Toggle SGML Header (+)


Section 1: 8-K (8-K)

by-8k_20200123.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 23, 2020

 

BYLINE BANCORP, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

Delaware

(State or Other Jurisdiction

of Incorporation)

 

 

 

 

001-38139

 

36-3012593

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

 

180 North LaSalle Street, Suite 300

 

 

Chicago, Illinois

 

60601

(Address of Principal Executive Offices)

 

(Zip Code)

(773) 244-7000

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

BY

New York Stock Exchange

 


 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

2


 

 

Item 2.02.

Results of Operations and Financial Condition.

On January 23, 2020, Byline Bancorp, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter and year ended December 31, 2019. A copy of the press release is attached as Exhibit 99.1 and is incorporated herein by reference.

The information included under this Item 2.02 of Form 8-K and the attached exhibit are being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in any such filing.

 

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits.

 

 

 

 

Exhibit

No.

  

Description

 

 

99.1

  

Fourth Quarter 2019 Financial Results Press Release, dated January 23, 2020

 

 

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements include, without limitation, statements concerning plans, estimates, calculations, forecasts and projections with respect to the anticipated future performance of the Company. These statements are often, but not always, made through the use of words or phrases such as ‘‘may’’, ‘‘might’’, ‘‘should’’, ‘‘could’’, ‘‘predict’’, ‘‘potential’’, ‘‘believe’’, ‘‘expect’’, ‘‘continue’’, ‘‘will’’, ‘‘anticipate’’, ‘‘seek’’, ‘‘estimate’’, ‘‘intend’’, ‘‘plan’’, ‘‘projection’’, ‘‘would’’, ‘‘annualized’’, “target” and ‘‘outlook’’, or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. Forward-looking statements involve estimates and known and unknown risks, and reflect various assumptions and involve elements of subjective judgement and analysis, which may or may not prove to be correct, and which are subject to uncertainties and contingencies outside the control of Byline and its respective affiliates, directors, employees and other representatives, which could cause actual results to differ materially from those presented in this communication. No representations, warranties or guarantees are or will be made by Byline as to the reliability, accuracy or completeness of any forward-looking statements contained in this communication or that such forward-looking statements are or will remain based on reasonable assumptions. You should not place undue reliance on any forward-looking statements contained in this communication.

 

Certain risks and important factors that could affect Byline’s future results are identified in 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.

 

 

3


 

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

 

 

 

 

 

 

 

BYLINE BANCORP, INC.

 

 

 

 

Date: January 23, 2020

 

 

 

By:

/s/ Alberto J. Paracchini

 

 

 

 

Name:

Alberto J. Paracchini

 

 

 

 

Title:

President and Chief Executive Officer

 

 

 

4

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

by-ex991_6.htm

EX-99.1

 

 

                                      

 

Byline Bancorp, Inc. Reports Full Year and Fourth Quarter 2019 Financial Results

 

Full Year 2019 Highlights

 

Net income of $57.0 million, or $1.48 per diluted share

 

Return on average assets improved to 1.08% for 2019

 

Net interest margin of 4.47% for 2019

 

Efficiency ratio improved to 61.09% for 2019 compared to 65.15% for 2018

 

Originated loans and leases increased $597.9 million, or 26.7%, from December 31, 2018

 

Fourth Quarter 2019 Highlights

 

Net income of $15.9 million, or $0.41 per diluted share  

 

Return on average assets of 1.16%

 

Net interest margin of 4.32%

 

Efficiency ratio of 60.93% for the fourth quarter of 2019

 

Originated loans and leases increased $67.5 million, or 2.4%, from September 30, 2019

 

Initiated cash dividend of $0.03 per share to common stockholders for the quarter and approved share repurchase program

 

