Byline Bancorp, Inc. (the “Company” or “Byline”)(NYSE: BY), the parent company of Byline Bank (the “Bank”), today reported net income of $13.1 million, or $0.34 per diluted share, for the third quarter of 2020, compared with net income of $9.1 million, or $0.24 per diluted share, for the second quarter of 2020, and net income of $15.3 million, or $0.39 per diluted share, for the third quarter of 2019.
Alberto J. Paracchini, President and Chief Executive Officer of Byline, commented, "Our results for the quarter continues to show solid performance in a challenging operating environment. We saw strong growth in pre-tax, pre-provision income driven by improved business activity, strong fee income and disciplined expense management. This allowed us to continue to build our allowance for loan and lease losses and add to our capital base.
“This quarter we also announced the additional consolidation of 11 branch locations in order to better align our spending with current customer behaviors and continue investing in our digital capabilities and franchise. Looking forward, our focus remains on supporting new and existing customers, executing our strategy and growing the value of our franchise,” said Mr. Paracchini.
Third Quarter 2020 Updates
Branch Consolidations
On September 18, 2020, we announced plans to optimize our branch network as part of efforts to accommodate changing customer behaviors while also recognizing operating efficiencies. Byline Bank plans to consolidate 11 of its 57 full-service offices, or approximately 20% of its branch network. Most of the impacted branches are located within two miles of another Byline Bank branch that will continue to operate within the respective market. These branch consolidations are scheduled to commence on December 31, 2020 and will result in a one-time charge of approximately $5.9 million, including $696,000 recognized during the third quarter 2020 related to salaries and employee benefit expenses. We anticipate annualized cost savings of approximately $4.3 million beginning in 2021, an estimated 25% of which will be utilized to increase investment in our digital banking platform and the continued renovation and upgrading of other retail branches.
Deferrals and Paycheck Protection Program
We continue working with our customers and borrowers impacted by the pandemic through deferrals and PPP loans. During the third quarter 2020:
-
Active deferrals on loans and leases decreased to $27.9 million, or 0.7%2 of loans and leases at September 30, 2020, from $204.1 million or 5.4%2 of loans and leases at June 30, 2020.
- Active second deferrals on loans and leases decreased in the quarter to $19.5 million at September 30, 2020 from $34.4 million at June 30, 2020.
- Continued processing PPP loans efficiently through our SBA platform and funded over 165 loans totaling $8.9 million in the third quarter 2020.
- Over $160 million of PPP loans in various stages of the SBA forgiveness process as of October 20, 2020.
2 | Excludes PPP loans. |
The following table presents information regarding the net PPP loans as of September 30, 2020:
PPP Loan Size | ||||||||||||||||||||
(dollars in thousands) | $0 - $50,000 | $50,001 - $150,000 | $150,001 - $2,000,000 | Over $2,000,000 | Total | |||||||||||||||
Principal outstanding | $ | 37,993 | $ | 84,385 | $ | 428,361 | $ | 84,639 | $ | 635,378 | ||||||||||
Unearned processing fee | (1,479 | ) | (3,254 | ) | (12,157 | ) | (653 | ) | (17,543 | ) | ||||||||||
Deferred cost | 2,138 | 1,089 | 1,098 | 31 | 4,356 | |||||||||||||||
PPP loans, net | $ | 38,652 | $ | 82,220 | $ | 417,302 | $ | 84,017 | $ | 622,191 | ||||||||||
Number of loans | 1,831 | 951 | 958 | 27 | 3,767 | |||||||||||||||
STATEMENTS OF OPERATIONS
Net Interest Income
The following table presents net interest income for the periods indicated:
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
(dollars in thousands) | September 30, | June 30, | March 31, | December 31, | September 30, | September 30, | September 30, | |||||||||||||||||||||
2020 | 2020 | 2020 | 2019 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
INTEREST AND DIVIDEND INCOME | ||||||||||||||||||||||||||||
Interest and fees on loans and leases | $ | 51,036 | $ | 50,153 | $ | 54,158 | $ | 58,203 | $ | 63,391 | $ | 155,347 | $ | 177,298 | ||||||||||||||
