

   $ 652,234       18.6   $ 619,767       17.9   $ 513,622       22.5

Residential real estate

     466,309       13.3     445,717       12.9     400,571       17.6

Construction, land development, and other land

     144,128       4.1     140,391       4.1     97,638       4.3

Commercial and industrial

     803,508       22.9     696,750       20.2     416,499       18.3

Installment and other

     11,718       0.3     7,729       0.2     3,724       0.2

Leasing financing receivables

     159,901       4.6     155,825       4.5     141,329       6.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total originated loans and leases

   $ 2,237,798       63.8   $ 2,066,179       59.8   $ 1,573,383       69.1

Acquired impaired loans

            

Commercial real estate

   $ 146,808       4.2   $ 154,108       4.5   $ 166,712       7.3

Residential real estate

     113,934       3.3     120,963       3.5     144,562       6.4

Construction, land development, and other land

     3,779       0.1     4,203       0.1     5,946       0.3

Commercial and industrial

     12,617       0.4     14,436       0.4     10,008       0.4

Installment and other

     404       0.0     458       0.0     462       0.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total acquired impaired loans

   $ 277,542       8.0   $ 294,168       8.5   $ 327,690       14.4

Acquired non-impaired loans and leases

            

Commercial real estate

   $ 462,565       13.2   $ 498,329       14.4   $ 211,359       9.3

Residential real estate

     124,659       3.6     138,516       4.0     32,085       1.4

Construction, land development, and other land

     37,442       1.1     37,111       1.1     1,845       0.1

Commercial and industrial

     328,672       9.4     384,260       11.1     94,731       4.1

Installment and other

     1,596       0.0     4,007       0.1     42       0.0

Leasing financing receivables

     31,352       0.9     33,232       1.0     36,357       1.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total acquired non-impaired loans and leases

   $ 986,286       28.2   $ 1,095,455       31.7   $ 376,419       16.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans and leases

   $ 3,501,626       100.0   $ 3,455,802       100.0   $ 2,277,492       100.0
    

 

 

     

 

 

     

 

 

 

Allowance for loan and lease losses

     (25,201       (23,424       (16,706  
  

 

 

     

 

 

     

 

 

   

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

   $ 3,476,425       $ 3,432,378       $ 2,260,786    
  

 

 

     

 

 

     

 

 

   


Byline Bancorp, Inc.

Page 10 of 23

 

ASSET QUALITY

Non-Performing Assets

The following table sets forth the amounts of non-performing loans and leases, non-performing assets, and other real estate owned at the dates indicated:

 

(dollars in thousands)    December 31,
2018
    September 30,
2018
    June 30,
2018
    March 31,
2018
    December 31,
2017
 

Nonperforming assets:

          

Non-accrual loans and leases

   $ 25,834     $ 28,643     $ 25,742     $ 23,626     $ 15,763  

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

     —         291       197       —         —    

Accruing troubled debt restructured loans

     1,813       1,230       1,238       1,037       1,061  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-performing loans and leases

     27,647       30,164       27,177       24,663       16,824  

Other real estate owned

     5,314       4,891       6,402       10,466       10,626  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-performing assets

   $ 32,961     $ 35,055     $ 33,579     $ 35,129     $ 27,450  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     0.79     0.87     0.81     1.08     0.74

Total non-performing assets as a percentage of total assets

     0.67     0.71     0.70     1.01     0.82

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

     91.15     77.65     72.44     71.53     99.30

Nonperforming assets guaranteed by U.S. government:

          

Non-accrual loans guaranteed

   $ 4,245     $ 6,830     $ 6,810     $ 6,266     $ 4,543  

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

     —         —         152       —         —    

Accruing troubled debt restructured loans guaranteed

     381       431       —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-performing loans and leases guaranteed

     4,626       7,261       6,962       6,266       4,543  

Other real estate owned guaranteed

     —         —         298       482       —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-performing assets guaranteed

   $ 4,626     $ 7,261     $ 7,260     $ 6,748     $ 4,543  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     0.66     0.66     0.60     0.81     0.54

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

     0.57     0.57     0.55     0.82     0.68

Variances in non-performing assets:

 

   

Non-performing loans and leases were $27.6 million at December 31, 2018, a decrease of $2.6 million from $30.2 million at September 30, 2018; and

 

   

Other real estate owned was $5.3 million at December 31, 2018, an increase of $423,000 from $4.9 million at September 30, 2018, primarily due to properties added during the fourth quarter of 2018.

Non-performing assets included $4.6 million of government guaranteed balances at December 31, 2018 and $7.3 million at September 30, 2018, a decrease of $2.7 million primarily due to guarantee collections from the SBA.


Byline Bancorp, Inc.

Page 11 of 23

 

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     Year Ended  
(dollars in thousands)    December 31,
2018
    September 30,
2018
    June 30,
2018
    March 31,
2018
    December 31,
2017
    December 31,
2018
    December 31,
2017
 

Allowance for loan and lease losses, beginning of period

   $ 23,424     $ 19,687     $ 17,640     $ 16,706     $ 15,980     $ 16,706     $ 10,923  

Provision for loan and lease losses

     3,882       5,842       3,956       5,115       3,347       18,795       12,653  

Net charge-offs of loans and leases

     (2,105     (2,105     (1,909     (4,181     (2,621     (10,300     (6,870
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Allowance for loan and lease losses, end of period

   $ 25,201     $ 23,424     $ 19,687     $ 17,640     $ 16,706     $ 25,201     $ 16,706  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     0.72     0.68     0.59     0.77     0.73     0.72     0.73

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

     0.24     0.25     0.29     0.75     0.46     0.35     0.31

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

     1.84x       2.77x       2.07x       1.22x       1.28x       1.82x       1.84x  

The allowance for loan and lease losses as a percentage of total loans and leases held for investment decreased from 0.73% at December 31, 2017, and increased from 0.68% at September 30, 2018, compared to 0.72% at December 31, 2018.

Net Charge-Offs

Net charge-offs during the fourth quarter of 2018 were $2.1 million, or 0.24% of average loans and leases, on an annualized basis, consistent with $2.1 million, or 0.25% of average loans, during the third quarter of 2018, and a decrease from 0.46% for the comparable quarter one year ago. The decrease in net charge-offs as a percentage of average loans and leases was primarily due to higher loan and lease average balances during the fourth quarter.

Net charge-offs for the fourth quarter of 2018 included $1.8 million in the unguaranteed portion of government guaranteed loans while net charge-offs for the third quarter of 2018 included $1.5 million in the unguaranteed portion of government guaranteed loans.

