Toggle SGML Header (+)


Section 1: 8-K (8-K FOR 1ST QUARTER 2020 EARNINGS RELEASE)

by-8k_20200430.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): April 30, 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.  

 


 

Item 2.02.

Results of Operations and Financial Condition.

On April 30, 2020, Byline Bancorp, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2020. 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

  

First Quarter 2020 Financial Results Press Release, dated April 30, 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.

 

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

 

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

 

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

 

 

2


 

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: April 30, 2020

 

 

 

By:

/s/ Alberto J. Paracchini

 

 

 

 

Name:

Alberto J. Paracchini

 

 

 

 

Title:

President and Chief Executive Officer

 

 

 

3

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

by-ex991_6.htm

EX-99.1

 

                                      

 

Byline Bancorp, Inc. Reports First Quarter 2020 Financial Results

 

First Quarter 2020 Highlights

 

Net income of $3.0 million, or $0.07 per diluted share

 

Increase in provision of $0.26 per diluted share compared to prior quarter

 

Decrease in gain on sale of loans of $0.10 per diluted share compared to prior quarter

 

Net interest margin of 4.17%

 

Return on average assets of 0.21%

 

Efficiency ratio of 67.16% for the first quarter of 2020

 

Originated loans and leases increased $149.0 million, or 5.3%, from December 31, 2019

 

Total assets of $5.7 billion

 

Common Equity Tier 1 to risk weighted assets of 12.24%

 

Chicago, IL, April 30, 2020 – Byline Bancorp, Inc. (the “Company” or “Byline”)(NYSE: BY), the parent company of Byline Bank (the “Bank”), today reported net income of $3.0 million, or $0.07 per diluted share, for the first quarter of 2020, compared with net income of $15.9 million, or $0.41 per diluted share, for the fourth quarter of 2019, and net income of $12.6 million, or $0.34 per diluted share, for the first quarter of 2019.

Adjusted net income, which is net income excluding merger-related expenses, core system conversion expenses, and impairment charges on assets held for sale, net of tax, was $3.5 million, or $0.09 per adjusted diluted share1, for the first quarter of 2020, compared with $16.1 million, or $0.42 per adjusted diluted share, for the fourth quarter of 2019, and $14.0 million, or $0.38 per adjusted diluted share, for the first quarter of 2019. 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, “Since the emergence of the COVID-19 pandemic, we have been focused on protecting the health and safety of our employees and clients, while constructively working with our borrowers to identify the best solutions for helping them manage through this crisis.  We have put in place a number of relief programs to support our clients, including participating in the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”).  As one of the largest SBA lenders in the country, we were able to provide our clients with access to the PPP, and through April 29th, we have received approvals on $716.4 million in PPP loans with $385.8 million funded to date.  I’m proud of the work our team did during this challenging time to establish our PPP process and support our clients.”

 

“Although the duration and severity of the COVID-19 pandemic is uncertain, we are well positioned from a capital and liquidity standpoint to support our clients and the communities we serve during this unprecedented period.  Byline is committed to being a source of strength to our customers, employees, and communities during this uncertain time,” said Mr. Paracchini.

 

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 21

 

Byline’s Preparations and Response to Pandemic

As part of our ongoing business continuity and risk management efforts, we had previously developed a detailed plan and action measures related to a possible pandemic scenario. Our incident response team was activated on February 29, 2020 and began implementing our plan. We initiated a series of measures to ensure the safety of employees, customers, and communities, to support customer needs, and to limit operational disruptions.  Our Board of Directors and management teams continue to monitor and, when appropriate, make changes to our planned response. To date we have:

 

Maximized social distancing protocols by augmenting business hours and the locations of employee teams.

 

100% of our non-retail employees have the ability to work from home.

 

Drive-thru only locations for 25 branches, 16 full service branches with lobby hours by appointment, and 19 branches temporarily closed.

 

Refreshed and analyzed our liquidity, funding, and capital stress forecasts including updated risk assumptions.

 

Proactively engaged our customers and borrowers to identify short-term cash flow and other financial needs.

