BYLINE BANCORP, INC. [BY] Filings

10-Q 1 by-20240630.htm 10-Q 10-Q

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, 2024

☐ 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
Incorporation or Organization)

    (IRS Employer
Identification Number)

180 North LaSalle Street, Suite 300

Chicago, Illinois 60601

(Address of Principal Executive Offices)

(773) 244-7000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒

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


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock	BY	New York Stock Exchange

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Common Stock, $0.01 par value, 44,260,652 shares outstanding as of July 31, 2024

BYLINE BANCORP, INC.

FORM 10-Q

June 30, 2024

INDEX


		Page

PART I.	FINANCIAL INFORMATION	3
Item 1.	Financial Statements. The Unaudited Interim Condensed Consolidated Financial Statements of Byline Bancorp, Inc.	3
	Notes to Unaudited Interim Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	79
Item 4.	Controls and Procedures	80

PART II.	OTHER INFORMATION	81
Item 1.	Legal Proceedings	81
Item 1A.	Risk Factors	81
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	81
Item 3.	Defaults Upon Senior Securities	81
Item 4.	Mine Safety Disclosures	81
Item 5.	Other Information	81
Item 6.	Exhibits	82

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)



(dollars in thousands, except share data)	June 30, 2024			December 31, 2023
ASSETS
Cash and due from banks	$	68,251		$	60,431
Interest bearing deposits with other banks		662,206			165,705
Cash and cash equivalents		730,457			226,136
Equity and other securities, at fair value		8,745			8,743
Securities available-for-sale, at fair value (amortized cost at June 30, 2024—$1,573,276; December 31, 2023—$1,516,801)		1,386,827			1,342,480
Securities held-to-maturity, at amortized cost (fair value at June 30, 2024—$601; December 31, 2023 —$1,149)		606			1,157
Restricted stock, at cost		31,775			16,304
Loans held for sale		13,360			18,005
Loans and leases:
Loans and leases		6,891,204			6,684,306
Allowance for credit losses - loans and leases		(99,730	)		(101,686	)
Net loans and leases		6,791,474			6,582,620
Servicing assets, at fair value		19,617			19,844
Premises and equipment, net		63,919			66,627
Goodwill and other intangible assets, net		200,788			203,478
Bank-owned life insurance		98,519			96,900
Deferred tax assets, net		48,888			50,058
Accrued interest receivable and other assets		238,840			249,615
Total assets	$	9,633,815		$	8,881,967
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Non-interest-bearing demand deposits	$	1,762,891		$	1,905,876
Interest-bearing deposits		5,584,290			5,271,123
Total deposits		7,347,181			7,176,999
Other borrowings		918,738			395,190
Subordinated notes, net		73,953			73,866
Junior subordinated debentures issued to capital trusts, net		70,675			70,452
Accrued interest payable and other liabilities		190,254			175,309
Total liabilities		8,600,801			7,891,816
COMMITMENTS AND CONTINGENT LIABILITIES (Note 14)
STOCKHOLDERS’ EQUITY
Preferred stock		—			—
Common stock		452			451
Additional paid-in capital		710,792			710,488
Retained earnings		481,232			429,036
Treasury stock, at cost		(47,993	)		(49,707	)
Accumulated other comprehensive loss, net of tax		(111,469	)		(100,117	)
Total stockholders’ equity		1,033,014			990,151
Total liabilities and stockholders’ equity	$	9,633,815		$	8,881,967


	June 30, 2024				December 31, 2023
	Preferred Shares		Common Shares		Preferred Shares		Common Shares
Par value	$	0.01	$	0.01	$	0.01	$	0.01
Shares authorized		25,000,000		150,000,000		25,000,000		150,000,000
Shares issued		—		45,981,155		—		45,714,241
Shares outstanding		—		44,180,829		—		43,764,056
Treasury shares		—		1,800,326		—		1,950,185

See accompanying Notes to Unaudited Interim Condensed Consolidated Financial Statements.