Chicago, IL, January 23, 2020 – Byline Bancorp, Inc. (the “Company” or “Byline”)(NYSE: BY), the parent company of Byline Bank (the “Bank”), today reported net income of $15.9 million, or $0.41 per diluted share, for the fourth quarter of 2019, compared with net income of $15.3 million, or $0.39 per diluted share, for the third quarter of 2019, and net income of $17.1 million, or $0.46 per diluted share, for the fourth quarter of 2018. The Company’s financial results include certain costs associated with its integration of First Evanston Bancorp, Inc. and its bank subsidiary First Bank & Trust, and its acquisition and integration of Oak Park River Forest Bankshares, Inc. (“Oak Park River Forest”) and its bank subsidiary Community Bank of Oak Park River Forest. Excluding these merger-related expenses, core system conversion expenses, and impairment charges on assets held for sale, adjusted net income1 was $16.1 million, or $0.42 per adjusted diluted share1, for the fourth quarter of 2019, compared with $16.2 million, or $0.41 per adjusted diluted share, for the third quarter of 2019, and $18.1 million, or $0.49 per adjusted diluted share, for the fourth quarter of 2018. 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.

 

 

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 22

Alberto J. Paracchini, President and Chief Executive Officer of Byline, commented, “Our fourth quarter performance completed another strong year for the Byline franchise.  In 2019, we completed another accretive acquisition with the addition of Oak Park River Forest Bankshares, capitalized on disruption in the Chicago marketplace to add significant new banking talent to our organization, and continued to attract new commercial clients to the Bank.  As we moved through the year, we also made steady progress on improving our deposit mix and better managing our funding costs.  Our improving profitability enabled us to initiate a cash dividend in the fourth quarter and deliver additional value to our shareholders.  With the strong foundation we have built and our unique positioning in the Chicago market, we believe we have good opportunities to continue enhancing the value of our franchise in the coming years.

STATEMENTS OF OPERATIONS

Net Interest Income

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

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

(dollars in thousands)

 

2019

 

 

2019

 

 

2019

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

INTEREST AND DIVIDEND INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans and

   leases

 

$

58,203

 

 

$

63,391

 

 

$

59,524

 

 

$

54,383

 

 

$

56,646

 

 

$

235,501

 

 

$

184,972

 

Interest on taxable securities

 

 

6,683

 

 

 

6,554

 

 

 

6,237

 

 

 

5,759

 

 

 

5,334

 

 

 

25,233

 

 

 

19,037

 

Interest on tax-exempt securities

 

 

529

 

 

 

486

 

 

 

428

 

 

 

343

 

 

 

355

 

 

 

1,786

 

 

 

1,095

 

Other interest and dividend

   income

 

 

500

 

 

 

598

 

 

 

571

 

 

 

625

 

 

 

560

 

 

 

2,294

 

 

 

1,847

 

Total interest and dividend

   income

 

 

65,915

 

 

 

71,029

 

 

 

66,760

 

 

 

61,110

 

 

 

62,895

 

 

 

264,814

 

 

 

206,951

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

9,325

 

 

 

9,618

 

 

 

9,306

 

 

 

8,076

 

 

 

7,115

 

 

 

36,325

 

 

 

19,329

 

Federal Home Loan Bank

   advances

 

 

1,917

 

 

 

2,771

 

 

 

2,174

 

 

 

2,099

 

 

 

1,719

 

 

 

8,961

 

 

 

6,160

 

Subordinated debentures and

   other borrowings

 

 

759

 

 

 

802

 

 

 

832

 

 

 

850

 

 

 

800

 

 

 

3,243

 

 

 

2,857

 

Total interest expense

 

 

12,001

 

 

 

13,191

 

 

 

12,312

 

 

 

11,025

 

 

 

9,634

 

 

 

48,529

 

 

 

28,346

 

Net interest income

 

$

53,914

 

 

$

57,838

 

 

$

54,448

 

 

$

50,085

 

 

$

53,261

 

 

$

216,285

 

 

$

178,605

 

 

 


Byline Bancorp, Inc.