Deposits and Other Liabilities

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

 

(dollars in thousands)    December 31,
2018
     September 30,
2018
     June 30,
2018
     March 31,
2018
     December 31,
2017
 

Non-interest bearing demand deposits

   $ 1,192,873      $ 1,175,222      $ 1,193,057      $ 749,892      $ 760,887  

Interest bearing checking accounts

     296,339        317,145        287,330        196,802        186,611  

Money market demand accounts

     640,401        661,271        617,108        382,282        349,862  

Other savings

     476,418        476,879        487,130        439,277        437,212  

Time deposits (below $250,000)

     911,603        916,014        879,643        665,541        627,255  

Time deposits ($250,000 and above)

     232,282        194,236        180,609        90,753        81,502  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total deposits

   $ 3,749,916      $ 3,740,767      $ 3,644,877      $ 2,524,547      $ 2,443,329  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 


Byline Bancorp, Inc.

Page 12 of 23

 

Total deposits were $3.7 billion at December 31, 2018, an increase of $9.1 million compared to September 30, 2018, primarily due to continued deposit promotions. Non-interest bearing deposits to total deposits increased slightly from 31.4% at September 30, 2018 to 31.8% at December 31, 2018.

The increase in the current quarter was primarily due to:

 

   

An increase in time deposits of $33.6 million, from $1.1 billion at September 30, 2018 to $1.1 billion at December 31, 2018, primarily driven by continued promotional campaigns and additional brokered certificates of deposit of $40.0 million offset by lower public funds; and

 

   

An increase in non-interest bearing demand deposits of $17.7 million, from $1.2 billion at September 30, 2018 to $1.2 billion at December 31, 2018, primarily driven by a seasonal inflow from commercial customers.

Partially offset by:

 

   

A decrease in money market demand deposits of $20.9 million, from $661.3 million at September 30, 2018 to $640.4 million at December 31, 2018, primarily driven by a seasonal decrease of $18.9 million in personal money market deposits; and

 

   

A decrease in interest bearing checking deposits of $20.8 million, from $317.1 million at September 30, 2018 to $296.3 million at December 31, 2018, primarily driven by a decrease in public funds.

Total borrowings and other liabilities were $542.0 million at December 31, 2018, a decrease of $4.8 million from $546.8 million at September 30, 2018, primarily due to a decrease in accrued expenses and other liabilities partially offset by an increase in securities sold under agreements to repurchase.

Stockholders’ Equity

Total stockholders’ equity was $650.7 million at December 31, 2018, an increase of $20.8 million from $629.9 million at September 30, 2018, primarily due to net income generated during the quarter. Stockholders’ equity increased $192.1 million from $458.6 million at December 31, 2017, primarily due to the $152.1 million in stock consideration issued in connection with the First Evanston acquisition.

The following table presents the actual regulatory capital dollar amounts and ratios of the Company and Byline Bank as of December 31, 2018:

 

     Actual     Minimum Capital
Required
    Required for the Bank
to be Considered
Well Capitalized
 

December 31, 2018

   Amount      Ratio     Amount      Ratio     Amount      Ratio  

Total capital to risk weighted assets:

               

Company

   $ 551,716        14.01   $ 315,144        8.00     N/A        N/A  

Bank

     528,965        13.41     315,505        8.00   $ 394,382        10.00

Tier 1 capital to risk weighted assets:

               

Company

   $ 524,445        13.31   $ 236,358        6.00     N/A        N/A  

Bank

     501,695        12.72     236,629        6.00   $ 315,505        8.00

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

               

Company

   $ 467,507        11.87   $ 177,269        4.50     N/A        N/A  

Bank

     501,695        12.72     177,472        4.50   $ 256,348        6.50

Tier 1 capital to average assets:

               

Company

   $ 524,445        11.06   $ 189,613        4.00     N/A        N/A  

Bank

     501,695        10.57     189,823        4.00   $ 237,278        5.00


Byline Bancorp, Inc.

Page 13 of 23

 

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

Conference Call, Webcast and Slide Presentation

The Company will host a conference call and webcast at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) on Friday, January 25, 2019 to discuss its 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 February 8, 2019 by dialing (877) 344-7529; passcode: 10127801.

A slide presentation relating to the fourth quarter 2018 results will be accessible prior to the scheduled conference call. The slide presentation and webcast of the conference call can be accessed on the News and Events page of the Company’s 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 $4.9 billion in assets and operates more than 50 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 10 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, 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 share, tangible common equity to tangible assets, return on average tangible common stockholders’ equity, adjusted return on average tangible common stockholders’ equity, and net interest margin excluding loan accretion. 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.

Adjusted net income and adjusted diluted earnings per share exclude certain significant items, which include incremental income tax benefit related to the Company’s reversal of its valuation allowance on its net deferred tax assets, incremental income tax benefit related to Illinois corporate income tax rate increases, incremental income tax expense or benefit related to federal corporate income tax reductions, impairment charges on assets held for sale, merger-related expenses, and core system


Byline Bancorp, Inc.

Page 14 of 23

 

conversion expenses adjusted for applicable income tax. Management believes the significant items are not indicative of or useful to measure the Company’s operating performance on an ongoing basis.

Adjusted non-interest expense is non-interest expense excluding certain significant items, which include impairment charges on assets held for sale, merger-related expenses, and core system conversion expenses.

Adjusted efficiency ratio is adjusted non-interest expense less amortization of intangible assets divided by net interest income and non-interest income. Management believes the metric is an important measure of the Company’s operating performance on an ongoing basis.

Adjusted non-interest expense to average assets is adjusted non-interest expense divided by average assets. Management believes the metric is an important measure of the Company’s operating performance on an ongoing basis.

Adjusted return on average stockholders’ equity is adjusted net income divided by average stockholders’ equity. Management believes the metric is an important measure of the Company’s operating performance on an ongoing basis.

Adjusted return on average assets is adjusted net income divided by average assets. Management believes the metric is an important measure of the Company’s operating performance on an ongoing basis.

Non-interest income to total revenues is non-interest income divided by net interest income plus non-interest income. Management believes that it is standard practice in the industry to present non-interest income as a percentage of total revenue. Accordingly, management believes providing these measures may be useful for peer comparison.

Pre-tax pre-provision net income is pre-tax income plus the provision for loan and lease losses. Management believes this metric is important due to the tax benefit resulting from the reversal of the net deferred tax asset valuation allowance, the decrease in the federal corporate income tax rate, and the increase in the Illinois state corporate income tax rate. The metric demonstrates income excluding the tax provision or benefit and excludes the provision for loan and lease losses.

Adjusted pre-tax pre-provision net income is pre-tax pre-provision net income excluding certain significant items, which include impairment charges on assets held for sale, merger-related expenses, and core system conversion expenses. Management believes the metric is an important measure of the Company’s operating performance on an ongoing basis.