Interest on securities | 7,070 | 7,530 | 8,016 | 7,212 | 7,040 | 22,616 | 19,807 | |||||||||||||||||||||
Other interest and dividend income | 128 | 222 | 992 | 500 | 598 | 1,342 | 1,794 | |||||||||||||||||||||
Total interest and dividend income | 58,234 | 57,905 | 63,166 | 65,915 | 71,029 | 179,305 | 198,899 | |||||||||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||||||||||
Deposits | 2,760 | 4,246 | 7,804 | 9,325 | 9,618 | 14,810 | 27,000 | |||||||||||||||||||||
Other borrowings | 465 | 476 | 1,897 | 1,989 | 2,835 | 2,838 | 7,266 | |||||||||||||||||||||
Subordinated notes and debentures | 1,485 | 574 | 640 | 687 | 738 | 2,699 | 2,262 | |||||||||||||||||||||
Total interest expense | 4,710 | 5,296 | 10,341 | 12,001 | 13,191 | 20,347 | 36,528 | |||||||||||||||||||||
Net interest income | $ | 53,524 | $ | 52,609 | $ | 52,825 | $ | 53,914 | $ | 57,838 | $ | 158,958 | $ | 162,371 | ||||||||||||||
The following table presents the average interest-earning assets and average interest-bearing liabilities for the periods indicated:
For the Three Months Ended | ||||||||||||||||||||||||
September 30, 2020 | June 30, 2020 | |||||||||||||||||||||||
(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 | $ | 48,678 | $ | 25 | 0.20 | % | $ | 58,971 | $ | 25 | 0.17 | % | ||||||||||||
Loans and leases(1) | 4,360,203 | 51,036 | 4.66 | % | 4,283,654 | 50,153 | 4.71 | % | ||||||||||||||||
Taxable securities | 1,364,516 | 6,341 | 1.85 | % | 1,243,604 | 7,021 | 2.27 | % | ||||||||||||||||
Tax-exempt securities(2) | 143,157 | 832 | 2.31 | % | 117,340 | 706 | 2.42 | % | ||||||||||||||||
Total interest-earning assets | $ | 5,916,554 | $ | 58,234 | 3.92 | % | $ | 5,703,569 | $ | 57,905 | 4.08 | % | ||||||||||||
Allowance for loan and lease losses | (53,964 | ) | (43,009 | ) | ||||||||||||||||||||
All other assets | 538,700 | 526,414 | ||||||||||||||||||||||
TOTAL ASSETS | $ | 6,401,290 | $ | 6,186,974 | ||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||
Interest checking | $ | 565,917 | $ | 226 | 0.16 | % | $ | 392,070 | $ | 165 | 0.17 | % | ||||||||||||
Money market accounts | 1,202,016 | 634 | 0.21 | % | 1,214,713 | 946 | 0.31 | % | ||||||||||||||||
Savings | 535,396 | 64 | 0.05 | % | 511,049 | 61 | 0.05 | % | ||||||||||||||||
Time deposits | 870,227 | 1,836 | 0.84 | % | 976,710 | 3,074 | 1.27 | % | ||||||||||||||||
Total interest-bearing deposits | 3,173,556 | 2,760 | 0.35 | % | 3,094,542 | 4,246 | 0.55 | % | ||||||||||||||||
Other borrowings | 538,237 | 465 | 0.34 | % | 534,766 | 476 | 0.36 | % | ||||||||||||||||
Subordinated notes and debentures | 100,756 | 1,485 | 5.86 | % | 40,180 | 574 | 5.75 | % | ||||||||||||||||
Total borrowings | 638,993 | 1,950 | 1.21 | % | 574,946 | 1,050 | 0.73 | % | ||||||||||||||||
Total interest-bearing liabilities | $ | 3,812,549 | $ | 4,710 | 0.49 | % | $ | 3,669,488 | $ | 5,296 | 0.58 | % | ||||||||||||
Non-interest-bearing demand deposits | 1,742,787 | 1,692,723 | ||||||||||||||||||||||
Other liabilities | 54,843 | 48,884 | ||||||||||||||||||||||
Total stockholders’ equity | 791,111 | 775,879 | ||||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 6,401,290 | $ | 6,186,974 | ||||||||||||||||||||
Net interest spread(3) | 3.43 | % | 3.50 | % | ||||||||||||||||||||
Net interest income | $ | 53,524 | $ | 52,609 | ||||||||||||||||||||
Net interest margin(4) | 3.60 | % | 3.71 | % | ||||||||||||||||||||
Net loan accretion impact on margin | $ | 3,911 | 0.26 | % | $ | 3,172 | 0.22 | |||||||||||||||||
(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. |
Net interest income for the third quarter of 2020 was $53.5 million, an increase of $915,000, or 1.7%, from the second quarter of 2020.
The increase in net interest income was primarily due to:
- A decrease of $1.5 million in interest expense on deposits, due to maturities of higher-rate time deposits and lower rates paid on money market accounts;
- An increase of $883,000 in interest income on loans and leases, due to higher accretion on acquired loans resulting from cash recoveries;
Offset by:
- An increase of $900,000 in interest expense on total borrowings, primarily driven by a full quarter of interest expense on subordinated notes; and,
- A decrease of $680,000 in interest income on taxable securities, due to increased prepayments on securities and lower yields.