 

Approved approximately $395.7 million in payment deferrals to date, or 10.3% of loans and leases at March 31, 2020.

 

Established customer strategy to process PPP loans efficiently through our existing SBA platform.

 

Registered over 1,400 loans totaling $372.7 million during phase one.

 

Phase two began on April 27, 2020, with over 2,150 loans registered representing $343.7 million.

 

Waived or refunded certain fees, including early withdrawal fees on time deposits.

 

Took action to pause common share repurchase activities amid the uncertainty of the pandemic.

 

Continued to serve our customers through our call center, online, and mobile banking platforms.


 


Byline Bancorp, Inc.

Page 3 of 21

 

STATEMENTS OF OPERATIONS

Net Interest Income

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

 

Three Months Ended

 

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

(dollars in thousands)

 

2020

 

 

2019

 

 

2019

 

 

2019

 

 

2019

 

INTEREST AND DIVIDEND INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans and

   leases

 

$

54,158

 

 

$

58,203

 

 

$

63,391

 

 

$

59,524

 

 

$

54,383

 

Interest on securities

 

 

8,016

 

 

 

7,212

 

 

 

7,040

 

 

 

6,665

 

 

 

6,102

 

Other interest and dividend

   income

 

 

992

 

 

 

500

 

 

 

598

 

 

 

571

 

 

 

625

 

Total interest and dividend

   income

 

 

63,166

 

 

 

65,915

 

 

 

71,029

 

 

 

66,760

 

 

 

61,110

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

7,804

 

 

 

9,325

 

 

 

9,618

 

 

 

9,306

 

 

 

8,076

 

Short-term borrowings

 

 

1,897

 

 

 

1,989

 

 

 

2,835

 

 

 

2,265

 

 

 

2,166

 

Junior subordinated debentures issued to

   capital trusts

 

 

640

 

 

 

687

 

 

 

738

 

 

 

741

 

 

 

783

 

Total interest expense

 

 

10,341

 

 

 

12,001

 

 

 

13,191

 

 

 

12,312

 

 

 

11,025

 

Net interest income

 

$

52,825

 

 

$

53,914

 

 

$

57,838

 

 

$

54,448

 

 

$

50,085

 

 

 


Byline Bancorp, Inc.

Page 4 of 21

The following table presents the average interest-earning assets and average interest-bearing liabilities for the periods indicated:

 

For the Three Months Ended

 

 

 

March 31, 2020

 

 

December 31, 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

 

$

38,934

 

 

$

157

 

 

 

1.63

%

 

$

38,624

 

 

$

220

 

 

 

2.25

%

Loans and leases(1)

 

 

3,799,213

 

 

 

54,158

 

 

 

5.73

%

 

 

3,807,731

 

 

 

58,203

 

 

 

6.06

%

Taxable securities

 

 

1,175,120

 

 

 

8,316

 

 

 

2.85

%

 

 

1,025,975

 

 

 

6,963

 

 

 

2.69

%

Tax-exempt securities(2)

 

 

84,679

 

 

 

535

 

 

 

2.54

%

 

 

84,640

 

 

 

529

 

 

 

2.48

%

Total interest-earning assets

 

$

5,097,946

 

 

$

63,166

 

 

 

4.98

%

 

$

4,956,970

 

 

$

65,915

 

 

 

5.28

%

Allowance for loan and lease losses

 

 

(33,664

)

 

 

 

 

 

 

 

 

 

 

(32,688

)

 

 

 

 

 

 

 

 

All other assets

 

 

501,670

 

 

 

 

 

 

 

 

 

 

 

502,764

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

5,565,952

 

 

 

 

 

 

 

 

 

 

$

5,427,046

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’

   EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest checking

 

$

338,905

 

 

$

260

 

 

 

0.31

%

 

$

399,065

 

 

$

612

 

 

 

0.61

%

Money market accounts

 

 

962,205

 

 

 

2,214

 

 

 

0.93

%

 

 

790,565

 

 

 

1,945

 

 

 

0.98

%

Savings

 