Pre-tax pre-provision return on average assets is pre-tax income plus the provision for loan and lease losses, divided by average assets. Management believes this metric is important due to the change in tax expense or benefit resulting from the recent decrease in the federal corporate income tax rate and the recent increase in the Illinois state income tax rate. The ratio demonstrates profitability excluding the tax provision or benefit and excludes the provision for loan and lease losses.

Adjusted pre-tax pre-provision return on average assets excludes certain significant items, which include impairment charges on assets held for sale, merger related expenses, and core system conversion expenses.

Tangible common equity is defined as total stockholders’ equity reduced by preferred stock and goodwill and other intangible assets. Management does not consider servicing assets as an intangible asset for purposes of this calculation.


Byline Bancorp, Inc.

Page 15 of 23

 

Tangible assets is defined as total assets reduced by goodwill and other intangible assets. Management does not consider servicing assets as an intangible asset for purposes of this calculation.

Tangible book value per share is calculated as tangible common equity, which is stockholders’ equity reduced by preferred stock and goodwill and other intangible assets, divided by total shares of common stock outstanding. Management believes this metric is important due to the relative changes in the book value per share exclusive of changes in intangible assets.

Tangible common equity to tangible assets is calculated as tangible common equity divided by tangible assets, which is total assets reduced by goodwill and other intangible assets. Management believes this metric is important to investors and analysts interested in relative changes in the ratio of total stockholders’ equity to total assets, each exclusive of changes in intangible assets.

Tangible net income available to common stockholders is net income available to common stockholders excluding after-tax intangible asset amortization.

Adjusted tangible net income is tangible net income available to common stockholders excluding certain significant items, which include incremental income tax benefit related to Byline’s reversal of its valuation allowance on its net deferred tax assets, incremental income tax benefit related to Illinois corporate income tax rate increases, incremental income tax expense or benefit related to federal corporate income tax reductions, impairment charges on assets held for sale, merger-related expenses, and core system conversion expenses adjusted for applicable income tax. Management believes the metric is an important measure of the Company’s operating performance on an ongoing basis.

Return on average tangible common stockholders’ equity is tangible net income available to common stockholders divided by average tangible common stockholders’ equity. Management believes the metric is an important measure of the Company’s operating performance on an ongoing basis.

Adjusted return on average tangible common stockholders’ equity is adjusted tangible net income available to common stockholders divided by average tangible common stockholders’ equity. Management believes the metric is an important measure of the Company’s operating performance on an ongoing basis.

Net interest margin excluding loan accretion is calculated as reported net interest margin less the effect of accretion income net of contractual interest collected on acquired loans. Management believes that this metric is important as it illustrates the impact of net accretion income from acquired loans on the net interest margin.

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


Byline Bancorp, Inc.

Page 16 of 23

 

representatives, which could cause actual results to differ materially from those presented in this communication. No representations, warranties or guarantees are or will be made by Byline as to the reliability, accuracy or completeness of any forward-looking statements contained in this communication or that such forward-looking statements are or will remain based on reasonable assumptions. You should not place undue reliance on any forward-looking statements contained in this communication.

In addition, this communication contains forward-looking statements related to the pending merger of Byline and Oak Park River Forest Bankshares, Inc., including, but not limited to, with respect to the expected completion date, financial benefits and other effects of the transaction. Factors that could cause actual results to differ materially from those presented in this communication regarding the pending merger may include, but are not limited to, the reaction to the transaction of the companies’ customers, employees, and counterparties; customer disintermediation; inflation; expected synergies, costs savings, and other financial benefits of the proposed transaction that might not be realized within the expected timeframes or might be less than projected; the requisite Oak Park River Forest Bankshares, Inc. stockholder approval for the proposed transaction might not be obtained; credit and interest rate risks associated with Byline’s and Oak Park River Forest Bankshares, Inc.’s respective businesses, customers, borrowings, repayment, investment, and deposit practices; general economic conditions, either nationally or in the market areas in which Byline and Oak Park River Forest Bankshares, Inc. operate or anticipate doing business, are less favorable than expected; new regulatory or legal requirements or obligations, and other risks.

Certain risks and important factors that could affect Byline’s future results are identified in its Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission, including among other things under the heading “Risk Factors” in such Annual Report on Form 10-K. 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.

Contacts:

 

Investors:   Media:
Allyson Pooley/Tony Rossi   Erin O’Neill
Financial Profiles, Inc.   Director of Marketing
BYIR@bylinebank.com   Byline Bank
  773-475-2901
  eoneill@bylinebank.com


Byline Bancorp, Inc.

Page 17 of 23

 

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)

 

(dollars in thousands)    December 31,
2018
    September 30,
2018
    June 30,
2018
    March 31,
2018
    December 31,
2017
 
ASSETS           

Cash and due from banks

   $ 30,190     $ 25,162     $ 25,299     $ 17,396     $ 19,404  

Interest bearing deposits with other banks

     91,670       119,594       127,417       110,645       38,945  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents

     121,860       144,756       152,716       128,041       58,349  

Securities available-for-sale, at fair value

     817,656       795,408       757,825       626,057       583,236  

Securities held-to-maturity, at amortized cost

     99,266       102,683       106,613       112,266       117,163  

Restricted stock, at cost

     19,202       19,202       18,977       17,177       16,343  

Loans held for sale

     19,827       8,737       5,822       8,219       5,212  

Loans and leases:

          

Loans and leases

     3,501,626       3,455,802       3,348,692       2,280,418       2,277,492  

Allowance for loan and lease losses

     (25,201     (23,424     (19,687     (17,640     (16,706
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loans and leases

     3,476,425       3,432,378       3,329,005       2,262,778       2,260,786  

Servicing assets, at fair value

     19,693       20,674       21,587       21,615       21,400  

Accrued interest receivable

     10,863       11,331       10,670       6,971       7,670  

Premises and equipment, net

     98,568       106,948       107,300       94,014       95,224  

Assets held for sale

     14,489       8,343       11,428       9,030       9,779  

Other real estate owned, net

     5,314       4,891       6,402       10,466       10,626  

Goodwill

     127,536       127,536       127,536       54,562       54,562  

Other intangible assets, net

     33,419       35,248       37,139       15,991       16,756  

Bank-owned life insurance

     5,961       5,923       5,886       5,838       5,718  

Deferred tax assets, net

     35,395       42,287       48,936       47,371       47,376  

Due from counterparty

     5,338       14,484       25,569       19,987       39,824  

Other assets

     31,762       36,580       31,869       21,989       16,106  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 4,942,574     $ 4,917,409     $ 4,805,280     $ 3,462,372     $ 3,366,130  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY           

LIABILITIES

          

