Q2 2022 Conference Call BY Byline Bancorp, Inc. BY LISTED NYSE 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'', ''migh ...

Financial Performance - Net income was $223 million, or $058 per diluted share, compared to $172 million, or $045 per diluted share, in 4Q21[5] - Pre-Tax Pre-Provision was $336 million, with a Pre-Tax Pre-Provision ROAA of 203%, improved 74 bps from 129% in 4Q21[5] - ROAA was 135% and ROTCE was 1436%[5] Balance Sheet Trends - Total loans and leases ex PPP increased $3394 million, or 312% annualized, linked quarter and increased 238% YoY[5] - Total deposits increased $3751 million, or 295% annualized, to $55 billion[16] - Non-interest bearing deposits represented 413% of total deposits[6, 16] Net Interest Margin - Net interest margin (FTE) decreased 15 bps to 382% from 397% in 4Q21[5] - NIM excluding accretion decreased 16 bps to 371% from 4Q21, primarily due to lower loan fees and lower volume of PPP forgiveness[5] - Net interest income was $587 million, down 48% from 4Q21[20] Asset Quality - NPLs (ex gov gtd) declined from 044% to 039% in 1Q22[5] - NCOs declined to 5 bps in 1Q22 from 37 bps in 4Q21[5] - ALLL increased 3 bps to 124% in 1Q22 from 121% in 4Q21 to support growth in the portfolio[5] Government-Guaranteed Lending - Closed $1291 million loan commitments in 1Q22, up 157% YoY[10] - SBA 7(a) portfolio up $146 million to $4782 million from 4Q21; ALLL/Unguaranteed loan balance ~ 74%[10] Capital and Return - CET1 and Total Capital ratios remained solid at 1075% and 1372%[5] - Repurchased 282819 shares of stock during 1Q22[6]

PART I. FINANCIAL INFORMATION This section provides the unaudited interim condensed consolidated financial statements and management's discussion and analysis for Byline Bancorp, Inc [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited interim condensed consolidated financial statements of Byline Bancorp, Inc. and its subsidiaries for the period ended March 31, 2022, including the statements of financial condition, operations, comprehensive income (loss), changes in stockholders' equity, and cash flows, along with detailed notes explaining the basis of presentation, significant accounting policies, and specific financial instrument details [Condensed Consolidated Statements of Financial Condition](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20FINANCIAL%20CONDITION) This statement provides a snapshot of the company's assets, liabilities, and stockholders' equity at specific reporting dates Condensed Consolidated Statements of Financial Condition (dollars in thousands) | (dollars in thousands) | March 31, 2022 | December 31, 2021 | |:-----------------------|:---------------|:------------------| | **ASSETS** | | | | Cash and cash equivalents | $153,579 | $157,931 | | Securities available-for-sale | $1,369,368 | $1,454,542 | | Net loans and leases | $4,729,610 | $4,482,116 | | Total assets | $6,834,636 | $6,696,172 | | **LIABILITIES** | | | | Total deposits | $5,530,102 | $5,155,047 | | Other borrowings | $311,450 | $519,723 | | Total liabilities | $6,045,965 | $5,859,790 | | **STOCKHOLDERS' EQUITY** | | | | Total stockholders' equity | $788,671 | $836,382 | - Total assets increased by **$138.5 million (2.1%)** from December 31, 2021, to March 31, 2022, primarily driven by an increase in net loans and leases[11](index=11&type=chunk)[271](index=271&type=chunk) - Total liabilities increased by **$186.2 million (3.2%)**, mainly due to a **$375.1 million (7.3%)** increase in total deposits, partially offset by a **$208.3 million (40.1%)** decrease in other borrowings[11](index=11&type=chunk)[272](index=272&type=chunk) - Total stockholders' equity decreased by **$47.7 million (5.7%)**, primarily due to increased accumulated other comprehensive loss, preferred stock redemption, and share repurchases, partially offset by an increase in retained earnings[11](index=11&type=chunk)[323](index=323&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) This statement details the company's revenues, expenses, and net income over specific reporting periods Condensed Consolidated Statements of Operations (dollars in thousands, except share and per share data) | (dollars in thousands, except share and per share data) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | |:--------------------------------------------------------|:----------------------------------|:----------------------------------| | Total interest and dividend income | $61,818 | $60,159 | | Total interest expense | $3,082 | $3,519 | | Net interest income | $58,736 | $56,640 | | Provision for loan and lease losses | $4,995 | $4,367 | | Total non-interest income | $19,426 | $15,742 | | Total non-interest expense | $44,555 | $38,842 | | Net income | $22,311 | $21,798 | | Income available to common stockholders | $22,115 | $21,602 | | Basic earnings per common share | $0.60 | $0.57 | | Diluted earnings per common share | $0.58 | $0.56 | - Net income increased by **$513,000 (2.4%)** to **$22.3 million** for the three months ended March 31, 2022, compared to **$21.8 million** in the prior year, driven by higher net interest income and non-interest income, partially offset by increased non-interest expense and provision for loan losses[14](index=14&type=chunk)[205](index=205&type=chunk)[234](index=234&type=chunk) - Diluted EPS increased to **$0.58** in Q1 2022 from **$0.56** in Q1 2021[14](index=14&type=chunk)[206](index=206&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME%20(LOSS)) This statement presents net income and other comprehensive income (loss) components, reflecting changes in equity not from owners Condensed Consolidated Statements of Comprehensive Income (Loss) (dollars in thousands) | (dollars in thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | |:-----------------------|:----------------------------------|:----------------------------------| | Net income | $22,311 | $21,798 | | Total other comprehensive loss | $(48,086) | $(26,394) | | Comprehensive loss | $(25,775) | $(4,596) | - The company reported a comprehensive loss of **$25.8 million** for the three months ended March 31, 2022, significantly higher than the **$4.6 million** loss in the prior year, primarily due to increased unrealized holding losses on securities available-for-sale[16](index=16&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20STOCKHOLDERS'%20EQUITY) This statement outlines the changes in each component of stockholders' equity over the reporting period - Stockholders' equity decreased from **$836.4 million** at January 1, 2022, to **$788.7 million** at March 31, 2022, primarily due to a significant other comprehensive loss of **$48.1 million**, redemption of preferred stock (**$10.4 million**), and common stock repurchases (**$7.6 million**), partially offset by net income of **$22.3 million**[21](index=21&type=chunk)[323](index=323&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This statement categorizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (dollars in thousands) | (dollars in thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | |:-----------------------|:----------------------------------|:----------------------------------| | Net cash provided by operating activities | $92,768 | $15,000 | | Net cash used in investing activities | $(242,803) | $(351,797) |\n| Net cash provided by financing activities | $145,683 | $366,516 | | Net change in cash and cash equivalents | $(4,352) | $29,719 | | Cash and cash equivalents, end of period | $153,579 | $113,139 | - Net cash provided by operating activities significantly increased to **$92.8 million** in Q1 2022 from **$15.0 million** in Q1 2021, largely due to changes in accrued interest receivable and payable[26](index=26&type=chunk) - Net cash used in investing activities decreased to **$242.8 million** in Q1 2022 from **$351.8 million** in Q1 2021, primarily due to lower purchases of available-for-sale securities and a higher net change in loans and leases[26](index=26&type=chunk) - Net cash provided by financing activities decreased to **$145.7 million** in Q1 2022 from **$366.5 million** in Q1 2021, mainly due to lower proceeds from short-term borrowings and the redemption of preferred stock[29](index=29&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements [Note 1—Basis of Presentation](index=10&type=section&id=Note%201%E2%80%94Basis%20of%20Presentation) This note describes the company's structure, accounting principles, and compliance with financial reporting standards - Byline Bancorp, Inc. operates as a bank holding company, with Byline Bank as its primary subsidiary, and presents unaudited interim condensed consolidated financial statements in accordance with GAAP and SEC regulations[32](index=32&type=chunk)[33](index=33&type=chunk) - The Company operates as a single reportable segment, and no subsequent events requiring recognition or disclosure were identified through the issuance date of these financial statements[34](index=34&type=chunk)[35](index=35&type=chunk) [Note 2—Accounting Pronouncements Recently Adopted or Issued](index=10&type=section&id=Note%202%E2%80%94Accounting%20Pronouncements%20Recently%20Adopted%20or%20Issued) This