Page 3 of 22

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, 2019

 

 

September 30, 2019

 

(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

 

$

38,624

 

 

$

220

 

 

 

2.25

%

 

$

34,225

 

 

$

253

 

 

 

2.93

%

Loans and leases(1)

 

 

3,807,731

 

 

 

58,203

 

 

 

6.06

%

 

 

3,860,770

 

 

 

63,391

 

 

 

6.51

%

Taxable securities

 

 

1,025,975

 

 

 

6,963

 

 

 

2.69

%

 

 

996,750

 

 

 

6,899

 

 

 

2.75

%

Tax-exempt securities(2)

 

 

84,640

 

 

 

529

 

 

 

2.48

%

 

 

76,161

 

 

 

486

 

 

 

2.53

%

Total interest-earning assets

 

$

4,956,970

 

 

$

65,915

 

 

 

5.28

%

 

$

4,967,906

 

 

$

71,029

 

 

 

5.67

%

Allowance for loan and lease losses

 

 

(32,688

)

 

 

 

 

 

 

 

 

 

 

(32,246

)

 

 

 

 

 

 

 

 

All other assets

 

 

502,764

 

 

 

 

 

 

 

 

 

 

 

500,102

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

5,427,046

 

 

 

 

 

 

 

 

 

 

$

5,435,762

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’

   EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest checking

 

$

399,065

 

 

$

612

 

 

 

0.61

%

 

$

358,185

 

 

$

524

 

 

 

0.58

%

Money market accounts

 

 

790,565

 

 

 

1,945

 

 

 

0.98

%

 

 

735,724

 

 

 

1,917

 

 

 

1.03

%

Savings

 

 

474,394

 

 

 

63

 

 

 

0.05

%

 

 

475,417

 

 

 

114

 

 

 

0.10

%

Time deposits

 

 

1,231,641

 

 

 

6,705

 

 

 

2.16

%

 

 

1,270,050

 

 

 

7,063

 

 

 

2.21

%

Total interest-bearing

   deposits

 

 

2,895,665

 

 

 

9,325

 

 

 

1.28

%

 

 

2,839,376

 

 

 

9,618

 

 

 

1.34

%

Federal Home Loan Bank advances

 

 

371,730

 

 

 

1,917

 

 

 

2.05

%

 

 

530,055

 

 

 

2,771

 

 

 

2.07

%

Other borrowed funds

 

 

80,039

 

 

 

759

 

 

 

3.76

%

 

 

70,080

 

 

 

802

 

 

 

4.54

%

Total borrowings

 

 

451,769

 

 

 

2,676

 

 

 

2.35

%

 

 

600,135

 

 

 

3,573

 

 

 

2.36

%

Total interest-bearing liabilities

 

$

3,347,434

 

 

$

12,001

 

 

 

1.42

%

 

$

3,439,511

 

 

$

13,191

 

 

 

1.52

%

Non-interest-bearing demand deposits

 

 

1,288,960

 

 

 

 

 

 

 

 

 

 

 

1,223,556

 

 

 

 

 

 

 

 

 

Other liabilities

 

 

44,907

 

 

 

 

 

 

 

 

 

 

 

42,914

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

745,745

 

 

 

 

 

 

 

 

 

 

 

729,781

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND

   STOCKHOLDERS’ EQUITY

 

$

5,427,046

 

 

 

 

 

 

 

 

 

 

$

5,435,762

 

 

 

 

 

 

 

 

 

Net interest spread(3)

 

 

 

 

 

 

 

 

 

 

3.86

%

 

 

 

 

 

 

 

 

 

 

4.15

%

Net interest income

 

 

 

 

 

$

53,914

 

 

 

 

 

 

 

 

 

 

$

57,838

 

 

 

 

 

Net interest margin(4)

 

 

 

 

 

 

 

 

 

 

4.32

%

 

 

 

 

 

 

 

 

 

 

4.62

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loan accretion impact on margin

 

 

 

 

 

$

5,418

 

 

 

0.43

%

 

 

 

 

 

$

7,703

 

 

 

0.62

%

 

(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.

 


 

 


Byline Bancorp, Inc.

Page 4 of 22

Net interest income for the fourth quarter of 2019 was $53.9 million, a decrease of $3.9 million, or 6.8%, from $57.8 million for the third quarter of 2019.

The decrease in net interest income was primarily due to:

 

A decrease of $5.2 million in interest and fees on loans and leases, mainly due to a $2.3 million decrease in accretion income on acquired loans and lower average yields on loans as a result of decreases in short-term rates in September and October 2019.