Non-interest bearing demand deposits

   $ 1,192,873     $ 1,175,222     $ 1,193,057     $ 749,892     $ 760,887  

Interest bearing deposits:

          

NOW, savings accounts, and money market accounts

     1,413,158       1,455,295       1,391,568       1,018,361       973,685  

Time deposits

     1,143,885       1,110,250       1,060,252       756,294       708,757  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total deposits

     3,749,916       3,740,767       3,644,877       2,524,547       2,443,329  

Accrued interest payable

     3,484       2,971       2,562       1,612       1,306  

Line of credit

     —         —         —         —         —    

Federal Home Loan Bank advances

     425,000       425,000       420,000       380,000       361,506  

Securities sold under agreements to repurchase

     34,166       24,446       24,653       27,815       31,187  

Junior subordinated debentures issued to capital trusts, net

     36,768       36,615       36,452       27,800       27,647  

Accrued expenses and other liabilities

     42,568       57,749       60,330       37,662       42,577  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     4,291,902       4,287,548       4,188,874       2,999,436       2,907,552  

STOCKHOLDERS’ EQUITY

          

Preferred stock

     10,438       10,438       10,438       10,438       10,438  

Common stock

     361       361       360       293       292  

Additional paid-in capital

     546,849       545,827       544,686       392,932       391,586  

Retained earnings

     102,522       85,597       71,257       68,687       61,349  

Accumulated other comprehensive loss, net of tax

     (9,498     (12,362     (10,335     (9,414     (5,087
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     650,672       629,861       616,406       462,936       458,578  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 4,942,574     $ 4,917,409     $ 4,805,280     $ 3,462,372     $ 3,366,130  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


Byline Bancorp, Inc.

Page 18 of 23

 

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

 

    Three Months Ended     Year Ended  
(dollars in thousands, except share and per share data)   December 31,
2018
    September 30,
2018
    June 30,
2018
    March 31,
2018
    December 31,
2017
    December 31,
2018
    December 31,
2017
 

INTEREST AND DIVIDEND INCOME

             

Interest and fees on loans and leases

  $ 56,646     $ 55,045     $ 39,627     $ 33,654     $ 31,896     $ 184,972     $ 120,406  

Interest on taxable securities

    5,334       5,076       4,572       4,055       3,679       19,037       14,892  

Interest on tax-exempt securities

    355       337       229       174       176       1,095       634  

Other interest and dividend income

    560       615       413       259       205       1,847       871  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest and dividend income

    62,895       61,073       44,841       38,142       35,956       206,951       136,803  

INTEREST EXPENSE

             

Deposits

    7,115       5,971       3,745       2,498       2,218       19,329       7,736  

Federal Home Loan Bank advances

    1,719       1,723       1,360       1,358       1,009       6,160       3,291  

Subordinated debentures and other borrowings

    800       786       680       591       578       2,857       2,864  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest expense

    9,634       8,480       5,785       4,447       3,805       28,346       13,891  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

    53,261       52,593       39,056       33,695       32,151       178,605       122,912  

PROVISION FOR LOAN AND LEASE LOSSES

    3,882       5,842       3,956       5,115       3,347       18,795       12,653  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after provision for loan and lease losses

    49,379       46,751       35,100       28,580       28,804       159,810       110,259  

NON-INTEREST INCOME

             

Fees and service charges on deposits

    1,852       1,825       1,456       1,312       1,304       6,445       5,289  

Loan servicing revenue

    2,667       2,622       2,533       2,450       2,548       10,272       9,599  

Loan servicing asset revaluation

    (2,862     (2,446     (2,074     (1,887     (1,844     (9,269     (5,941

ATM and interchange fees

    1,286       1,781       1,141       1,218       1,498       5,426       5,840  

Net gains on sales of securities

available-for-sale

    160       —         4       —         —         164       8  

Net gains on sales of loans

    9,337       5,015       9,723       7,476       9,036       31,551       33,062  

Wealth management and trust income

    679       674       192       —         —         1,545       —    

Other non-interest income

    1,447       1,672       1,527       859       97       5,505       2,201  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-interest income

    14,566       11,143       14,502       11,428       12,639       51,639       50,058  

NON-INTEREST EXPENSE

             

Salaries and employee benefits

    21,548       21,312       19,244       18,278       17,118       80,382       67,269  

Occupancy expense, net

    4,027       3,548       4,499       3,755       3,553       15,829       14,078  

Equipment expense

    641       617       558       603       663       2,419       2,472  

Loan and lease related expenses

    2,223       1,015       1,471       1,400       1,116       6,109       3,685  

Legal, audit and other professional fees

    2,746       2,358       4,418       1,851       2,658       11,373       7,027  

Data processing

    2,846       2,724       10,371       2,301       2,284       18,242       9,539  

Net loss (gain) recognized on other real estate owned and other related expenses

    48       (284     472       (1     (430     235       (294

Regulatory assessments

    462       675       366       241       299       1,744       1,193  

Other intangible assets amortization expense

    1,834       1,898       1,130       767       767       5,629       3,074  

Advertising and promotions

    590       537       347       249       232       1,723       1,035  

Telecommunications

    391       435       466       418       428       1,710       1,593  

Other non-interest expense

    3,008       3,121       2,428       2,057       1,670       10,614       8,852  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-interest expense

    40,364       37,956       45,770       31,919       30,358       156,009       119,523  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME BEFORE PROVISION FOR INCOME TAXES

    23,581       19,938       3,832       8,089       11,085       55,440       40,794  

PROVISION (BENEFIT) FOR INCOME TAXES

    6,460       5,402       1,064       1,321       11,851       14,247       19,099  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

    17,121       14,536       2,768       6,768       (766     41,193       21,695  

Dividends on preferred shares

    196       196       198       193       196       783       11,277  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME AVAILABLE (LOSS ATTRIBUTABLE) TO COMMON STOCKHOLDERS

  $ 16,925     $ 14,340     $ 2,570     $ 6,575     $ (962   $ 40,410     $ 10,418  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EARNINGS (LOSS) PER COMMON SHARE

             

Basic

  $ 0.47     $ 0.40     $ 0.08     $ 0.22     $ (0.03   $ 1.21     $ 0.39  

Diluted

  $ 0.46     $ 0.39     $ 0.08     $ 0.22     $ (0.03   $ 1.18     $ 0.38  

Weighted average common shares outstanding for basic earnings (loss) per common share

    36,116,189       36,042,914       31,614,973       29,291,179       29,246,900       33,292,619       26,963,517  

Diluted weighted average common shares outstanding for diluted earnings (loss) per common share

    36,906,379       36,958,209       32,568,396       29,913,633       29,246,900       34,186,969       27,547,314  


Byline Bancorp, Inc.