note details the impact of new accounting standards on the company's financial reporting and future adoption plans - The Company adopted ASU No. 2019-12, Simplifying the Accounting for Income Taxes, on January 1, 2022, which did not impact its financial results for the three months ended March 31, 2022[38](index=38&type=chunk) - The Company, as an emerging growth company, will adopt ASU No. 2016-13 (CECL) on December 31, 2022, which may increase the allowance for loan losses by requiring expected credit losses on purchased credit-impaired loans[41](index=41&type=chunk) - The Company approved Term Secured Overnight Financing Rate (SOFR) as an alternative reference rate to LIBOR, with **$1.1 billion** of loans, **$475.8 million** in derivatives, and **$58.3 million** in available-for-sale securities tied to LIBOR at March 31, 2022[41](index=41&type=chunk) [Note 3—Securities](index=12&type=section&id=Note%203%E2%80%94Securities) This note provides details on the company's investment securities, including their fair values and unrealized gains or losses Securities (dollars in thousands) | (dollars in thousands) | March 31, 2022 Fair Value | December 31, 2021 Fair Value | |:-----------------------|:--------------------------|:-----------------------------| | Securities available-for-sale | $1,369,368 | $1,454,542 | | Securities held-to-maturity | $3,906 | $3,992 | - Securities available-for-sale decreased by **$85.2 million (5.9%)** from December 31, 2021, to March 31, 2022, primarily due to decreases in fair value[45](index=45&type=chunk)[274](index=274&type=chunk) - At March 31, 2022, gross unrealized losses on available-for-sale securities totaled **$97.2 million**, up from **$22.4 million** at December 31, 2021, with 223 securities in an unrealized loss position, though all declines were deemed temporary[45](index=45&type=chunk)[48](index=48&type=chunk)[279](index=279&type=chunk) - Securities pledged as collateral increased to **$463.6 million** at March 31, 2022, from **$332.3 million** at December 31, 2021[51](index=51&type=chunk) [Note 4—Loan and Lease Receivables](index=14&type=section&id=Note%204%E2%80%94Loan%20and%20Lease%20Receivables) This note details the composition and changes in the company's loan and lease portfolio, including various categories and pledged amounts Loan and Lease Receivables (dollars in thousands) | (dollars in thousands) | March 31, 2022 | December 31, 2021 | |:-----------------------|:---------------|:------------------| | Commercial real estate | $1,776,483 | $1,663,256 | | Commercial and industrial | $1,738,379 | $1,580,235 | | Paycheck Protection Program | $37,248 | $127,184 | | Lease financing receivables | $380,313 | $354,135 | | Total loans and leases | $4,782,717 | $4,533,511 | | Net loans and leases | $4,729,610 | $4,482,116 | - Total loans and leases increased by **$251.9 million (5.6%)** to **$4.8 billion** at March 31, 2022, driven by organic growth and renewals of acquired non-impaired loans, despite an **$87.5 million** decrease in PPP loans[54](index=54&type=chunk)[271](index=271&type=chunk)[285](index=285&type=chunk) - Originated loans and leases increased by **$299.5 million (7.3%)** to **$4.4 billion**, while acquired impaired and non-impaired loans decreased by **$47.6 million (10.7%)** to **$395.2 million**[58](index=58&type=chunk)[60](index=60&type=chunk)[285](index=285&type=chunk) - Loans and leases pledged as security for borrowings increased to **$2.2 billion** at March 31, 2022, from **$1.9 billion** at December 31, 2021[56](index=56&type=chunk) [Note 5—Allowance for Loan and Lease Losses and Reserve for Unfunded Commitments](index=17&type=section&id=Note%205%E2%80%94Allowance%20for%20Loan%20and%20Lease%20Losses%20and%20Reserve%20for%20Unfunded%20Commitments) This note explains the methodology and changes in the allowance for loan and lease losses and the reserve for unfunded commitments Allowance for Loan and Lease Losses and Reserve for Unfunded Commitments (dollars in thousands) | (dollars in thousands) | March 31, 2022 | December 31, 2021 | |:-----------------------|:---------------|:------------------| | Total allowance for loan and lease losses | $59,458 | $55,012 | | Total impaired loans | $71,452 | $72,923 | | Related allowance for impaired loans | $20,739 | $21,038 | - The allowance for loan and lease losses (ALLL) increased by **$4.4 million (8.1%)** to **$59.5 million** at March 31, 2022, primarily due to an increase in general reserves driven by loan and lease growth[66](index=66&type=chunk)[299](index=299&type=chunk) - The provision for loan and lease losses increased by **$628,000 (14.4%)** to **$5.0 million** for the three months ended March 31, 2022, compared to **$4.4 million** in the prior year[66](index=66&type=chunk)[251](index=251&type=chunk) - Total impaired loans (excluding acquired impaired loans) decreased slightly to **$71.5 million** at March 31, 2022, from **$72.9 million** at December 31, 2021[75](index=75&type=chunk) - The reserve for unfunded commitments increased to **$2.0 million** at March 31, 2022, from **$1.4 million** at December 31, 2021[83](index=83&type=chunk) [Note 6—Servicing Assets](index=23&type=section&id=Note%206%E2%80%94Servicing%20Assets) This note details the changes in servicing assets, including additions, revaluations, and related revenue Servicing Assets (dollars in thousands) | (dollars in thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | |:-----------------------|:----------------------------------|:----------------------------------| | Beginning balance | $23,744 | $22,042 | | Additions, net | $1,984 | $1,603 | | Changes in fair value | $(1,231) | $(1,505) | | Ending balance | $24,497 | $22,140 | - Servicing assets increased to **$24.5 million** at March 31, 2022, from **$23.7 million** at December 31, 2021, despite a downward revaluation of **$1.2 million** for the quarter[86](index=86&type=chunk)[255](index=255&type=chunk) - Loan servicing revenue increased to **$3.4 million** for Q1 2022 from **$2.8 million** for Q1 2021, with the total unpaid principal balance of loans serviced for others reaching **$1.7 billion**[86](index=86&type=chunk) [Note 7—Other Real Estate Owned](index=23&type=section&id=Note%207%E2%80%94Other%20Real%20Estate%20Owned) This note provides information on the company's other real estate owned (OREO), including additions, sales, and balances Other Real Estate Owned (dollars in thousands) | (dollars in thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | |:-----------------------|:----------------------------------|:----------------------------------| | Beginning balance | $2,112 | $6,350 | | Net additions to OREO | $309 | $436 | | Proceeds from sales of OREO | $(225) | $(370) | | Ending balance | $2,221 | $5,952 | - Other real estate owned (OREO) increased to **$2.2 million** at March 31, 2022, from **$2.1 million** at December 31, 2021, primarily due to net additions[89](index=89&type=chunk)[303](index=303&type=chunk) - The recorded investment of consumer mortgage loans in formal foreclosure proceedings increased to **$3.2 million** at March 31, 2022, from **$2.5 million** at December 31, 2021[92](index=92&type=chunk) [Note 8—Leases](index=24&type=section&id=Note%208%E2%80%94Leases) This note outlines the company's lease arrangements, including right-of-use assets, discount rates, and lease costs - The Company's operating lease right-of-use asset was **$11.8 million** at March 31, 2022, with a weighted-average discount rate of **1.19%** and a remaining life of **5.9 years**[96](index=96&type=chunk) Leases (dollars in thousands) | (dollars in thousands) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | |:-----------------------|:----------------------------------|:----------------------------------| | Operating lease cost | $858 | $865 | | Short-term lease cost | $37 | $96 | | Variable lease cost | $469 | $466 | | Total lease cost, net | $1,237 | $1,273 | - Total net lease cost for Q1 2022 was **$1.2 million**, slightly down from **$1.3 million** in Q1 2021[97](index=97&type=chunk) [Note 9—Goodwill, Core Deposit Intangible and Other Intangible Assets](index=25&type=section&id=Note%209%E2%80%94Goodwill,%20Core%20Deposit%20Intangible%20and%20Other%20Intangible%20Assets) This note details the company's intangible assets, including goodwill, core deposit intangibles, and their amortization Goodwill, Core Deposit Intangible and Other Intangible Assets (dollars in thousands) | (dollars in thousands) | March 31, 2022 | December 31, 2021 | |:-----------------------|:---------------|:------------------| | Goodwill | $148,353 | $148,353 | | Core Deposit Intangible | $13,475 | $15,004 | | Customer Relationship Intangible | $2,134 | $2,201 | | Total Intangible Assets | $163,962 | $165,558 | - Goodwill remained stable at **$148.4 million**, while core deposit intangible and customer relationship intangible assets decreased due to amortization[100](index=100&type=chunk) - Estimated amortization expense for core deposit and customer relationship intangible assets for the remainder of 2022 is **$4.8 million**[100](index=100&type=chunk) [Note 10—Income