Partially offset by:

 

A decrease of $854,000 in interest expense on Federal Home Loan Bank advances, mostly due to a decrease in average advances during the quarter as average lower-cost deposits grew; and

 

A decrease of $293,000 in interest expense on deposits, as a result of lower average time deposit balances and cost attributable to maturities of higher-rate time deposits.

 

Net interest margin for the fourth quarter of 2019 was 4.32%, a decrease of 30 basis points compared to 4.62% for the third quarter of 2019. Total net accretion income on acquired loans contributed 43 basis points to the net interest margin for the fourth quarter of 2019 compared to 62 basis points for the third quarter of 2019, a decrease of 19 basis points. The net interest margin decrease during the fourth quarter of 2019 was primarily driven by decreased loan and lease yields largely resulting from decreased loan accretion income and decreases in short-term rates.

 

The average cost of total deposits was 0.88% for the fourth quarter of 2019, a decrease of six basis points compared to the third quarter of 2019, mainly due to a favorable change in deposit mix and a lower average cost of time deposits.  Average non-interest-bearing demand deposits, money market accounts, and interest-bearing checking accounts grew by $65.4 million, $54.8 million, and $40.9 million, respectively, while average time deposits decreased by $38.4 million.

Provision for Loan and Lease Losses

The provision for loan and lease losses was $4.4 million for the fourth quarter of 2019, a decrease of $1.5 million compared to $5.9 million for the third quarter of 2019.  The fourth quarter included allocations of $3.2 million for originated loans and leases, $524,000 for acquired non-impaired loans, and $694,000 for acquired impaired loans.  The provision during the fourth quarter of 2019 for originated loans reflects growth in that portfolio, particularly the unguaranteed portion of government guaranteed loans.  

 


Byline Bancorp, Inc.

Page 5 of 22

Non-interest Income

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

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

(dollars in thousands)

 

2019

 

 

2019

 

 

2019

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

NON-INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges on

   deposits

 

$

1,635

 

 

$

1,612

 

 

$

1,441

 

 

$

1,770

 

 

$

1,852

 

 

$

6,458

 

 

$

6,445

 

Loan servicing revenue

 

 

2,834

 

 

 

2,692

 

 

 

2,630

 

 

 

2,539

 

 

 

2,667

 

 

 

10,695

 

 

 

10,272

 

Loan servicing asset revaluation

 

 

(2,545

)

 

 

(1,610

)

 

 

(1,223

)

 

 

(1,261

)

 

 

(2,862

)

 

 

(6,639

)

 

 

(9,269

)

ATM and interchange fees

 

 

1,150

 

 

 

973

 

 

 

945

 

 

 

717

 

 

 

1,010

 

 

 

3,785

 

 

 

4,313

 

Net gains on sales of securities

   available-for-sale

 

 

 

 

 

178

 

 

 

973

 

 

 

 

 

 

160

 

 

 

1,151

 

 

 

164

 

Change in fair value of equity

   securities, net

 

 

381

 

 

 

(15

)

 

 

551

 

 

 

499

 

 

 

 

 

 

1,416

 

 

 

 

Net gains on sales of loans

 

 

8,735

 

 

 

9,405

 

 

 

7,472

 

 

 

6,233

 

 

 

9,337

 

 

 

31,845

 

 

 

31,551

 

Wealth management and trust

   income

 

 

704

 

 

 

653

 

 

 

626

 

 

 

595

 

 

 

679

 

 

 

2,578

 

 

 

1,545

 

Other non-interest income

 

 

1,622

 

 

 

918

 

 

 

768

 

 

 

896

 

 

 

1,447

 

 

 

4,204

 

 

 

5,505

 

Total non-interest income

 

$

14,516

 

 

$

14,806

 

 

$

14,183

 

 

$

11,988

 

 

$

14,290

 

 

$

55,493

 

 

$

50,526

 

 

Non-interest income for the fourth quarter of 2019 was $14.5 million, a decrease of $290,000, or 2.0%, compared to $14.8 million for the third quarter of 2019.

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

 

An increase of $935,000 in loan servicing asset revaluation, reflecting an unfavorable change in fair value of the servicing asset as a result of increased prepayments and discount rates; and

 

A decrease of $670,000 in net gains on sales of loans, mainly due to a decrease in average premium on sales of government guaranteed loans.