Page 19 of 23

 

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,
2018
    September 30,
2018
    June 30,
2018
    March 31,
2018
    December 31,
2017
    December 31,
2018
    December 31,
2017
 

Summary of Operations

              

Net interest income

   $ 53,261     $ 52,593     $ 39,056     $ 33,695     $ 32,151     $ 178,605     $ 122,912  

Provision for loan and lease losses

     3,882       5,842       3,956       5,115       3,347       18,795       12,653  

Non-interest income

     14,566       11,143       14,502       11,428       12,639       51,639       50,058  

Non-interest expense

     40,364       37,956       45,770       31,919       30,358       156,009       119,523  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before provision for income taxes

     23,581       19,938       3,832       8,089       11,085       55,440       40,794  

Provision for income taxes

     6,460       5,402       1,064       1,321       11,851       14,247       19,099  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     17,121       14,536       2,768       6,768       (766     41,193       21,695  

Dividends on preferred shares

     196       196       198       193       196       783       11,277  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income available (loss attributable) to common stockholders

   $ 16,925     $ 14,340     $ 2,570     $ 6,575     $ (962   $ 40,410     $ 10,418  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per Common Share

              

Basic earnings (loss) per common share

   $ 0.47     $ 0.40     $ 0.08     $ 0.22     $ (0.03   $ 1.21     $ 0.39  

Diluted earnings (loss) per common share

   $ 0.46     $ 0.39     $ 0.08     $ 0.22     $ (0.03   $ 1.18     $ 0.38  

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

   $ 0.49     $ 0.40     $ 0.32     $ 0.21     $ 0.24     $ 1.43     $ 0.52  

Weighted average common shares outstanding (basic)

     36,116,189       36,042,914       31,614,973       29,291,179       29,246,900       33,292,619       26,963,517  

Weighted average common shares outstanding (diluted)

     36,906,379       36,958,209       32,568,396       29,913,633       29,246,900       34,186,969       27,547,314  

Common shares outstanding

     36,343,239       36,279,600       36,218,955       29,404,048       29,317,298       36,343,239       29,317,298  

Key Ratios and performance metrics (annualized where applicable)

              

Net interest margin

     4.69     4.73     4.43     4.45     4.26     4.60     4.11

Cost of deposits

     0.75     0.64     0.52     0.41     0.35     0.60     0.31

Efficiency ratio(1)

     56.81     56.57     83.35     69.04     66.06     65.31     67.32

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

     54.95     55.78     63.48     68.77     63.23     59.87     66.04

Non-interest expense to average assets

     3.27     3.13     4.75     3.85     3.64     3.68     3.62

Adjusted non-interest expense to average assets(2)(3)

     3.17     3.09     3.65     3.84     3.49     3.39     3.55

Return on average stockholders’ equity

     10.61     9.22     2.14     5.97     (0.66 )%      7.34     5.08

Adjusted return on average stockholders’ equity(2)(3)(4)

     11.21     9.47     8.18     5.41     6.22     8.85     5.97

Return on average assets

     1.39     1.20     0.29     0.82     (0.09 )%      0.97     0.66

Adjusted return on average assets(2)(3)(4)

     1.47     1.23     1.10     0.74     0.87     1.17     0.77

Non-interest income to total revenues(2)

     21.48     17.48     27.08     25.33     28.22     22.43     28.94

Pre-tax pre-provision return on average assets(2)

     2.23     2.13     0.81     1.59     1.73     1.75     1.62

Adjusted pre-tax pre-provision return on average assets(2)(3)

     2.33     2.17     1.91     1.61     1.89     2.05     1.69

Return on average tangible common stockholders’ equity(2)(3)

     15.49     13.81     3.34     7.65     (0.52 )%      10.44     3.61

Adjusted return on average tangible common stockholders’ equity(2)(3)(4)

     16.31     14.16     11.05     6.96     7.78     12.44     4.73

Non-interest bearing deposits to total deposits

     31.81     31.42     32.73     29.70     31.14     31.81     31.14

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

     93.91     92.62     92.03     90.66     93.43     93.91     93.43

Deposits to total liabilities

     87.37     87.25     87.01     84.17     84.03     87.37     84.03

Deposits per branch

   $ 63,558     $ 63,403     $ 61,778     $ 45,081     $ 43,631     $ 63,558     $ 43,631  

Tangible book value per common share(2)

   $ 13.19     $ 12.59     $ 12.18     $ 12.99     $ 12.85     $ 13.19     $ 12.85  

Asset Quality Ratios

              

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

     0.79     0.87     0.81     1.08     0.74     0.79     0.74

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

     0.72     0.68     0.59     0.77     0.73     0.72     0.73

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

     0.24     0.25     0.29     0.75     0.46     0.35     0.31

Acquisition accounting adjustments(5)

   $ 34,029     $ 42,375     $ 52,090     $ 28,058     $ 31,693     $ 34,029     $ 31,693  

Capital Ratios

              

Common equity to total assets

     12.95     12.60     12.63     13.07     13.31     12.95     13.31

Tangible common equity to tangible assets(2)

     10.02     9.60     9.51     11.26     11.51     10.02     11.51

Leverage ratio

     11.06     10.78     10.57     12.14     12.25     11.06     12.25

Common equity tier 1 capital ratio

     11.87     11.26     10.88     13.49     13.77     11.87     13.77

Tier 1 capital ratio

     13.31     12.71     12.36     15.30     15.27     13.31     15.27

Total capital ratio

     14.01     13.37     12.92     16.05     15.98     14.01     15.98

 

(1)

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

(2)

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.

(3)

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

(4)

Calculation excludes incremental income tax expense or benefit related to changes in corporate income tax rates and reversal of valuation allowance on net deferred tax assets.

(5)

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


Byline Bancorp, Inc.