Taxes](index=25&type=section&id=Note%2010%E2%80%94Income%20Taxes) This note explains the company's effective tax rate and deferred tax assets, including factors influencing changes - The effective tax rate decreased to **22.0%** for Q1 2022 from **25.3%** for Q1 2021, primarily due to income tax benefits related to share-based compensation (**$1.1 million** in Q1 2022)[104](index=104&type=chunk) - Net deferred tax assets increased to **$67.3 million** at March 31, 2022, from **$50.3 million** at December 31, 2021, mainly due to unrealized losses on available-for-sale securities[104](index=104&type=chunk) [Note 11—Deposits](index=26&type=section&id=Note%2011%E2%80%94Deposits) This note provides a breakdown of the company's deposit base, including interest-bearing and non-interest-bearing categories Deposits (dollars in thousands) | (dollars in thousands) | March 31, 2022 | December 31, 2021 | |:-----------------------|:---------------|:------------------| | Non-interest-bearing demand deposits | $2,281,612 | $2,158,420 | | Interest-bearing deposits | $3,248,490 | $2,996,627 | | Total deposits | $5,530,102 | $5,155,047 | - Total deposits increased by **$375.1 million (7.3%)** to **$5.5 billion** at March 31, 2022, driven by growth in non-interest-bearing demand deposits and money market accounts[105](index=105&type=chunk)[272](index=272&type=chunk)[307](index=307&type=chunk) - Non-interest-bearing demand deposits constituted **41.3%** of total deposits at March 31, 2022, an increase of **$123.2 million (5.7%)** from December 31, 2021[105](index=105&type=chunk)[307](index=307&type=chunk) - The scheduled maturity for time deposits in 2022 is **$493.5 million**[106](index=106&type=chunk) [Note 12—Other Borrowings](index=26&type=section&id=Note%2012%E2%80%94Other%20Borrowings) This note details the company's other borrowing sources, including Federal Home Loan Bank advances and repurchase agreements Other Borrowings (dollars in thousands) | (dollars in thousands) | March 31, 2022 | December 31, 2021 | |:-----------------------|:---------------|:------------------| | Federal Home Loan Bank advances | $280,000 | $490,000 | | Securities sold under agreements to repurchase | $31,450 | $29,723 | | Total | $311,450 | $519,723 | - Other borrowings decreased by **$208.3 million (40.1%)** to **$311.5 million** at March 31, 2022, primarily due to a reduction in FHLB advances[107](index=107&type=chunk)[272](index=272&type=chunk) - The Company had **$2.0 billion** in FHLB borrowing capacity and **$748.0 million** from the Federal Reserve Bank at March 31, 2022[112](index=112&type=chunk)[318](index=318&type=chunk) [Note 13—Subordinated Notes and Junior Subordinated Debentures](index=27&type=section&id=Note%2013%E2%80%94Subordinated%20Notes%20and%20Junior%20Subordinated%20Debentures) This note describes the company's subordinated debt instruments, their terms, and regulatory capital classifications - The Company has **$75.0 million** in fixed-to-floating subordinated notes maturing July 1, 2030, with a net liability of **$73.6 million** at March 31, 2022, qualifying as Tier 2 capital[113](index=113&type=chunk) Junior Subordinated Debentures (dollars in thousands) | (dollars in thousands) | March 31, 2022 Carrying Value | December 31, 2021 Carrying Value | |:-----------------------|:------------------------------|:---------------------------------| | Junior subordinated debentures | $37,011 | $36,906 | - Junior subordinated debentures, totaling **$37.0 million** at March 31, 2022, are tied to LIBOR and qualify as Tier 1 regulatory capital[114](index=114&type=chunk)[119](index=119&type=chunk) [Note 14—Commitments and Contingent Liabilities](index=28&type=section&id=Note%2014%E2%80%94Commitments%20and%20Contingent%20Liabilities) This note outlines the company's off-balance sheet commitments, including credit extensions and letters of credit, and legal contingencies - The Company is involved in various legal proceedings, but management does not expect a material adverse effect on its financial statements[120](index=120&type=chunk) Commitments and Contingent Liabilities (dollars in thousands) | (dollars in thousands) | March 31, 2022 Total | December 31, 2021 Total | |:-----------------------|:---------------------|:------------------------| | Commitments to extend credit | $1,914,474 | $1,754,419 | | Letters of credit | $58,324 | $59,142 | | Total | $1,972,798 | $1,813,561 | - Total outstanding loan and lease commitments increased to **$1.97 billion** at March 31, 2022, from **$1.81 billion** at December 31, 2021[124](index=124&type=chunk) [Note 15—Fair Value Measurement](index=29&type=section&id=Note%2015%E2%80%94Fair%20Value%20Measurement) This note explains the company's fair value measurement hierarchy and the valuation techniques used for financial instruments - The Company categorizes financial instruments into Level 1, 2, or 3 based on the observability of inputs used in fair value measurements[128](index=128&type=chunk) Fair Value Measurement (dollars in thousands) | (dollars in thousands) | March 31, 2022 Fair Value | December 31, 2021 Fair Value | |:-----------------------|:--------------------------|:-----------------------------| | Securities available-for-sale | $1,369,368 | $1,454,542 | | Equity and other securities, at fair value | $10,677 | $10,578 | | Servicing assets | $24,497 | $23,744 | | Derivative assets | $29,113 | $13,375 | | Derivative liabilities | $7,475 | $9,665 | - Servicing assets and certain equity securities are measured using significant unobservable inputs (Level 3), with prepayment speeds and discount rates being key unobservable inputs for servicing assets[134](index=134&type=chunk) - Impaired loans, assets held for sale, and other real estate owned are measured at fair value on a non-recurring basis, primarily based on collateral valuations or market prices less costs to sell[134](index=134&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk) [Note 16—Derivative Instruments and Hedge Activities](index=34&type=section&id=Note%2016%E2%80%94Derivative%20Instruments%20and%20Hedge%20Activities) This note details the company's use of derivative instruments for risk management, including their notional amounts and fair values Derivative Instruments and Hedge Activities (dollars in thousands) | (dollars in thousands) | March 31, 2022 Notional Amount | March 31, 2022 Fair Value (Asset) | March 31, 2022 Fair Value (Liability) | |:-----------------------|:-------------------------------|:----------------------------------|:--------------------------------------| | Interest rate swaps designated as cash flow hedges | $450,000 | $21,782 | $— | | Other interest rate derivatives | $488,064 | $7,331 | $(7,474) | | Other credit derivatives | $7,350 | $— | $(1) | | Total derivatives | $945,414 | $29,113 | $(7,475) | - The total notional amount of derivatives increased to **$945.4 million** at March 31, 2022, from **$847.4 million** at December 31, 2021[153](index=153&type=chunk) - Cash flow hedges (interest rate swaps) had a notional amount of **$450.0 million** at March 31, 2022, with an unrealized gain of **$1.2 million** expected to be reclassified as a decrease to interest expense over the next twelve months[153](index=153&type=chunk) - Other interest rate derivatives, not designated as hedges, generated **$1.1 million** in net transaction fees for Q1 2022, with a total notional amount of **$488.1 million**[157](index=157&type=chunk) [Note 17 – Share-Based Compensation](index=37&type=section&id=Note%2017%20%E2%80%93%20Share-Based%20Compensation) This note describes the company's share-based compensation plans, including grants, vesting, and related expenses - The Company granted **289,277** restricted common shares in 2022, with various vesting schedules, and recognized **$1.3 million** in share-based compensation expense for Q1 2022[169](index=169&type=chunk)[173](index=173&type=chunk) - A total of **256,494** stock options were exercised in Q1 2022, generating **$470,000** in proceeds and **$1.1 million** in tax benefits[176](index=176&type=chunk) - As of March 31, 2022, **1,080,554** stock options remained outstanding under the BYB Plan, all fully vested and exercisable[174](index=174&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) [Note 18—Earnings per Share](index=40&type=section&id=Note%2018%E2%80%94Earnings%20per%20Share) This note provides the calculation of basic and diluted earnings per share, including the components used Earnings per Share (dollars in thousands, except share and per share data) | (dollars in thousands, except share and per share data) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | |:--------------------------------------------------------|:----------------------------------|:----------------------------------| | Net income available to common stockholders | $22,115 | $21,602 | | Weighted-average common stock outstanding (basic) | 37,123,161 | 38,164,201 | | Weighted-average common stock outstanding (dilutive) | 38,042,822 | 38,915,482 | | Basic earnings per common share | $0.60 | $0.57 | | Diluted earnings per common share | $0.58 | $0.56 | - Diluted EPS increased to **$0.58** for Q1 2022 from **$0.56** for Q1 2021, reflecting higher net income available to common stockholders and a decrease in weighted-average common shares outstanding[185](index=185&type=chunk) [Note 19—Stockholders' Equity](index=40&type=section&id=Note%2019%E2%80%94Stockholders'%20Equity) This note details changes in stockholders' equity, including preferred stock redemptions, share repurchases, and dividends - The Company redeemed all **10,438** outstanding shares of its Series B Preferred Stock on March 31, 2022, for **$10.6 million**[187](index=187&type=chunk)[331](index=331&type=chunk) - Under its stock repurchase program, the Company repurchased **282,819** common shares at a cost of **$7.6 million** during Q1 2022[192](index=192&type=chunk)[332](index=332&type=chunk) - Cash dividends declared and paid on common stock were **$0.09** per share for Q1 2022, up from **$0.06** per share in Q1 2021[193](index=193&type=chunk) [Note 20—Consolidated Statements of Changes in Accumulated Other Comprehensive Income (Loss)](index=41&type=section&id=Note%2020%E2%80%94Consolidated%20Statements%20of%20Changes%20in%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) This note presents the changes in accumulated other comprehensive income (loss), primarily due to unrealized gains or losses on securities Consolidated Statements of Changes in Accumulated Other Comprehensive Income (Loss) (dollars in thousands) | (dollars in thousands) | March 31, 2022 | March 31, 2021 | |:-----------------------|:---------------|:---------------| | Balance, January 1 | $(8,302) | $18,047 | | Other comprehensive income (loss), net of tax | $(48,086) | $(26,394) | | Balance, March 31 | $(56,388) | $(8,347) | - Accumulated other comprehensive loss significantly increased to **$56.4 million** at March 31, 2022, from **$8.3 million** at January 1, 2022, primarily due to **$61.1 million** in unrealized holding losses on available-for-sale securities[194](index=194&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a detailed discussion and analysis of Byline Bancorp, Inc.'s financial condition and results of operations for the three months ended March 31, 2022, compared to the same period in 2021, covering key financial performance metrics, balance sheet changes, loan portfolio composition, asset quality, funding sources, liquidity, capital resources, and a reconciliation of non-GAAP financial measures [Forward-Looking Statements](index=42&type=section&id=Forward-Looking%20Statements) This section highlights the inherent uncertainties and risks associated with forward-looking statements within the report - The report contains forward-looking statements subject to various risks and uncertainties, including those related to the COVID-19 pandemic, economic outlook, credit quality, market conditions, interest rate changes, and regulatory developments[197](index=197&type=chunk)[198](index=198&type=chunk) [Overview](index=43&type=section&id=Overview) This section introduces Byline Bancorp, Inc.'s business model, key financial highlights, and critical accounting policies - Byline Bancorp, Inc. is a bank holding company operating through Byline Bank, offering a range of banking products and services to businesses and consumers, including small ticket equipment leasing and U.S. government guaranteed lending programs (e.g., SBA loans)[201](index=201&type=chunk) - Net income for Q1 2022 was **$22.3 million**, an increase of **$513,000** from Q1 2021, driven by higher net interest income and non-interest income, partially offset by increased non-interest expense[205](index=205&type=chunk) Overview Metrics (annualized) | Metric (annualized) | Q1 2022 | Q1 2021 | |:--------------------|:--------|:--------| | Return on average assets | 1.35% | 1.34% | | Return on average stockholders' equity | 10.87% | 10.96% | | Diluted EPS | $0.58 | $0.56 | - Critical accounting policies include acquisition-related fair value computations, carrying value of loans and leases, ALLL determination, intangible asset valuation, fair value of financial instruments, and deferred tax assets[209](index=209&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, focusing on net interest income, non-interest income, and expenses [Net Interest Income](index=49&type=section&id=Net%20Interest%20Income) This section examines the factors influencing the company's net interest income and margin, including loan balances and funding costs - Net interest income increased by **$2.1 million (3.7%)** to **$58.7 million** for Q1 2022, primarily due to increased average loan and lease balances and a decrease in borrowed funds[246](index=246&type=chunk) Net Interest Income Metrics (annualized) | Metric (annualized) | Q1 2022 | Q1 2021 | |:--------------------|:--------|:--------| | Net interest margin (FTE) | 3.82% | 3.78% | | Average cost of deposits | 0.08% | 0.12% | - Net loan accretion income decreased by **$492,000 (25.0%)** to **$1.5 million** for Q1 2022, contributing **10 basis points** to net interest margin[249](index=249&type=chunk) [Provision for Loan and Lease Losses](index=52&type=section&id=Provision%20for%20Loan%20and%20Lease%20Losses) This section discusses the changes in the provision for loan and lease losses and its impact on the allowance for loan losses - Provision for loan and lease losses increased by **$628,000 (14.4%)** to **$5.0 million** for Q1 2022, mainly due to increases in qualitative factors and loan and lease portfolio growth[251](index=251&type=chunk) - The ALLL as a percentage of loans and leases increased from **1.21%** at December 31, 2021, to **1.24%** at March 31, 2022[252](index=252&type=chunk) [Non-Interest Income](index=52&type=section&id=Non-Interest%20Income) This section analyzes the components of non-interest income, including gains on loan sales and servicing revenue Non-Interest Income (dollars in thousands) | (dollars in thousands) | Q1 2022 | Q1 2021 | Change ($) | Change (%) | |:-----------------------|:--------|:--------|:-----------|:-----------| | Total non-interest income | $19,426 | $15,742 | $3,684 | 23.4% | | Net gains on sales of loans | $10,827 | $8,319 | $2,508 | 30.1% | | Loan servicing revenue | $3,380 | $2,769 | $611 | 22.1% | | Other non-interest income | $2,620 | $1,459 | $1,161 | 79.6% | - The increase in non-interest income was primarily driven by higher net gains on sales of loans (**$2.5 million** increase) and increased customer derivative products income and bank-owned life insurance income (**$1.1 million** increase in other non-interest income)[253](index=253&type=chunk)[257](index=257&type=chunk)[260](index=260&type=chunk) - Loan servicing asset revaluation resulted in a downward adjustment of **$1.2 million** for Q1 2022, an improvement from the **$1.5 million** downward adjustment in Q1 2021[255](index=255&type=chunk) [Non-Interest Expense](index=53&type=section&id=Non-Interest%20Expense) This section examines the trends in non-interest expenses, particularly salaries and employee benefits, and their effect on the efficiency ratio Non-Interest Expense (dollars in thousands) | (dollars in thousands) | Q1 2022 | Q1 2021 | Change ($) | Change (%) | |:-----------------------|:--------|:--------|:-----------|:-----------| | Total non-interest expense | $44,555 | $38,842 | $5,713 | 14.7% | | Salaries and employee benefits | $28,959 | $21,806 | $7,153 | 32.8% | | Loan and lease related expenses | $(891) | $951 | $(1,842) | NM | | Other non-interest expense | $3,923 | $2,363 | $1,560 | 66.0% | - Total non-interest expense increased by **$5.7 million (14.7%)** for Q1 2022, primarily due to a **$7.2 million** increase in salaries and employee benefits from new hires[261](index=261&type=chunk)[262](index=262&type=chunk) - The efficiency ratio worsened to **54.96%** for Q1 2022 from **51.25%** for Q1 2021, driven by the increase in non-interest expense[268](index=268&type=chunk) [Income Taxes](index=54&type=section&id=Income%20Taxes) This section details the provision for income taxes and the effective tax rate, including factors influencing changes - Provision for income taxes decreased by **$1.1 million (14.6%)** to **$6.3 million** for Q1 2022, with the effective tax rate falling to **22.0%** from **25.3%** in Q1 2021, mainly due to share-based compensation benefits[270](index=270&type=chunk) [Financial Condition](index=54&type=section&id=Financial%20Condition) This section provides an in-depth analysis of the company's balance sheet, including assets, liabilities, and capital [Condensed Consolidated Statements of Financial Condition Analysis](index=54&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition%20Analysis) This section analyzes the key changes in the company's total assets and liabilities over the reporting period - Total assets increased by **$138.5 million (2.1%)** to **$6.8 billion** at March 31, 2022, primarily due to a **$251.9 million (5.6%)** increase in loans and leases[271](index=271&type=chunk) - Total liabilities increased by **$186.2 million (3.2%)** to **$6.0 billion**, driven by a **$375.1 million (7.3%)** increase in deposits, partially offset by a **$208.3 million (40.1%)** decrease in other borrowings[272](index=272&type=chunk) [Investment