 

 

Partially offset by:

 

An increase of $704,000 in other non-interest income, mostly due to a favorable swap valuation adjustment and increased swap activity; and

 

An increase in the change in fair value of equity securities, net, of $396,000 due to an increase in the fair value of those securities.

 

 

During the fourth quarter of 2019, the Company sold $101.5 million of U.S. government guaranteed loans compared to $93.3 million during the third quarter of 2019. The increase in sales is principally due to the timing of loans closed becoming fully funded.

 


Byline Bancorp, Inc.

Page 6 of 22

Non-interest Expense

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

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

(dollars in thousands)

 

2019

 

 

2019

 

 

2019

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

NON-INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

$

24,228

 

 

$

24,537

 

 

$

23,652

 

 

$

22,892

 

 

$

21,548

 

 

$

95,309

 

 

$

80,382

 

Occupancy expense, net

 

 

4,306

 

 

 

3,745

 

 

 

4,337

 

 

 

4,280

 

 

 

4,027

 

 

 

16,668

 

 

 

15,829

 

Equipment expense

 

 

935

 

 

 

767

 

 

 

732

 

 

 

669

 

 

 

641

 

 

 

3,103

 

 

 

2,419

 

Loan and lease related expenses

 

 

2,648

 

 

 

1,949

 

 

 

1,841

 

 

 

1,577

 

 

 

2,223

 

 

 

8,015

 

 

 

6,109

 

Legal, audit and other professional

   fees

 

 

2,340

 

 

 

4,066

 

 

 

2,981

 

 

 

2,066

 

 

 

2,746

 

 

 

11,453

 

 

 

11,373

 

Data processing

 

 

2,678

 

 

 

4,062

 

 

 

3,849

 

 

 

3,144

 

 

 

2,846

 

 

 

13,733

 

 

 

18,242

 

Net loss (gain) recognized on other

   real estate owned and other

   related expenses

 

 

122

 

 

 

95

 

 

 

252

 

 

 

196

 

 

 

48

 

 

 

665

 

 

 

235

 

Regulatory assessments

 

 

157

 

 

 

228

 

 

 

371

 

 

 

(59

)

 

 

462

 

 

 

697

 

 

 

1,744

 

Other intangible assets

   amortization expense

 

 

2,003

 

 

 

2,003

 

 

 

1,959

 

 

 

1,773

 

 

 

1,834

 

 

 

7,738

 

 

 

5,629

 

Advertising and promotions

 

 

1,114

 

 

 

843

 

 

 

732

 

 

 

709

 

 

 

590

 

 

 

3,398

 

 

 

1,723

 

Telecommunications

 

 

488

 

 

 

474

 

 

 

537

 

 

 

464

 

 

 

391

 

 

 

1,963

 

 

 

1,710

 

Other non-interest expense

 

 

2,675

 

 

 

2,679

 

 

 

2,711

 

 

 

2,968

 

 

 

2,732

 

 

 

11,033

 

 

 

9,501

 

Total non-interest expense

 

$

43,694

 

 

$

45,448

 

 

$

43,954

 

 

$

40,679

 

 

$

40,088

 

 

$

173,775

 

 

$

154,896

 

 

Non-interest expense for the fourth quarter of 2019 was $43.7 million, a decrease of $1.8 million, or 3.9%, from $45.4 million for the third quarter of 2019.

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

 

A decrease of $1.7 million in legal, audit and other professional fees, as the prior quarter reflected $1.5 million of non-recurring professional services costs;

 

A decrease of $1.4 million in data processing expense, mostly due to expenses associated with our Oak Park River Forest core system conversion during the prior quarter; and

 

A decrease of $309,000 in salaries and employee benefits, as the prior quarter included acquisition related salary and employee benefit costs.  

 

Partially offset by:

 

An increase of $699,000 in loan and lease related expenses due to higher loan expenses on government guaranteed loans;

 

An increase of $561,000 in occupancy expense, net, largely due to a favorable accrual adjustment to property tax expense in the prior quarter as well as an increase in rental expense related to office expansion; and

 

 

An increase of $271,000 in advertising and promotions expense due to additional media advertisement during the quarter.