 

480,270

 

 

 

61

 

 

 

0.05

%

 

 

474,394

 

 

 

63

 

 

 

0.05

%

Time deposits

 

 

1,113,596

 

 

 

5,269

 

 

 

1.90

%

 

 

1,231,641

 

 

 

6,705

 

 

 

2.16

%

Total interest-bearing

   deposits

 

 

2,894,976

 

 

 

7,804

 

 

 

1.08

%

 

 

2,895,665

 

 

 

9,325

 

 

 

1.28

%

Short-term borrowings

 

 

521,108

 

 

 

1,897

 

 

 

1.46

%

 

 

414,515

 

 

 

1,989

 

 

 

1.90

%

Junior subordinated debentures

    issued to capital trusts

 

 

37,385

 

 

 

640

 

 

 

6.88

%

 

 

37,254

 

 

 

687

 

 

 

7.32

%

Total borrowings

 

 

558,493

 

 

 

2,537

 

 

 

1.83

%

 

 

451,769

 

 

 

2,676

 

 

 

2.35

%

Total interest-bearing liabilities

 

$

3,453,469

 

 

$

10,341

 

 

 

1.20

%

 

$

3,347,434

 

 

$

12,001

 

 

 

1.42

%

Non-interest-bearing demand deposits

 

 

1,298,800

 

 

 

 

 

 

 

 

 

 

 

1,288,960

 

 

 

 

 

 

 

 

 

Other liabilities

 

 

48,256

 

 

 

 

 

 

 

 

 

 

 

44,907

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

765,427

 

 

 

 

 

 

 

 

 

 

 

745,745

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND

   STOCKHOLDERS’ EQUITY

 

$

5,565,952

 

 

 

 

 

 

 

 

 

 

$

5,427,046

 

 

 

 

 

 

 

 

 

Net interest spread(3)

 

 

 

 

 

 

 

 

 

 

3.78

%

 

 

 

 

 

 

 

 

 

 

3.86

%

Net interest income

 

 

 

 

 

$

52,825

 

 

 

 

 

 

 

 

 

 

$

53,914

 

 

 

 

 

Net interest margin(4)

 

 

 

 

 

 

 

 

 

 

4.17

%

 

 

 

 

 

 

 

 

 

 

4.32

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loan accretion impact on margin

 

 

 

 

 

$

3,671

 

 

 

0.29

%

 

 

 

 

 

$

5,418

 

 

 

0.43

%

 

 

(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 5 of 21

 

Net interest income for the first quarter of 2020 was $52.8 million, a decrease of $1.1 million, or 2.0%, from $53.9 million for the fourth quarter of 2019.

The decrease in net interest income was primarily due to:

 

A decrease of $4.0 million in interest and fees on loans and leases, mainly due to a $1.7 million decrease in accretion income on acquired loans.

Partially offset by:

 

A decrease of $1.5 million in interest expense on deposits, as a result of lower average time deposit balances and cost attributable to maturities of higher-rate time deposits; and

 

An increase of $1.3 million in interest income on securities principally as a result of purchases of mortgage-backed securities during the quarter.

Net interest margin for the first quarter of 2020 was 4.17%, a decrease of 15 basis points compared to 4.32% for the fourth quarter of 2019. Total net accretion income on acquired loans contributed 29 basis points to the net interest margin for the first quarter of 2020 compared to 43 basis points for the fourth quarter of 2019, a decrease of 14 basis points. The net interest margin decrease during the first quarter of 2020 was primarily driven by decreased loan and lease yields largely resulting from decreased loan accretion income partly offset by a decrease in the cost of funds as a result of decreases in short-term rates.

 

The average cost of total deposits was 0.75% for the first quarter of 2020, a decrease of 13 basis points compared to the fourth quarter of 2019, mainly due to a lower average cost of time deposits and interest-bearing checking accounts as well as a favorable change in deposit mix.  Average money market accounts grew by $171.6 million while average time deposits decreased by $118.0 million.