Portfolio](index=54&type=section&id=Investment%20Portfolio) This section details the composition and performance of the company's investment securities, including available-for-sale and held-to-maturity portfolios - Securities available-for-sale decreased by **$85.2 million (5.9%)** to **$1.4 billion** at March 31, 2022, mainly due to decreases in fair value[274](index=274&type=chunk) - The held-to-maturity securities portfolio remained stable at **$3.9 million**[275](index=275&type=chunk) - At March 31, 2022, **223** investment securities had unrealized losses, but all declines were determined to be temporary, with full recovery of amortized cost anticipated[279](index=279&type=chunk) [Restricted Stock](index=56&type=section&id=Restricted%20Stock) This section provides information on the company's restricted stock holdings, primarily FHLB and Bankers' Bank stock - Restricted stock, primarily FHLB and Bankers' Bank stock, decreased to **$14.0 million** at March 31, 2022, from **$22.0 million** at December 31, 2021[284](index=284&type=chunk) [Loan and Lease Portfolio](index=56&type=section&id=Loan%20and%20Lease%20Portfolio) This section analyzes the growth, composition, and interest rate characteristics of the company's loan and lease portfolio - Total loans and leases increased by **$251.9 million (5.6%)** to **$4.8 billion** at March 31, 2022[285](index=285&type=chunk) Loan and Lease Portfolio (dollars in thousands) | Loan Type | March 31, 2022 Amount | March 31, 2022 % of Total | December 31, 2021 Amount | December 31, 2021 % of Total | |:-----------------------|:----------------------|:--------------------------|:-------------------------|:-----------------------------| | Originated loans and leases | $4,393,834 | 91.7% | $4,094,326 | 90.2% | | Acquired impaired loans | $119,751 | 2.5% | $127,051 | 2.8% | | Acquired non-impaired loans and leases | $275,483 | 5.8% | $315,751 | 7.0% | | Total loans and leases | $4,789,068 | 100.0% | $4,537,128 | 100.0% | - Commercial and industrial loans comprised the largest portion of originated loans at **35.5%**, while commercial real estate was **31.9%**[286](index=286&type=chunk) - At March 31, 2022, **44.8%** of the loan portfolio bore fixed interest rates and **55.2%** bore floating rates, with **$1.1 billion** indexed to LIBOR[295](index=295&type=chunk) [Allowance for Loan and Lease Losses](index=58&type=section&id=Allowance%20for%20Loan%20and%20Lease%20Losses) This section details the changes in the allowance for loan and lease losses and its coverage ratio relative to total loans - Total ALLL increased by **$4.4 million (8.1%)** to **$59.5 million** at March 31, 2022, primarily due to an increase in general reserves driven by loan and lease growth[299](index=299&type=chunk) - The ALLL to total loans and leases held for investment ratio increased to **1.24%** at March 31, 2022, from **1.21%** at December 31, 2021[299](index=299&type=chunk) [Non-Performing Assets](index=61&type=section&id=Non-Performing%20Assets) This section provides an overview of non-performing assets, including non-accrual loans and their trends Non-Performing Assets (dollars in thousands) | (dollars in thousands) | March 31, 2022 | December 31, 2021 | |:-----------------------|:---------------|:------------------| | Total non-performing assets | $22,498 | $25,242 | | Non-accrual loans and leases | $20,277 | $23,130 | | Total non-performing loans and leases as a percentage of total loans and leases | 0.42% | 0.51% | | ALLL as a percentage of non-performing loans and leases | 293.23% | 237.84% | - Total non-performing assets decreased to **$22.5 million** at March 31, 2022, from **$25.2 million** at December 31, 2021, primarily due to a **$2.9 million** decrease in non-accrual loans[303](index=303&type=chunk)[305](index=305&type=chunk) - The U.S. government guaranteed portion of non-performing loans decreased to **$1.8 million** at March 31, 2022, from **$3.3 million** at December 31, 2021[303](index=303&type=chunk) [Deposits](index=62&type=section&id=Deposits) This section analyzes the growth, composition, and cost of the company's deposit base - Total deposits increased by **$375.1 million (7.3%)** to **$5.5 billion** at March 31, 2022, driven by growth in non-interest-bearing deposits and money market accounts[307](index=307&type=chunk) - Non-interest-bearing deposits were **41.3%** of total deposits at March 31, 2022, and core deposits were **93.1%** of total deposits[307](index=307&type=chunk) - The average cost of deposits decreased to **0.08%** for Q1 2022 from **0.12%** for Q1 2021, attributed to lower rates on interest-bearing deposits and an improved deposit mix[308](index=308&type=chunk) [Borrowed Funds](index=63&type=section&id=Borrowed%20Funds) This section describes the company's borrowed funds, including subordinated notes and FHLB advances, and available borrowing capacity - The Company has **$75.0 million** in subordinated notes maturing in 2030 and utilizes FHLB advances as a supplementary funding source[311](index=311&type=chunk) - At March 31, 2022, FHLB advances totaled **$280.0 million**, with an available borrowing capacity of **$2.0 billion**[311](index=311&type=chunk) - The Paycheck Protection Program Liquidity Facility (PPPLF) had no outstanding amount at March 31, 2022, after being fully repaid in 2021[311](index=311&type=chunk) [Customer Repurchase Agreements (Sweeps)](index=63&type=section&id=Customer%20Repurchase%20Agreements%20(Sweeps)) This section provides information on the company's customer repurchase agreements and their changes over the period - Securities sold under agreements to repurchase increased by **$1.7 million** to **$31.4 million** at March 31, 2022[315](index=315&type=chunk) [Liquidity](index=64&type=section&id=Liquidity) This section outlines the company's liquidity management strategies and available funding sources to meet obligations - Liquidity needs are met by cash, investment securities, deposit growth, loan portfolio cash flow, and FHLB borrowings[317](index=317&type=chunk) - At March 31, 2022, Byline Bank had an available aggregate borrowing capacity of **$354.4 million** from FHLB and FRB, in addition to **$115.0 million** in uncommitted federal funds lines[318](index=318&type=chunk) [Capital Resources](index=64&type=section&id=Capital%20Resources) This section analyzes the company's capital structure, regulatory capital ratios, and capital management activities - Stockholders' equity decreased by **$47.7 million (5.7%)** to **$788.7 million** at March 31, 2022, primarily due to increased accumulated other comprehensive loss, preferred stock redemption, and share repurchases[323](index=323&type=chunk) Capital Ratios (Company) | Capital Ratio (Company) | March 31, 2022 | December 31, 2021 | |:------------------------|:---------------|:------------------| | Total capital to risk weighted assets | 13.72% | 14.70% | | Tier 1 capital to risk weighted assets | 11.49% | 12.37% | | Common Equity Tier 1 (CET1) to risk weighted assets | 10.75% | 11.39% | | Tier 1 capital to average assets (Leverage ratio) | 10.70% | 10.89% | - Byline Bank exceeded all applicable regulatory capital requirements and was considered 'well-capitalized' at March 31, 2022[326](index=326&type=chunk) - The Company redeemed all outstanding Series B Preferred Stock for **$10.6 million** on March 31, 2022, and repurchased **$7.6 million** of common stock during Q1 2022[331](index=331&type=chunk)[332](index=332&type=chunk) [Off-Balance Sheet Items and Other Financing Arrangements](index=66&type=section&id=Off-Balance%20Sheet%20Items%20and%20Other%20Financing%20Arrangements) This section discusses the company's off-balance sheet financial instruments, including commitments and derivative contracts, and their associated risks - The Company uses financial instruments with off-balance sheet risk, including commitments to extend credit and letters of credit, which involve credit and interest rate risk[335](index=335&type=chunk) Off-Balance Sheet Items and Other Financing Arrangements (dollars in thousands) | (dollars in thousands) | Notional | Fair Value (Asset) | Fair Value (Liability) | |:-----------------------|:---------|:-------------------|:-----------------------| | Interest rate swaps designated as cash flow hedges | $450,000 | $21,782 | $— | | Other interest rate swaps | $488,064 | $7,331 | $(7,474) | | Other credit derivatives | $7,350 | $— | $(1) | - Interest rate swaps are used to manage interest rate exposure on commercial loans and variable rate borrowings, with a total notional amount of **$938.1 million** at March 31, 2022[340](index=340&type=chunk)[353](index=353&type=chunk) [GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures](index=67&type=section&id=GAAP%20Reconciliation%20and%20Management%20Explanation%20of%20Non-GAAP%20Financial%20Measures) This section provides reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures, along with management's rationale for their use - The Company uses several non-GAAP financial measures, such as 'Adjusted net income,' 'Net interest income, fully taxable-equivalent,' 'Adjusted efficiency ratio,' and 'Tangible common