Net interest margin for the third quarter of 2020 was 3.60%, a decrease of 11 basis points compared to 3.71% for the second quarter of 2020. Total net accretion income on acquired loans contributed 26 basis points to the net interest margin for the third quarter of 2020 compared to 22 basis points for the second quarter of 2020, an increase of 4 basis points. The net interest margin decrease during the third quarter of 2020 was primarily driven by decreased loan and lease yields largely resulting from the impact of decreases in short-term rates and lower-yielding PPP loan balances. Net interest margin was also impacted by an increase in borrowed funds costs due to the full quarter impact of interest accrual on the subordinated notes. These decreases were partly offset by a decrease in the cost of funds and higher average non-interest-bearing demand deposit balances.
The average cost of total deposits was 0.22% for the third quarter of 2020, a decrease of 14 basis points compared to the second quarter of 2020, mainly due to a lower average cost of money market accounts and time deposits as well as a favorable change in deposit mix. Average non-interest-bearing demand deposits grew by $50.1 million, while average time deposits decreased by $106.5 million. Average non-interest-bearing demand deposits were 35.4% of average total deposits for the third quarter of 2020 unchanged compared to the second quarter of 2020.
Provision for Loan and Lease Losses
The provision for loan and lease losses was $15.7 million for the third quarter of 2020, an increase of $222,000 compared to $15.5 million for the second quarter of 2020. The third quarter included allocations of $14.8 million for originated loans and leases, $1.0 million for acquired impaired loans, and a credit of $118,000 for acquired non-impaired loans. The provision during the third quarter of 2020 included $6.4 million in specific impairments, including $3.3 million related to the unguaranteed portion of government guaranteed loans. The third quarter provision included $8.4 million to address the continued economic uncertainty caused by the COVID-19 pandemic and the uncertainty around additional government relief.
Non-interest Income
The following table presents the components of non-interest income for the periods indicated:
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
(dollars in thousands) | September 30, | June 30, | March 31, | December 31, | September 30, | September 30, | September 30, | |||||||||||||||||||||
2020 | 2020 | 2020 | 2019 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
NON-INTEREST INCOME | ||||||||||||||||||||||||||||
Fees and service charges on deposits | $ | 1,603 | $ | 1,455 | $ | 1,673 | $ | 1,635 | $ | 1,612 | $ | 4,731 | $ | 4,823 | ||||||||||||||
Loan servicing revenue | 2,936 | 2,980 | 2,758 | 2,834 | 2,692 | 8,674 | 7,861 | |||||||||||||||||||||
Loan servicing asset revaluation | 1,122 | (711 | ) | (3,064 | ) | (2,545 | ) | (1,610 | ) | (2,653 | ) | (4,094 | ) | |||||||||||||||
ATM and interchange fees | 1,028 | 845 | 1,216 | 1,150 | 973 | 3,089 | 2,635 | |||||||||||||||||||||
Net gains on sales of securities available-for-sale | 1,037 | — | 1,375 | — | 178 | 2,412 | 1,151 | |||||||||||||||||||||
Change in fair value of equity securities, net | 154 | 766 | (619 | ) | 381 | (15 | ) | 301 | 1,035 | |||||||||||||||||||
Net gains on sales of loans | 12,671 | 6,456 | 4,773 | 8,735 | 9,405 | 23,900 | 23,110 | |||||||||||||||||||||
Wealth management and trust income | 693 | 608 | 669 | 704 | 653 | 1,970 | 1,874 | |||||||||||||||||||||
Other non-interest income | 1,008 | 389 | 392 | 1,622 | 918 | 1,789 | 2,582 | |||||||||||||||||||||
Total non-interest income | $ | 22,252 | $ | 12,788 | $ | 9,173 | $ | 14,516 | $ | 14,806 | $ | 44,213 | $ | 40,977 | ||||||||||||||
Non-interest income for the third quarter of 2020 was $22.3 million, an increase of $9.5 million, or 74.0% compared to $12.8 million for the second quarter of 2020.
The increase in total non-interest income was primarily due to:
- An increase of $6.2 million in net gains on sales of loans, mainly due to an increase in volume of sales of government guaranteed loans and higher premiums received on loans sold;
- A $1.8 million increase in loan servicing asset revaluation due to lower prepayments speeds and higher premiums on government guaranteed loans; and,
- An increase of $1.0 million in net gains on sales of securities available-for-sale as a result of sales during the third quarter of 2020 compared to no sales during the second quarter of 2020.
During the third quarter of 2020, we sold $121.2 million of U.S. government guaranteed loans compared to $78.7 million during the second quarter of 2020. The increase in sales was driven by increased SBA 7(a) origination volumes and higher demand for U.S. government guaranteed loans.