Provision for Loan and Lease Losses

The provision for loan and lease losses was $14.5 million for the first quarter of 2020, an increase of $10.1 million compared to $4.4 million for the fourth quarter of 2019.  The first quarter included allocations of $10.3 million for originated loans and leases, $2.7 million for acquired non-impaired loans, and $1.5 million for acquired impaired loans.  The provision during the first quarter of 2020 for originated loans reflects increased impairments on commercial and industrial and commercial real estate loans, growth in the commercial and industrial portfolio during the quarter, and allocations of $6.3 million made to address the impact of the COVID-19 pandemic.  

 


Byline Bancorp, Inc.

Page 6 of 21

 

Non-interest Income

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

 

Three Months Ended

 

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

(dollars in thousands)

 

2020

 

 

2019

 

 

2019

 

 

2019

 

 

2019

 

NON-INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges on deposits

 

$

1,673

 

 

$

1,635

 

 

$

1,612

 

 

$

1,441

 

 

$

1,770

 

Loan servicing revenue

 

 

2,758

 

 

 

2,834

 

 

 

2,692

 

 

 

2,630

 

 

 

2,539

 

Loan servicing asset revaluation

 

 

(3,064

)

 

 

(2,545

)

 

 

(1,610

)

 

 

(1,223

)

 

 

(1,261

)

ATM and interchange fees

 

 

1,216

 

 

 

1,150

 

 

 

973

 

 

 

945

 

 

 

717

 

Net gains on sales of securities

   available-for-sale

 

 

1,375

 

 

 

 

 

 

178

 

 

 

973

 

 

 

 

Change in fair value of equity

   securities, net

 

 

(619

)

 

 

381

 

 

 

(15

)

 

 

551

 

 

 

499

 

Net gains on sales of loans

 

 

4,773

 

 

 

8,735

 

 

 

9,405

 

 

 

7,472

 

 

 

6,233

 

Wealth management and trust income

 

 

669

 

 

 

704

 

 

 

653

 

 

 

626

 

 

 

595

 

Other non-interest income

 

 

392

 

 

 

1,622

 

 

 

918

 

 

 

768

 

 

 

896

 

Total non-interest income

 

$

9,173

 

 

$

14,516

 

 

$

14,806

 

 

$

14,183

 

 

$

11,988

 

 

Non-interest income for the first quarter of 2020 was $9.2 million, a decrease of $5.3 million, or 36.8%, compared to $14.5 million for the fourth quarter of 2019.

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

 

A decrease of $4.0 million in net gains on sales of loans, mainly due to a decrease in volume of sales of government guaranteed loans;

 

 

A decrease of $1.2 million in other non-interest income, mostly due to a decline in the fair value of non-designated swaps; and

 

A decrease in the change in fair value of equity securities, net, of $1.0 million due to a decrease in the fair value of those securities.

 

Partially offset by:

 

An increase of $1.4 million in net gains on sales of securities available-for-sale as a result of sales during the quarter compared to no sales in the prior quarter.

 

During the first quarter of 2020, the Company sold $61.0 million of U.S. government guaranteed loans compared to $101.5 million during the fourth quarter of 2019. The decrease in sales is principally driven by a decrease in originations as well as a decrease in premiums as a result of the COVID-19 pandemic.

 


Byline Bancorp, Inc.

Page 7 of 21

 

Non-interest Expense

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

 

Three Months Ended

 

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

(dollars in thousands)

 

2020

 

 

2019

 

 

2019

 

 

2019

 

 

2019

 

NON-INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

$

24,666

 

 

$

24,228

 

 

$

24,537

 

 

$

23,652

 

 

$

22,892

 

Occupancy and equipment expense, net

 

 

5,524

 

 

 

5,241

 

 

 

4,512

 

 

 

5,069

 

 

 

4,949

 

Loan and lease related expenses

 

 

1,311

 

 

 

2,648

 

 

 

1,949

 

 

 

1,841

 

 

 

1,577

 

Legal, audit and other professional fees

 

 

2,334

 

 

 

2,340

 

 

 

4,066

 

 

 