equity,' to provide supplementary information for management and investors[343](index=343&type=chunk) GAAP Reconciliation and Non-GAAP Financial Measures (dollars in thousands) | (dollars in thousands) | Q1 2022 | Q1 2021 | |:-----------------------|:--------|:--------| | Reported Net Income | $22,311 | $21,798 | | Adjusted Net Income | $22,311 | $22,237 | | Pre-tax pre-provision net income | $33,607 | $33,540 | | Tangible common stockholders' equity | $624,709 | $612,475 | | Tangible assets | $6,670,674 | $6,579,243 | | Adjusted efficiency ratio | 54.96% | 50.41% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk.](index=71&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) This section discusses the Company's primary market risk, which is interest rate risk, and how it is measured and managed, outlining the impact of interest rate changes on net interest income and the use of simulation models and derivative instruments to mitigate this risk - The Company's primary market risk is interest rate risk, managed through monitoring interest sensitivity exposure, asset and liability allocation, and using interest rate derivatives[353](index=353&type=chunk) - A net interest income simulation model is used quarterly to evaluate potential changes in net interest income under various hypothetical interest rate scenarios[355](index=355&type=chunk) Net Interest Income Sensitivity Analysis | Scenario (Immediate Shifts) | Year 1 Percentage Change | Year 2 Percentage Change | |:----------------------------|:-------------------------|:-------------------------| | +300 basis points | 25.5% | 34.8% | | +200 basis points | 17.4% | 23.6% | | +100 basis points | 8.5% | 11.7% | | -100 basis points | -5.2% | -9.0% | - A gradual upward shift of **100** and **200 basis points** would result in **1.6%** and **3.1%** increases to net interest income, respectively, over the next 12 months[356](index=356&type=chunk) [Item 4. Controls and Procedures.](index=72&type=section&id=Item%204.%20Controls%20and%20Procedures.) This section confirms the effectiveness of the Company's disclosure controls and procedures as of March 31, 2022, and states that there were no material changes in internal control over financial reporting during the quarter - The Company's disclosure controls and procedures were effective as of March 31, 2022, providing reasonable assurance for timely and accurate financial reporting[358](index=358&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2022[359](index=359&type=chunk) PART II. OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings.](index=73&type=section&id=Item%201.%20Legal%20Proceedings.) The Company is not currently party to any legal proceedings that are expected to have a material adverse effect on its business or financial condition - The Company is not involved in any legal proceedings expected to have a material adverse effect on its business or financial condition[363](index=363&type=chunk) [Item 1A. Risk Factors.](index=73&type=section&id=Item%201A.%20Risk%20Factors.) There have been no material changes to the risk factors previously disclosed in the Company's Form 10-K for the fiscal year ended December 31, 2021 - No material changes to the risk factors previously disclosed in the Form 10-K for the fiscal year ended December 31, 2021[364](index=364&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.](index=73&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) This section details the Company's stock repurchase program, including the number of shares purchased and the remaining authorization under the program for the quarter ended March 31, 2022 - The Board of Directors authorized a stock repurchase program for up to **2,500,000** shares of common stock, effective until December 31, 2022[365](index=365&type=chunk) Stock Repurchase Program | Period | Total Number of Shares Purchased | Average Price Paid per Share | |:-----------------------|:---------------------------------|:-----------------------------| | January 1 - January 31, 2022 | — | $— | | February 1 - February 28, 2022 | 344,493 | $26.88 | | March 1 - March 31, 2022 | 103,391 | $26.89 | | Total | 447,884 | $26.88 | - As of March 31, 2022, **885,473** shares remained authorized for repurchase under the program[366](index=366&type=chunk) [Item 3. Defaults Upon Senior Securities.](index=73&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) The Company reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[367](index=367&type=chunk) [Item 4. Mine Safety Disclosures.](index=73&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the Company - This item is not applicable[368](index=368&type=chunk) [Item 5. Other Information.](index=73&type=section&id=Item%205.%20Other%20Information.) No other information was reported under this item - No other information was reported[369](index=369&type=chunk) [Item 6. Exhibits.](index=74&type=section&id=Item%206.%20Exhibits.) This section lists all exhibits filed as part of the Form 10-Q, including organizational documents, certifications, and interactive data files - The exhibits include the Amended and Restated Certificate of Incorporation, Bylaws, Certificate of Designations of Preferred Stock, officer certifications, and Inline XBRL interactive data files[372](index=372&type=chunk)

Financial Data and Key Metrics Changes - Net income for Q1 2022 was $22.3 million or $0.58 per diluted share, an increase compared to the previous quarter and year-ago period [11] - Revenue for the quarter was $78.2 million, slightly lower than the linked quarter but up 8% year-over-year [11] - Return on average assets (ROAA) was 1.35% and return on tangible common equity (ROTCE) was 14.4% [11] - Pre-tax pre-provision revenue was $33.6 million, with a pre-tax pre-provision ROAA of 2.03% [11] Business Line Data and Key Metrics Changes - Loans excluding PPP increased by $339 million or 31% annualized, totaling $4.8 billion at quarter-end [12] - The company originated $325 million in loans for the quarter, up from $280 million in the prior quarter [13] - Government guaranteed lending closed $129 million in loans, up 16% year-over-year [14] - Total deposits grew by $375 million or 30% annualized, reaching a record level of $5.5 billion [15] Market Data and Key Metrics Changes - Deposit costs remained flat at a cycle low of 8 basis points [15] - The mix of deposits remained strong, with demand deposit accounts (DDAs) representing 41% of balances [15] - Net interest income was $19.4 million, up 2% from the last quarter and 23% year-over-year [17] Company Strategy and Development Direction - The company remains focused on executing its strategy despite geopolitical uncertainty and high inflation [34] - There is optimism about growth opportunities both organically and through M&A [35] - The company aims to continue returning capital to shareholders while supporting organic growth [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current volatile environment but expressed confidence in the company's strong performance and credit quality [8][10] - The outlook for the rest of the year is optimistic, with strong pipelines and diversified business [35] - Management remains vigilant regarding credit quality and potential macroeconomic impacts [61] Other Important Information - The efficiency ratio improved to just under 55% for the quarter [18] - Capital ratios remained strong, with CET1 and total capital ratios just under 11% and 14% respectively [19] - The company returned 50% of its earnings to shareholders through dividends and share repurchases [33] Q&A Session Summary Question: Drivers of deposit growth in the quarter - Management indicated that deposit growth was a combination of share gains, existing relationships, and increased liquidity in the system [39] Question: Margin outlook going forward - Management expects net interest margin to expand, with guidance on additional net interest income from rate increases [41][42] Question: Government guaranteed lending segment origination capabilities - Management expressed confidence in the team's ability to execute and maintain a robust pipeline despite market dynamics [44] Question: Loan growth guidance and potential slowdowns - Management reaffirmed high single-digit growth guidance, attributing strong performance to muted payoffs and increased line utilization [47][49] Question: Key expense guidance and hiring plans - Management confirmed that the expense guidance includes room for new hires due to active market conditions [51] Question: Expectations for deposit costs and competition - Management noted that while competition is currently low, they anticipate deposit costs to rise as rates increase [54] Question: Outlook on credit quality and provisions - Management remains vigilant regarding credit quality, expecting to provision as loan growth continues [61] Question: M&A environment and dialogue - Management indicated that dialogue around M&A remains strong despite market adjustments [72]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-38139 Byline Bancorp, Inc. (Exact name of Registrant as specified in its Charter) Delaware 36-3012593 (State or other jurisdiction of ...