 

The Company’s efficiency ratio was 60.93% for the fourth quarter of 2019, compared with 59.81% for the third quarter of 2019. Excluding merger-related expenses, core system conversion expenses, and impairment charges on assets held for sale, the Company’s adjusted efficiency ratio1 was 60.51% for the fourth quarter of 2019, compared with 58.17% for the third quarter of 2019.

 

(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 7 of 22

INCOME TAXES

The Company recorded income tax expense of $4.5 million during the fourth quarter of 2019, an effective tax rate of 22.1%, compared to $5.9 million during the third quarter of 2019, an effective tax rate of 27.9%.  The decrease in the effective tax rate was due to tax benefits recorded as a result of the recognition of tax assets associated with other real estate owned.

STATEMENTS OF FINANCIAL CONDITION

Total assets were $5.5 billion at December 31, 2019, an increase of $83.5 million compared to $5.4 billion at September 30, 2019, and an increase of $579.2 million compared to $4.9 billion at December 31, 2018.

The current quarter increase was primarily due to:

 

An increase in securities of $154.7 million, reflecting purchases of mortgage-backed securities during the quarter;

 

An increase in loans held for sale of $4.6 million, largely due to the timing of loan originations during the quarter; and

 

An increase in other real estate owned of $3.4 million due to the volume of transfers in exceeding sales.

 

Partially offset by:

 

A decrease in loans and leases of $45.4 million, mostly due to a decrease of $112.9 million in our acquired loan portfolio, partially offset by an increase of $67.5 million in our originated loan portfolio; and

 

A decrease in cash and cash equivalents of $28.1 million due to the redeployment of cash into earning assets.

 

 


Byline Bancorp, Inc.

Page 8 of 22

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

 

December 31, 2019

 

 

September 30, 2019

 

 

December 31, 2018

 

(dollars in thousands)

 

Amount

 

 

% of Total

 

 

Amount

 

 

% of Total

 

 

Amount

 

 

% of Total

 

Originated loans and leases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

792,263

 

 

 

20.9

%

 

$

772,559

 

 

 

20.2

%

 

$

652,234

 

 

 

18.6

%

Residential real estate

 

 

483,072

 

 

 

12.8

%

 

 

497,839

 

 

 

13.0

%

 

 

466,309

 

 

 

13.3

%

Construction, land development, and

   other land

 

 

235,794

 

 

 

6.2

%

 

 

236,780

 

 

 

6.2

%

 

 

144,128

 

 

 

4.1

%

Commercial and industrial

 

 

1,160,996

 

 

 

30.7

%

 

 

1,096,400

 

 

 

28.6

%

 

 

803,508

 

 

 

22.9

%

Installment and other

 

 

5,372

 

 

 

0.1

%

 

 

7,818

 

 

 

0.2

%

 

 

11,718

 

 

 

0.3

%

Leasing financing receivables

 

 

158,155

 

 

 

4.2

%

 

 

156,758

 

 

 

4.1

%

 

 

159,901

 

 

 

4.6

%

Total originated loans and leases

 

$

2,835,652

 

 

 

74.9

%

 

$

2,768,154

 

 

 

72.3

%

 

$

2,237,798

 

 

 

63.8

%

Acquired impaired loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

135,914

 

 

 

3.6

%

 

$

142,435

 

 

 

3.7

%

 

$

146,808

 

 

 

4.2

%

Residential real estate

 

 

100,223

 

 

 

2.7

%

 

 

109,409

 

 

 

2.9

%

 

 

113,934

 

 

 

3.3

%

Construction, land development, and

   other land

 

 

5,373

 

 

 

0.1

%

 

 

4,562

 

 

 

0.1

%

 

 

3,779

 

 

 

0.1

%

Commercial and industrial

 

 

16,909

 

 

 

0.4

%

 

 

18,349

 

 

 

0.5

%

 

 

12,617

 

 

 

0.4

%

Installment and other

 

 

249

 

 

 

0.0

%

 

 

267

 

 

 

0.0

%

 

 

404

 

 

 

0.0

%

Total acquired impaired loans

 

$

258,668

 

 

 

6.8

%

 

$

275,022