2,981

 

 

 

2,066

 

Data processing

 

 

2,665

 

 

 

2,678

 

 

 

4,062

 

 

 

3,849

 

 

 

3,144

 

Net loss recognized on other

   real estate owned and other

   related expenses

 

 

519

 

 

 

122

 

 

 

95

 

 

 

252

 

 

 

196

 

Other intangible assets

   amortization expense

 

 

1,893

 

 

 

2,002

 

 

 

2,003

 

 

 

1,959

 

 

 

1,773

 

Other non-interest expense

 

 

4,615

 

 

 

4,435

 

 

 

4,224

 

 

 

4,351

 

 

 

4,082

 

Total non-interest expense

 

$

43,527

 

 

$

43,694

 

 

$

45,448

 

 

$

43,954

 

 

$

40,679

 

 

Non-interest expense for the first quarter of 2020 was $43.5 million, a decrease of $167,000, or 0.4%, from $43.7 million for the fourth quarter of 2019.

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

 

A decrease of $1.3 million in loan and lease related expenses due to lower loan expenses on government guaranteed loans and lower loan collection expense.

Partially offset by:

 

An increase of $438,000 in salaries and employee benefits, mainly due to higher payroll taxes and increased employer costs related to benefits, partially offset by a decrease in commissions; and

 

An increase of $397,000 in net loss recognized on other real estate owned and other related expenses mostly due to a decrease in gains recognized on other real estate owned, partially offset by lower real estate tax expenses.

The Company’s efficiency ratio was 67.16% for the first quarter of 2020, compared with 60.93% for the fourth 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 66.00% for the first quarter of 2020, compared with 60.51% for the fourth quarter of 2019.  The increase in the efficiency ratio was primarily driven by the decline in non-interest income.

 

 

 

 

 

 

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 21

 

INCOME TAXES

The Company recorded income tax expense of $1.1 million during the first quarter of 2020, an effective tax rate of 26.1%, compared to $4.5 million during the fourth quarter of 2019, an effective tax rate of 22.1%.  The effective tax rate during the fourth quarter of 2019 benefited from the recognition of tax assets associated with other real estate owned.

STATEMENTS OF FINANCIAL CONDITION

Total assets were $5.7 billion at March 31, 2020, an increase of $212.9 million compared to $5.5 billion at December 31, 2019, and an increase of $724.8 million compared to $5.0 billion at March 31, 2019.  The increase from March 31, 2019 was mostly due to the assets acquired through the Oak Park River Forest acquisition.

The current quarter increase was primarily due to:

 

An increase in securities of $112.6 million, reflecting purchases of securities during the quarter; and

 

An increase in loans and leases of $74.6 million, mostly due to an increase of $149.0 million in our originated loan portfolio, partially offset by a decrease of $74.4 million in our acquired loan portfolios as a result of paydowns.

 

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

 

March 31, 2020

 

 

December 31, 2019

 

 

March 31, 2019

 

(dollars in thousands)

 

Amount

 

 

% of Total

 

 

Amount

 

 

% of Total

 

 

Amount

 

 

% of Total

 

Originated loans and leases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

839,244

 

 

 

21.7

%

 

$

792,263

 

 

 

20.9

%

 

$

738,832

 

 

 

20.7

%

Residential real estate

 

 

480,946

 

 

 

12.5

%

 

 

483,072

 

 

 

12.8

%

 

 

494,877

 

 

 

13.9

%

Construction, land development, and

   other land

 

 

242,001

 

 

 

6.3

%

 

 

235,794

 

 

 

6.2

%

 

 

181,427

 

 

 

5.1

%

Commercial and industrial

 

 

1,263,688

 

 

 

32.7

%

 

 

1,160,996

 

 

 

30.7

%

 

 

900,709

 

 

 

25.2

%

Installment and other

 

 

4,594

 

 

 

0.1

%

 

 

5,372

 

 

 

0.1

%

 

 

11,082

 

 

 

0.3

%

Leasing financing receivables

 

 

154,173

 

 

 

4.0

%

 