Byline Bancorp, Inc. (NYSE:BY) Q4 2021 Earnings Conference Call January 28, 2022 10:00 AM ET Company Participants Roberto Herencia – Chairman and CEO Lindsay Corby – Chief Financial Officer Brooks Rennie – Head-Investor Relations Alberto Paracchini – President Conference Call Participants Ben Gerlinger – Hovde Group Nathan Race – Piper Sandler Terry McEvoy – Stephens Damon DelMonte – KBW Brian Martin – Janney Montgomery Operator Good morning and welcome to the Byline Bancorp, Fourth Quarter 2021 Earnings Ca ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Byline Bancorp, Inc.'s unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2021 Key Financial Highlights (as of September 30, 2021 vs. December 31, 2020) | Financial Metric | September 30, 2021 | December 31, 2020 | Change | |---|---|---|---| | Total Assets | $6.70 billion | $6.39 billion | +4.9% | | Net Loans and Leases | $4.55 billion | $4.27 billion | +6.6% | | Total Deposits | $5.16 billion | $4.75 billion | +8.6% | | Total Stockholders' Equity | $824.4 million | $805.5 million | +2.3% | Key Operational Highlights (Nine Months Ended September 30, 2021 vs. 2020) | Operational Metric | Nine Months 2021 | Nine Months 2020 | Change | |---|---|---|---| | Net Income | $75.6 million | $25.2 million | +200% | | Diluted EPS | $1.95 | $0.64 | +205% | | Net Interest Income | $174.7 million | $159.0 million | +9.9% | | Provision for Loan and Lease Losses | $2.8 million | $45.7 million | -94.0% | [Note 1—Basis of Presentation](index=10&type=section&id=Note%201%E2%80%94Basis%20of%20Presentation) This note outlines the preparation of unaudited interim condensed consolidated financial statements in accordance with U.S. GAAP, affirming a single reportable segment - The financial statements are prepared under GAAP for interim reporting and should be read alongside the company's **2020 annual financial statements**[35](index=35&type=chunk) - The company operates as a **single reportable segment**, with consolidated information used for operational evaluation[37](index=37&type=chunk) [Note 3—Securities](index=12&type=section&id=Note%203%E2%80%94Securities) This note details the company's securities portfolio, comprising available-for-sale and held-to-maturity instruments, and addresses unrealized losses Securities Portfolio Summary (Fair Value) | Category | September 30, 2021 | December 31, 2020 | |---|---|---| | Securities Available-for-Sale | $1,427.6 million | $1,447.2 million | | Securities Held-to-Maturity | $4.0 million | $4.6 million | - As of September 30, 2021, **97 available-for-sale securities** had **temporary unrealized losses totaling $18.9 million**, with no intent or requirement to sell before cost recovery[53](index=53&type=chunk)[56](index=56&type=chunk) - Securities pledged as collateral decreased to **$361.0 million** at September 30, 2021, from **$731.8 million** at December 31, 2020[58](index=58&type=chunk) [Note 4—Loan and Lease Receivables](index=15&type=section&id=Note%204%E2%80%94Loan%20and%20Lease%20Receivables) This note details the loan and lease portfolio, which grew to **$4.61 billion** by September 30, 2021, highlighting key categories and PPP loan changes Loan and Lease Portfolio Composition | Loan Category | Sept 30, 2021 | Dec 31, 2020 | |---|---|---| | Commercial real estate | $1,615.9 million | $1,416.7 million | | Commercial and industrial | $1,535.4 million | $1,372.5 million | | Paycheck Protection Program (PPP) | $275.6 million | $527.0 million | | Residential real estate | $507.2 million | $569.4 million | | Lease financing receivables | $334.5 million | $223.3 million | | Construction, land development | $340.4 million | $231.6 million | | **Total Loans and Leases** | **$4,609.2 million** | **$4,340.5 million** | - Originated loans and leases increased to **$4.10 billion**, while acquired portfolios decreased due to reclassification and paydowns[68](index=68&type=chunk)[70](index=70&type=chunk) [Note 5—Allowance for Loan and Lease Losses and Reserve for Unfunded Commitments](index=18&type=section&id=Note%205%E2%80%94Allowance%20for%20Loan%20and%20Lease%20Losses%20and%20Reserve%20for%20Unfunded%20Commitments) This note details the Allowance for Loan and Lease Losses (ALLL), which decreased to **$60.6 million** by September 30, 2021, reflecting lower provisions and net charge-offs ALLL Activity (Nine Months Ended Sept 30, 2021) | Metric | Amount (in thousands) | |---|---| | Beginning Balance (Jan 1, 2021) | $66,347 | | Provision for Loan & Lease Losses | $2,750 | | Charge-offs | ($10,366) | | Recoveries | $1,867 | | **Ending Balance (Sept 30, 2021)** | **$60,598** | - The ALLL to total loans ratio was **1.31%** at September 30, 2021, decreasing from **1.53%** at year-end 2020[299](index=299&type=chunk) - Total non-accrual loans decreased to **$34.5 million** at September 30, 2021, from **$41.1 million** at December 31, 2020[91](index=91&type=chunk) - Troubled Debt Restructurings (TDRs) decreased to **$4.2 million** at September 30, 2021, from **$8.1 million** at year-end 2020[91](index=91&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) [Note 11—Deposits](index=30&type=section&id=Note%2011%E2%80%94Deposits) This note details the **$5.16 billion** increase in total deposits by September 30, 2021, primarily driven by growth in non-interest-bearing demand deposits Deposit Composition | Deposit Type | Sept 30, 2021 | Dec 31, 2020 | |---|---|---| | Non-interest-bearing demand | $2,117.7 million | $1,762.7 million | | Interest-bearing checking | $652.8 million | $494.4 million | | Money market demand | $1,057.4 million | $1,142.7 million | | Other savings | $627.3 million | $564.7 million | | Time deposits | $703.0 million | $787.5 million | | **Total Deposits** | **$5,158.3 million** | **$4,752.0 million** | [Note 17 – Share-Based Compensation](index=42&type=section&id=Note%2017%20%E2%80%93%20Share-Based%20Compensation) This note outlines share-based compensation under the 2017 Omnibus Plan, detailing restricted stock grants and outstanding awards, with **$2.97 million** in related expense - A total of **308,452 restricted shares** were granted in the first nine months of 2021, with various vesting schedules[189](index=189&type=chunk)[190](index=190&type=chunk) - As of September 30, 2021, **698,331 shares** were available for future grants under the 2017 Omnibus Plan[187](index=187&type=chunk) - Total unrecognized compensation expense for restricted stock was **$7.8 million**, with a remaining weighted-average amortization period of **2.4 years**[195](index=195&type=chunk) [Note 19—Stockholders' Equity](index=45&type=section&id=Note%2019%E2%80%94Stockholders%27%20Equity) This note details stockholders' equity at **$824.4 million** as of September 30, 2021, including share repurchases and common stock dividends declared - The Board of Directors expanded the stock repurchase program in July 2021, authorizing the repurchase of an additional **1,250,000 shares**[213](index=213&type=chunk) - During the nine months ended September 30, 2021, the company repurchased **1,331,708 shares** at a cost of **$28.9 million**[214](index=214&type=chunk) - Cash dividends of **$0.09 per common share** were declared for Q3 2021, totaling **$0.21 per share** for the first nine months[215](index=215&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=47&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's overview of the company's financial performance and condition, highlighting significant increases in net income and asset growth Q3 2021 vs Q3 2020 Performance | Metric | Q3 2021 | Q3 2020 | Change | |---|---|---|---| | Net Income | $25.3 million | $13.1 million | +$12.2 million | | Diluted EPS | $0.66 | $0.34 | +$0.32 | | Net Interest Income | $59.8 million | $53.5 million | +$6.3 million | | Provision for Loan/Lease Losses | $0.4 million | $15.7 million | -$15.3 million | - The significant increase in net income was primarily driven by a substantial decrease in the **provision for loan and lease losses**, reflecting improved credit quality[269](index=269&type=chunk)[273](index=273&type=chunk) - Total assets increased by **$313.8 million (4.9%)** to **$6.7 billion**, supported by a **$406.2 million (8.5%)** increase in total deposits[327](index=327&type=chunk)[328](index=328&type=chunk) - Active payment deferrals related to COVID-19 were reduced to **$2.0 million**, representing **0.05%** of loans and leases (excluding PPP loans)[229](index=229&type=chunk)[352](index=352&type=chunk) [Results of Operations](index=52&type=section&id=MD%26A_Results%20of%20Operations) This section details the company's operating results, highlighting a significant increase in net income for both the quarter and nine-month period, driven by lower provisions and higher net interest income - The increase in net interest income for Q3 2021 was driven by **higher average loan balances** and a **lower