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(dollars in thousands, except share and per share data)	2024			2023			2024			2023
INTEREST AND DIVIDEND INCOME
Interest and fees on loans and leases	$	126,523		$	99,134		$	250,315		$	191,477
Interest on securities		10,514			6,559			20,248			13,159
Other interest and dividend income		4,532			1,579			9,327			2,638
Total interest and dividend income		141,569			107,272			279,890			207,274
INTEREST EXPENSE
Deposits		47,603			24,723			93,565			41,021
Other borrowings		4,460			4,241			8,284			10,129
Subordinated notes and debentures		2,980			2,142			5,974			4,240
Total interest expense		55,043			31,106			107,823			55,390
Net interest income		86,526			76,166			172,067			151,884
PROVISION FOR CREDIT LOSSES		6,045			5,790			12,688			15,615
Net interest income after provision for credit losses		80,481			70,376			159,379			136,269
NON-INTEREST INCOME
Fees and service charges on deposits		2,548			2,233			4,975			4,353
Loan servicing revenue		3,216			3,377			6,580			6,757
Loan servicing asset revaluation		(2,468	)		(865	)		(3,171	)		(209	)
ATM and interchange fees		1,163			1,112			2,238			2,175
Change in fair value of equity securities, net		(390	)		193			2			543
Net gains on sales of loans		6,036			5,704			11,569			10,852
Wealth management and trust income		942			1,039			2,099			1,963
Other non-interest income		1,797			1,498			4,025			3,002
Total non-interest income		12,844			14,291			28,317			29,436
NON-INTEREST EXPENSE
Salaries and employee benefits		33,911			29,642			67,864			60,036
Occupancy and equipment expense, net		4,639			4,404			9,923			8,848
Impairment charge on assets held for sale		—			—			—			20
Loan and lease related expenses		741			488			1,426			1,451
Legal, audit and other professional fees		3,708			3,675			6,427			6,789
Data processing		4,036			4,272			8,181			8,055
Net (gain) loss recognized on other real estate owned and other related expenses		(62	)		288			(160	)		185
Other intangible assets amortization expense		1,345			1,455			2,690			2,910
Other non-interest expense		4,892			5,104			10,668			9,834
Total non-interest expense		53,210			49,328			107,019			98,128
INCOME BEFORE PROVISION FOR INCOME TAXES		40,115			35,339			80,677			67,577
PROVISION FOR INCOME TAXES		10,444			9,232			20,566			17,525
NET INCOME	$	29,671		$	26,107		$	60,111		$	50,052
EARNINGS PER COMMON SHARE
Basic	$	0.68		$	0.70		$	1.39		$	1.35
Diluted	$	0.68		$	0.70		$	1.37		$	1.34

See accompanying Notes to Unaudited Interim Condensed Consolidated Financial Statements.

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(dollars in thousands)	2024			2023			2024			2023
Net income	$	29,671		$	26,107		$	60,111		$	50,052
Securities available-for-sale
Unrealized holding gains (losses) arising during the period		(3,169	)		(13,822	)		(12,128	)		777
Tax effect		846			3,693			3,235			(207	)
Net of tax		(2,323	)		(10,129	)		(8,893	)		570
Cash flow hedges
Unrealized holding gains arising during the period		1,670			8,515			6,201			8,709
Reclassification adjustments for net gains included in net income		(4,719	)		(3,863	)		(9,555	)		(5,819	)
Tax effect		813			(1,243	)		895			(772	)
Net of tax		(2,236	)		3,409			(2,459	)		2,118
Total other comprehensive income (loss)		(4,559	)		(6,720	)		(11,352	)		2,688
Comprehensive income	$	25,112		$	19,387		$	48,759		$	52,740

See accompanying Notes to Unaudited Interim Condensed Consolidated Financial Statements.

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)


						Additional									Accumulated Other			Total
(dollars in thousands,	Common Stock					Paid-In			Retained			Treasury			Comprehensive			Stockholders’
except share data)	Shares			Amount		Capital			Earnings			Stock			Income (Loss)			Equity
Balance, March 31, 2023		37,713,427		$	390	$	598,103		$	356,365		$	(51,066	)	$	(108,142	)	$	795,650
Net income		—			—		—			26,107			—			—			26,107
Other comprehensive (loss), net of tax		—			—		—			—			—			(6,720	)		(6,720	)
Restricted stock activity, net		(547	)		1		(92	)		—			(25	)		—			(116	)
Issuance of common stock in connection with employee stock purchase plan		39,122			—		—			—			708			—			708
Cash dividends declared on common stock ($0.09 per share)		—			—		—			(3,394	)		—			—			(3,394	)
Share-based compensation expense		—			—		1,707

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10-K	[2021-03-04]
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10-K	[2018-03-30]
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S-1	[2017-05-31]