Page 20 of 23

 

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,  
     2018     2017  
(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

   $ 91,852     $ 316        1.37   $ 38,908     $ 74        0.75

Loans and leases(1)

     3,470,264       56,646        6.48     2,233,863       31,896        5.66

Securities available-for-sale

     798,234       5,005        2.49     588,482       3,166        2.13

Securities held-to-maturity

     88,115       573        2.58     106,367       644        2.40

Tax-exempt securities(2)

     56,649       355        2.48     27,504       176        2.55
  

 

 

   

 

 

      

 

 

   

 

 

    

Total interest-earning assets

   $ 4,505,114     $ 62,895        5.54   $ 2,995,124     $ 35,956        4.76
  

 

 

   

 

 

      

 

 

   

 

 

    

Allowance for loan and lease losses

     (24,215          (16,844     

All other assets

     415,535            325,393       
  

 

 

        

 

 

      

TOTAL ASSETS

   $ 4,896,434          $ 3,303,673       
  

 

 

        

 

 

      

LIABILITIES AND STOCKHOLDERS’ EQUITY

              

Deposits

              

Interest checking

   $ 308,821     $ 407        0.52   $ 188,457     $ 31        0.07

Money market accounts

     653,141       1,505        0.91     384,864       344        0.35

Savings

     489,486       157        0.13     436,916       78        0.07

Time deposits

     1,130,308       5,046        1.77     709,044       1,765        0.99
  

 

 

   

 

 

      

 

 

   

 

 

    

Total interest-bearing deposits

     2,581,756       7,115        1.09     1,719,281       2,218        0.51

Federal Home Loan Bank advances

     360,891       1,719        1.89     261,888       1,009        1.53

Other borrowed funds

     65,226       800        4.86     58,794       578        3.90
  

 

 

   

 

 

      

 

 

   

 

 

    

Total borrowings

     426,117       2,519        2.35     320,682       1,587        1.96
  

 

 

   

 

 

      

 

 

   

 

 

    

Total interest-bearing liabilities

   $ 3,007,873     $ 9,634        1.27   $ 2,039,963     $ 3,805        0.74
    

 

 

        

 

 

    

Non-interest bearing demand deposits

     1,194,445            767,985       

Other liabilities

     54,231            32,424       

Total stockholders’ equity

     639,885            463,301       
  

 

 

        

 

 

      

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $ 4,896,434          $ 3,303,673       
  

 

 

        

 

 

      

Net interest spread(3)

          4.27          4.02
       

 

 

        

 

 

 

Net interest income

     $ 53,261          $ 32,151     
    

 

 

        

 

 

    

Net interest margin(4)

          4.69          4.26
       

 

 

        

 

 

 

Net loan accretion impact on margin

     $ 6,351        0.56     $ 2,301        0.30
       

 

 

        

 

 

 

Net interest margin excluding loan accretion(6)

          4.13          3.96
       

 

 

        

 

 

 

 

(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 exclude the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis due to immateriality.

(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.

(6)

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.


Byline Bancorp, Inc.

Page 21 of 23

 

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,  
     2018     2017  
(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

   $ 76,710     $ 964        1.26   $ 50,865     $ 401        0.79

Loans and leases(1)

     2,947,458       184,972        6.28     2,193,956       120,406        5.48

Securities available-for-sale

     722,841       17,568        2.43     604,762       12,691        2.10

Securities held-to-maturity

     94,519       2,352        2.49     114,143       2,671        2.34

Tax-exempt securities(2)

     44,245       1,095        2.47     23,413       634        2.71
  

 

 

   

 

 

      

 

 

   

 

 

    

Total interest-earning assets

   $ 3,885,773     $ 206,951        5.33   $ 2,987,139     $ 136,803        4.58
  

 

 

   

 

 

      

 

 

   

 

 

    

Allowance for loan and lease losses

     (20,378          (13,755     

All other assets

     373,207            328,847       
  

 

 

        

 

 

      

TOTAL ASSETS

   $ 4,238,602          $ 3,302,231       
  

 

 

        

 

 

      

LIABILITIES AND STOCKHOLDERS’ EQUITY

              

Deposits

              

Interest checking

   $ 260,405     $ 953        0.37   $ 186,177     $ 118        0.06

Money market accounts

     522,599       3,857        0.74     378,796       1,056        0.28

Savings

     465,322       465        0.10     443,024       316        0.07

Time deposits

     954,686       14,054        1.47     764,114       6,246        0.82
  

 

 

   

 

 

      

 

 

   

 

 

    

Total interest-bearing deposits

     2,203,012       19,329        0.88     1,772,111       7,736        0.44

Federal Home Loan Bank advances

     365,533       6,160        1.69     252,720       3,291        1.30

Other borrowed funds

     60,259       2,857        4.74     66,280       2,864        4.32
  

 

 

   

 

 

      

 

 

   

 

 

    

Total borrowings

     425,792       9,017        2.12     319,000       6,155        1.93
  

 

 

   

 

 

      

 

 

   

 

 

    

Total interest-bearing liabilities

   $ 2,628,804     $ 28,346        1.08   $ 2,091,111     $ 13,891        0.66
    

 

 

        

 

 

    

Non-interest bearing demand deposits

     1,002,955            744,797       

Other liabilities

     45,275            38,984       

Total stockholders’ equity

     561,568            427,339       
  

 

 

        

 

 

      

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $ 4,238,602          $ 3,302,231       
  

 

 

        

 

 

      

Net interest spread(3)

          4.25          3.92
       

 

 

        

 

 

 

Net interest income

     $ 178,605          $ 122,912     
    

 

 

        

 

 

    

Net interest margin(4)

          4.60          4.11
       

 

 

        

 

 

 

Net loan accretion impact on margin

     $ 20,550        0.53     $ 8,647        0.29
       

 

 

        

 

 

 

Net interest margin excluding loan accretion(6)

          4.07          3.82
       

 

 

        

 

 

 

 

(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 exclude the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis due to immateriality.

(3)

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

(4)

Represents net interest income divided by total average earning assets.

(5)

Average balances are average daily balances.

(6)

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.


Byline Bancorp, Inc.

Page 22 of 23

 

BYLINE BANCORP, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)

 

    As of or For the Three Months Ended     As of or For the Year Ended  

(dollars in thousands,

except per share data)

  December 31,
2018
    September 30,
2018
    June 30,
2018
    March 31,
2018
    December 31,
2017
    December 31,
2018
    December 31,
2017
 

Net income (loss) and earnings per share excluding significant items

             

Reported Net Income (Loss)

  $ 17,121     $ 14,536     $ 2,768     $ 6,768     $ (766   $ 41,193     $ 21,695  

Significant items:

             

Incremental income tax benefit of state tax rate change

    —         —         —         —         —         —         (4,790

Incremental income tax (benefit) expense attributed to federal income tax reform

    —         —         —         (724     7,154       (724     7,154  

Impairment charges on assets held for sale

    372       139       117       —         —         628       951  

Merger-related expense

    266       150       1,517       123       1,272       2,056       1,272  

Core system conversion expense

    625       213       9,009       —         —         9,847       —    

Tax benefit on significant items

    (297     (112     (2,832     (34     (395     (3,275     (781
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Net Income

  $ 18,087     $ 14,926     $ 10,579     $ 6,133     $ 7,265     $ 49,725     $ 25,501  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reported Diluted Earnings (Loss) per Share

  $ 0.46     $ 0.39     $ 0.08     $ 0.22     $ (0.03   $ 1.18     $ 0.38  

Significant items:

             

Incremental income tax benefit of state tax rate change

    —         —         —         —         —         —         (0.17

Incremental income tax (benefit) expense attributed to federal income tax reform

    —         —         —         (0.02     0.24       (0.02     0.26  

Impairment charges on assets held for sale

    0.01       —         —         —         —         0.02       0.03  

Merger-related expense

    0.01       —         0.05       0.01       0.04       0.06       0.05  

Core system conversion expense

    0.02       0.01       0.28       —         —         0.29       —    

Tax benefit on significant items

    (0.01     —         (0.09     —         (0.01     (0.10     (0.03
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Diluted Earnings per Share

  $ 0.49     $ 0.40     $ 0.32     $ 0.21     $ 0.24     $ 1.43     $ 0.52  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


Byline Bancorp, Inc.