 

158,155

 

 

 

4.2

%

 

 

160,607

 

 

 

4.5

%

Total originated loans and leases

 

$

2,984,646

 

 

 

77.3

%

 

$

2,835,652

 

 

 

74.9

%

 

$

2,487,534

 

 

 

69.7

%

Acquired impaired loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

127,895

 

 

 

3.3

%

 

$

135,914

 

 

 

3.6

%

 

$

141,199

 

 

 

4.0

%

Residential real estate

 

 

94,198

 

 

 

2.5

%

 

 

100,223

 

 

 

2.7

%

 

 

106,764

 

 

 

3.0

%

Construction, land development, and

   other land

 

 

5,291

 

 

 

0.1

%

 

 

5,373

 

 

 

0.1

%

 

 

3,111

 

 

 

0.1

%

Commercial and industrial

 

 

15,808

 

 

 

0.4

%

 

 

16,909

 

 

 

0.4

%

 

 

11,963

 

 

 

0.3

%

Installment and other

 

 

236

 

 

 

0.0

%

 

 

249

 

 

 

0.0

%

 

 

374

 

 

 

0.0

%

Total acquired impaired loans

 

$

243,428

 

 

 

6.3

%

 

$

258,668

 

 

 

6.8

%

 

$

263,411

 

 

 

7.4

%

Acquired non-impaired loans and leases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

327,820

 

 

 

8.5

%

 

$

348,365

 

 

 

9.2

%

 

$

382,252

 

 

 

10.7

%

Residential real estate

 

 

118,853

 

 

 

3.1

%

 

 

128,527

 

 

 

3.4

%

 

 

97,395

 

 

 

2.8

%

Construction, land development, and

   other land

 

 

30,484

 

 

 

0.8

%

 

 

37,490

 

 

 

1.0

%

 

 

29,121

 

 

 

0.8

%

Commercial and industrial

 

 

135,063

 

 

 

3.5

%

 

 

153,660

 

 

 

4.1

%

 

 

277,146

 

 

 

7.8

%

Installment and other

 

 

891

 

 

 

0.0

%

 

 

944

 

 

 

0.0

%

 

 

1,346

 

 

 

0.0

%

Leasing financing receivables

 

 

19,074

 

 

 

0.5

%

 

 

22,355

 

 

 

0.6

%

 

 

29,361

 

 

 

0.8

%

Total acquired non-impaired loans

   and leases

 

$

632,185

 

 

 

16.4

%

 

$

691,341

 

 

 

18.3

%

 

$

816,621

 

 

 

22.9

%

Total loans and leases

 

$

3,860,259

 

 

 

100.0

%

 

$

3,785,661

 

 

 

100.0

%

 

$

3,567,566

 

 

 

100.0

%

Allowance for loan and lease losses

 

 

(41,840

)

 

 

 

 

 

 

(31,936

)

 

 

 

 

 

 

(27,106

)

 

 

 

 

Total loans and leases, net of allowance for

   loan and lease losses

 

$

3,818,419

 

 

 

 

 

 

$

3,753,725

 

 

 

 

 

 

$

3,540,460

 

 

 

 

 

 


Byline Bancorp, Inc.

Page 9 of 21

 

ASSET QUALITY

Non-Performing Assets

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

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

(dollars in thousands)

 

2020

 

 

2019

 

 

2019

 

 

2019

 

 

2019

 

Non-performing assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans and leases

 

$

48,964

 

 

$

36,272

 

 

$

39,528

 

 

$

34,027

 

 

$

28,539

 

Past due loans and leases 90 days or more

   and still accruing interest

 

 

 

 

 

 

 

 

 

 

 

996

 

 

 

 

Accruing troubled debt restructured loans

 

 

1,725

 

 

 

1,771

 

 

 

2,204

 

 

 

1,529

 

 

 

1,921

 

Total non-performing loans and leases

 

 

50,689

 

 

 

38,043

 

 

 

41,732

 

 

 

36,552

 

 

 

30,460

 

Other real estate owned

 

 

9,273