cost of funds**[270](index=270&type=chunk) - The decrease in non-interest income for Q3 2021 was mainly due to a **downward revaluation of the loan servicing asset**[270](index=270&type=chunk)[300](index=300&type=chunk) - The increase in non-interest expense for Q3 2021 was primarily due to **higher salaries and employee benefits** from new hires[312](index=312&type=chunk)[314](index=314&type=chunk) - The efficiency ratio for Q3 2021 was **54.18%**, with an adjusted efficiency ratio of **52.35%**[272](index=272&type=chunk)[322](index=322&type=chunk) [Financial Condition](index=62&type=section&id=MD%26A_Financial%20Condition) This section details the company's financial condition, reporting **$6.7 billion** in total assets and **$5.2 billion** in deposits as of September 30, 2021, while maintaining a well-capitalized status - Total assets grew by **$313.8 million**, driven by a **$268.7 million** increase in loans and leases[327](index=327&type=chunk) - Total deposits increased by **$406.2 million**, with non-interest-bearing deposits growing by **$355.1 million**[328](index=328&type=chunk)[368](index=368&type=chunk) - Non-performing assets decreased by **21.0%** to **$37.5 million** from **$47.5 million** at year-end 2020[364](index=364&type=chunk) - The company and Byline Bank exceeded all regulatory capital requirements, with the company's Total capital to risk-weighted assets ratio at **14.78%**[389](index=389&type=chunk)[390](index=390&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=78&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's primary market risk, interest rate risk, and its management through simulation models, along with credit risk mitigation strategies - The primary market risk is identified as **interest rate risk**, arising from mismatches in asset and liability repricing[414](index=414&type=chunk) Net Interest Income Sensitivity (Immediate Parallel Shift) | Rate Change | % Change in NII (Year 1) | % Change in NII (Year 2) | |---|---|---| | +300 bps | +23.7% | +34.7% | | +200 bps | +15.1% | +22.8% | | +100 bps | +5.7% | +9.7% | | -100 bps | -3.2% | -6.8% | - The company manages credit risk through **well-defined underwriting policies**, portfolio diversification, and an independent credit review process[416](index=416&type=chunk) [Controls and Procedures](index=83&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's **disclosure controls and procedures were effective** as of September 30, 2021[423](index=423&type=chunk) - No material changes occurred in internal control over financial reporting during the quarter ended September 30, 2021[424](index=424&type=chunk) [PART II. OTHER INFORMATION](index=84&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=84&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its financial condition or operations - The company is not currently party to any legal proceedings expected to have a **material adverse effect** on its business or financial condition[428](index=428&type=chunk) [Risk Factors](index=84&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's 2020 Annual Report on Form 10-K have occurred - No **material changes** to risk factors have occurred since the filing of the 2020 Form 10-K[429](index=429&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=84&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's stock repurchase program, expanded in July 2021, and the shares repurchased during the third quarter Share Repurchases (Quarter Ended September 30, 2021) | Period | Total Shares Purchased | Average Price Paid per Share | |---|---|---| | July 2021 | 378,512 Shares | $22.56 per Share | | August 2021 | 1,268 Shares | $25.17 per Share | | September 2021 | 81,948 Shares | $22.92 per Share | | **Total** | **461,728 Shares** | **$22.63 per Share** | - The Board of Directors authorized an expansion of the stock repurchase program on July 27, 2021, allowing for the repurchase of an additional **1,250,000 shares**[430](index=430&type=chunk) [Defaults Upon Senior Securities](index=84&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - No defaults upon senior securities occurred during the period[432](index=432&type=chunk) [Other Information](index=84&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item - No other information was reported under this item[434](index=434&type=chunk)

Financial Data and Key Metrics Changes - Net income for the quarter was $25.3 million or $0.66 per share, slightly lower than the previous quarter due to a $2.7 million fair value mark on servicing assets, impacting earnings by approximately $0.07 per diluted share [9][10] - Pre-tax pre-provision revenue was $34.2 million, resulting in a pre-tax pre-provision ROA of 207 basis points, while ROA was 153 basis points, down from the previous quarter but up 72 basis points year-over-year [10] - The efficiency ratio remained around 52%, despite higher compensation costs [19][35] Business Line Data and Key Metrics Changes - Total loans, excluding PPP, increased by $348 million or 35% annualized, reaching $4.4 billion at quarter-end, with $428 million in loan production, a record for the company [12][22] - Government-guaranteed lending business achieved record production with $195 million in closed loans, up 36% from the prior quarter [15] - Non-interest income decreased by $2.5 million primarily due to a $2.7 million loan servicing asset revaluation charge [31] Market Data and Key Metrics Changes - Deposits grew by $66 million or 5.2% annualized, totaling $5.2 billion, with strong inflows from commercial deposits [16][26] - Commercial line utilization increased to 52.4% from 50.6% in the previous quarter, indicating healthy demand for credit [14] - The company remains the fifth largest 7(a) lender in the U.S. as of the government's fiscal year-end on September 30 [15] Company Strategy and Development Direction - The company aims to achieve quality organic loan growth across its lending businesses and continues to add talent to support this objective [39][41] - There is a focus on managing expenses while investing in digital capabilities to enhance operational efficiency [39][67] - The company is actively evaluating M&A opportunities that fit its strategic criteria, particularly in the greater Chicago Metro area [42][75] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about growth in the latter part of the year and into next year, despite concerns over the Delta variant and supply chain challenges [43] - The company expects to see an increase in loan production as the economy continues to recover, with a strong pipeline for future growth [43][86] - Management is cautious regarding charge-offs and reserves, emphasizing the need to remain vigilant as economic conditions evolve [57] Other Important Information - The capital position remains strong with a CET1 ratio of 11.3% and a total capital ratio of 14.8% [20] - Approximately 49% of earnings have been returned to shareholders through dividends and share repurchases [38] - The company repurchased approximately 460,000 shares during the quarter, reflecting its strong capital position [20][39] Q&A Session Summary Question: Overview of the banking landscape and Byline's growth strategy - Management emphasized the importance of a diversified lending business, which provides stability and flexibility in terms of yield [46][47] Question: Drivers of loan growth and shared gains - Loan growth was supported by lower-than-expected prepayments and contributions from newly added bankers [50][52] Question: Outlook for charge-offs and reserves - Management remains vigilant regarding charge-offs, particularly as economic stimulus wears off, and will continue to monitor the credit environment closely [56][57] Question: Growth in legacy portfolios versus new teams - Growth was observed in both legacy C&I and commercial real estate portfolios, with increased customer activity noted [60][62] Question: Digital banking initiatives and tech spending - The company is focused on enhancing digital capabilities, including the ability to open business accounts digitally, with plans to roll this out in early 2022 [66][67] Question: Expense outlook and hiring plans - The expense guidance includes new hires made towards the end of the quarter, with potential for additional hires based on opportunities [68][69] Question: M&A criteria and target characteristics - The company looks for strategic fits in potential targets, focusing on complementary deposit franchises and opportunities for cost efficiencies [74][75]

Investor Presentation – September 2021 BY Byline Bancorp, Inc. BY LISTED NYSE 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 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______to ______ Commission File Number 001-38139 Byline Bancorp, Inc. (Exact Name of Registrant as Specified in Its Charter) Delaware 36-3012593 (State or Other Jurisdict ...