Page 23 of 23

 

BYLINE BANCORP, INC. AND SUBSIDIARIES

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

 

    As of or For the Three Months Ended     As of or For the Year Ended  

(dollars in thousands, except share and per

share data, ratios annualized, where applicable)

  December 31,
2018
    September 30,
2018
    June 30,
2018
    March 31,
2018
    December 31,
2017
    December 31,
2018
    December 31,
2017
 

Adjusted non-interest expense:

             

Non-interest expense

  $ 40,364     $ 37,956     $ 45,770     $ 31,919     $ 30,358     $ 156,009     $ 119,523  

Less: significant items

             

Impairment charges on assets held for sale

    372       139       117       —         —         628       951  

Merger-related expense

    266       150       1,517       123       1,272       2,056       1,272  

Core system conversion expense

    625       213       9,009       —         —         9,847       —    

Adjusted non-interest expense

  $ 39,101     $ 37,454     $ 35,127     $ 31,796     $ 29,086     $ 143,478     $ 117,300  

Adjusted non-interest expense excluding amortization of intangible assets:

             

Adjusted non-interest expense

  $ 39,101     $ 37,454     $ 35,127     $ 31,796     $ 29,086     $ 143,478     $ 117,300  

Less: Amortization of intangible assets

    1,834       1,898       1,130       767       767       5,629       3,074  

Adjusted non-interest expense excluding amortization of intangible assets

    37,267       35,556       33,997       31,029       28,319       137,849       114,226  

Pre-tax pre-provision net income:

             

Pre-tax income

  $ 23,581     $ 19,938     $ 3,832     $ 8,089     $ 11,085     $ 55,440     $ 40,794  

Add: Provision for loan and lease losses

    3,882       5,842       3,956       5,115       3,347       18,795       12,653  

Pre-tax pre-provision net income

  $ 27,463     $ 25,780     $ 7,788     $ 13,204     $ 14,432     $ 74,235     $ 53,447  

Adjusted pre-tax pre-provision net income:

             

Pre-tax pre-provision net income

  $ 27,463     $ 25,780     $ 7,788     $ 13,204     $ 14,432     $ 74,235     $ 53,447  

Impairment charges on assets held for sale

    372       139       117       —         —         628       951  

Merger-related expense

    266       150       1,517       123       1,272       2,056       1,272  

Core system conversion expense

    625       213       9,009       —         —         9,847       —    

Adjusted pre-tax pre-provision net income

  $ 28,726     $ 26,282     $ 18,431     $ 13,327     $ 15,704     $ 86,766     $ 55,670  

Total revenues:

             

Net interest income

  $ 53,261     $ 52,593     $ 39,056     $ 33,695     $ 32,151     $ 178,605     $ 122,912  

Add: non-interest income

    14,566       11,143       14,502       11,428       12,639       51,639       50,058  

Total revenues

  $ 67,827     $ 63,736     $ 53,558     $ 45,123     $ 44,790     $ 230,244     $ 172,970  

Tangible common stockholders’ equity:

             

Total stockholders’ equity

  $ 650,672     $ 629,861     $ 616,406     $ 462,936     $ 458,578     $ 650,672     $ 458,578  

Less: Preferred stock

    10,438       10,438       10,438       10,438       10,438       10,438       10,438  

Less: Goodwill

    127,536       127,536       127,536       54,562       54,562       127,536       54,562  

Less: Core deposit intangibles and other intangibles

    33,419       35,248       37,139       15,991       16,756       33,419       16,756  

Tangible common stockholders’ equity

  $ 479,279     $ 456,639     $ 441,293     $ 381,945     $ 376,822     $ 479,279     $ 376,822  

Tangible assets:

             

Total assets

  $ 4,942,574     $ 4,917,409     $ 4,805,280     $ 3,462,372     $ 3,366,130     $ 4,942,574     $ 3,366,130  

Less: Goodwill

    127,536       127,536       127,536       54,562       54,562       127,536       54,562  

Less: Core deposit intangibles and other intangibles

    33,419       35,248       37,139       15,991       16,756       33,419       16,756  

Tangible assets

  $ 4,781,619     $ 4,754,625     $ 4,640,605     $ 3,391,819     $ 3,294,812     $ 4,781,619     $ 3,294,812  

Average tangible common stockholders’ equity:

             

Average total stockholders’ equity

  $ 639,885     $ 625,621     $ 518,547     $ 459,535     $ 463,301     $ 561,568     $ 427,339  

Less: Average preferred stock

    10,438       10,438       10,438       10,438       10,438       10,438       17,837  

Less: Average goodwill

    127,536       127,536       78,619       54,562       52,003       97,347       51,975  

Less: Average core deposit intangibles and other intangibles

    34,564       36,444       22,998       16,417       17,186       27,679       18,360  

Average tangible common stockholders’ equity

  $ 467,347     $ 451,203     $ 406,492     $ 378,118     $ 383,674     $ 426,104     $ 339,167  

Average tangible assets:

             

Average total assets

  $ 4,896,434     $ 4,809,939     $ 3,863,184     $ 3,362,071     $ 3,303,673     $ 4,238,602     $ 3,302,231  

Less: Average goodwill

    127,536       127,536       78,619       54,562       52,003       97,347       51,975  

Less: Average core deposit intangibles and other intangibles

    34,564       36,444       22,998       16,417       17,186       27,679       18,360  

Average tangible assets

  $ 4,734,334     $ 4,645,959     $ 3,761,567     $ 3,291,092     $ 3,234,484     $ 4,113,576     $ 3,231,896  

Tangible net income available (loss attributable) to common stockholders:

             

Net income available (loss attributable) to common stockholders

  $ 16,925     $ 14,340     $ 2,570     $ 6,575     $ (962   $ 40,410     $ 10,418  

Add: After-tax intangible asset amortization

    1,322       1,370       815       553       455       4,061       1,825  

Tangible net income available (loss attributable) to common stockholders

  $ 18,247     $ 15,710     $ 3,385     $ 7,128     $ (507   $ 44,471     $ 12,243  

Adjusted Tangible net income available (loss attributable) to common stockholders:

             

Tangible net income available (loss attributable) to common stockholders

  $ 18,247     $ 15,710     $ 3,385     $ 7,128     $ (507   $ 44,471     $ 12,243  

Incremental income tax benefit of state tax rate change

    —         —         —         —         —         —         (4,790

Incremental income tax (benefit) expense attributed to federal income tax reform

    —         —         —         (724     7,154       (724     7,154  

Impairment charges on assets held for sale

    372       139       117       —         —         628       951  

Merger-related expense

    266       150       1,517       123       1,272       2,056       1,272  

Core system conversion expense

    625       213       9,009       —         —         9,847       —    

Tax benefit on significant items

    (297     (112     (2,832     (34     (395     (3,275     (781

Adjusted tangible net income available (loss attributable) to common stockholders

  $ 19,213     $ 16,100     $ 11,196     $ 6,493     $ 7,524     $ 53,003     $ 16,049  


Byline Bancorp, Inc.

Page 24 of 23

 

BYLINE BANCORP, INC. AND SUBSIDIARIES

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

 

    As of or For the Three Months Ended     As of or For the Year Ended  

(dollars in thousands, except share and per

share data, ratios annualized, where applicable)

  December 31,
2018
    September 30,
2018
    June 30,
2018
    March 31,
2018
    December 31,
2017
    December 31,
2018
    December 31,
2017
 

Net interest margin:

             

Reported net interest margin

    4.69     4.73     4.43     4.45     4.26     4.60     4.11

Effect of accretion income on acquired loans

    (0.56 )%      (0.74 )%      (0.41 )%      (0.31 )%      (0.30 )%      (0.53 )%      (0.29 )% 

Net interest margin excluding accretion

    4.13     3.99     4.02     4.14     3.96     4.07     3.82

Pre-tax pre-provision return on average assets:

             

Pre-tax pre-provision net income

  $ 27,463     $ 25,780     $ 7,788     $ 13,204     $ 14,432     $ 74,235     $ 53,447  

Total average assets

    4,896,434       4,809,939       3,863,184       3,362,071       3,303,673       4,238,602       3,302,231  

Pre-tax pre-provision return on average assets

    2.23     2.13     0.81     1.59     1.73     1.75     1.62

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

             

Adjusted pre-tax pre-provision net income

  $ 28,726     $ 26,282     $ 18,431     $ 13,327     $ 15,704     $ 86,766     $ 55,670  

Total average assets

    4,896,434       4,809,939       3,863,184       3,362,071       3,303,673       4,238,602       3,302,231  

Adjusted pre-tax pre-provision return on average assets

    2.33     2.17     1.91     1.61     1.89     2.05     1.69

Non-interest income to total revenues:

             

Non-interest income

  $ 14,566     $ 11,143     $ 14,502     $ 11,428     $ 12,639     $ 51,639     $ 50,058  

Total revenues

    67,827       63,736       53,558       45,123       44,790       230,244       172,970  

Non-interest income to total revenues

    21.48     17.48     27.08     25.33     28.22     22.43     28.94

Adjusted non-interest expense to average assets:

             

Adjusted non-interest expense

  $ 39,101     $ 37,454     $ 35,127     $ 31,796     $ 29,086     $ 143,478     $ 117,300  

Total average assets

    4,896,434       4,809,939       3,863,184       3,362,071       3,303,673       4,238,602       3,302,231  

Adjusted non-interest expense to average assets

    3.17     3.09     3.65     3.84     3.49     3.39     3.55

Adjusted efficiency ratio:

             

Adjusted non-interest expense excluding amortization of intangible assets

  $ 37,267     $ 35,556     $ 33,997     $ 31,029     $ 28,319     $ 137,849     $ 114,226  

Total revenues

    67,827       63,736       53,558       45,123       44,790       230,244       172,970  

Adjusted efficiency ratio

    54.95     55.78     63.48     68.77     63.23     59.87     66.04

Adjusted return on average assets:

             

Adjusted net income

  $ 18,087     $ 14,926     $ 10,579     $ 6,133     $ 7,265     $ 49,725     $ 25,501  

Total average assets

    4,896,434       4,809,939       3,863,184       3,362,071       3,303,673       4,238,602       3,302,231  

Adjusted return on average assets

    1.47     1.23     1.10     0.74     0.87     1.17     0.77

Adjusted return on average stockholders’ equity:

             

Adjusted net income

  $ 18,087     $ 14,926     $ 10,579     $ 6,133     $ 7,265     $ 49,725     $ 25,501  

Average stockholders’ equity

    639,885       625,621       518,547       459,535       463,301       561,568       427,339  

Adjusted return on average stockholders’ equity

    11.21     9.47     8.18     5.41     6.22     8.85     5.97

Tangible common equity to tangible assets:

             

Tangible common equity

  $ 479,279     $ 456,639     $ 441,293     $ 381,945     $ 376,822     $ 479,279     $ 376,822  

Tangible assets

    4,781,619       4,754,625       4,640,605       3,391,819       3,294,812       4,781,619       3,294,812  

Tangible common equity to tangible assets

    10.02     9.60     9.51     11.26     11.51     10.02     11.51

Return on average tangible common stockholders’ equity:

             

Tangible net income available (loss attributable) to common stockholders

  $ 18,247     $ 15,710     $ 3,385     $ 7,128     $ (507   $ 44,471     $ 12,243  

Average tangible common stockholders’ equity

    467,347       451,203       406,492       378,118       383,674       426,104       339,167  

Return on average tangible common stockholders’ equity:

    15.49     13.81     3.34     7.65     (0.52 )%      10.44     3.61

Adjusted return on average tangible common stockholders’ equity:

             

Adjusted tangible net income available (loss attributable) to common stockholders

  $ 19,213     $ 16,100     $ 11,196     $ 6,493     $ 7,524     $ 53,003     $ 16,049  

Average tangible common stockholders’ equity

    467,347       451,203       406,492       378,118       383,674       426,104       339,167  

Adjusted return on average tangible common stockholders’ equity

    16.31     14.16     11.05     6.96     7.78     12.44     4.73

Tangible book value per share:

             

Tangible common equity

  $ 479,279     $ 456,639     $ 441,293     $ 381,945     $ 376,822     $ 479,279     $ 376,822  

Shares of common stock outstanding

    36,343,239       36,279,600       36,218,955       29,404,048       29,317,298       36,343,239       29,317,298  

Tangible book value per share

  $ 13.19     $ 12.59     $ 12.18     $ 12.99     $ 12.85     $ 13.19     $ 12.85  
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