Non-interest Expense
The following table presents the components of non-interest expense for the periods indicated:
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
(dollars in thousands) | September 30, | June 30, | March 31, | December 31, | September 30, | September 30, | September 30, | |||||||||||||||||||||
2020 | 2020 | 2020 | 2019 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
NON-INTEREST EXPENSE | ||||||||||||||||||||||||||||
Salaries and employee benefits | $ | 23,126 | $ | 19,405 | $ | 24,666 | $ | 24,228 | $ | 24,537 | $ | 67,197 | $ | 71,081 | ||||||||||||||
Occupancy and equipment expense, net | 5,220 | 5,359 | 5,524 | 5,241 | 4,512 | 16,103 | 14,530 | |||||||||||||||||||||
Loan and lease related expenses | 2,053 | 1,260 | 1,311 | 2,648 | 1,949 | 4,624 | 5,367 | |||||||||||||||||||||
Legal, audit and other professional fees | 2,390 | 2,078 | 2,334 | 2,340 | 4,066 | 6,802 | 9,113 | |||||||||||||||||||||
Data processing | 2,661 | 2,826 | 2,665 | 2,678 | 4,062 | 8,152 | 11,055 | |||||||||||||||||||||
Net loss recognized on other real estate owned and other related expenses | 349 | 456 | 519 | 122 | 95 | 1,324 | 543 | |||||||||||||||||||||
Other intangible assets amortization expense | 1,947 | 1,892 | 1,893 | 2,002 | 2,003 | 5,732 | 5,735 | |||||||||||||||||||||
Other non-interest expense | 3,959 | 3,736 | 4,615 | 4,435 | 4,224 | 12,310 | 12,657 | |||||||||||||||||||||
Total non-interest expense | $ | 41,705 | $ | 37,012 | $ | 43,527 | $ | 43,694 | $ | 45,448 | $ | 122,244 | $ | 130,081 | ||||||||||||||
Non-interest expense for the third quarter of 2020 was $41.7 million, an increase of $4.7 million, or 12.7%, from $37.0 million for the second quarter of 2020.
The increase in total non-interest expense was primarily due to:
- An increase of $3.7 million in salaries and employee benefits, mainly due to costs deferred as a result of PPP loan originations during the second quarter of 2020; and
- An increase of $793,000 in loan and lease related expenses mostly due to higher expenses associated with government guaranteed loan originations.
Our efficiency ratio was 52.47% for the third quarter of 2020 compared to 53.70% for the second quarter of 2020.
INCOME TAXES
We recorded income tax expense of $5.3 million during the third quarter of 2020, an effective tax rate of 28.7% compared to $3.7 million during the second quarter of 2020, an effective tax rate of 29.0%.
STATEMENTS OF FINANCIAL CONDITION
Total assets were $6.5 billion at September 30, 2020, an increase of $103.8 million compared to $6.4 billion at June 30, 2020, and an increase of $1.1 billion compared to $5.4 billion at September 30, 2019.
The current quarter increase was primarily due to:
- An increase in securities of $82.5 million, principally a result of purchases of mortgage-backed securities during the quarter;
- An increase in loans held for sale of $46.0 million, due to the timing of government guaranteed loans sold during the quarter; and,
- An increase in accrued interest receivable and other assets of $38.0 million due to timing of settlement of government guaranteed loans during the quarter.
Partially offset by:
- A decrease in cash and cash equivalents of $38.9 million, due to the increase in securities for the quarter;
- A decrease in loans and leases of $16.6 million, due to decreases in the real estate portfolios offset by increases to lease financing receivables; and,
- An increase in allowance for loan and lease losses of $10.0 million, due to continued economic uncertainty from the COVID-19 pandemic.
The following table shows our allocation of the originated, acquired impaired, and acquired non-impaired loans and leases at the dates indicated:
September 30, 2020 | June 30, 2020 | September 30, 2019 | ||||||||||||||||||||||
(dollars in thousands) | Amount | % of Total | Amount | % of Total | Amount | % of Total | ||||||||||||||||||
Originated loans and leases | ||||||||||||||||||||||||
Commercial real estate | $ | 919,862 | 21.0 | % | $ | 919,510 | 20.9 | % | $ | 772,559 | 20.2 | % | ||||||||||||
Residential real estate | 458,364 | 10.5 | % | 480,692 | 10.9 | % | 497,839 | 13.0 | % | |||||||||||||||
Construction, land development, and other land | 234,017 | 5.3 | % | 219,261 | 5.0 | % | 236,780 | 6.2 | % | |||||||||||||||
Commercial and industrial | 1,214,099 | 27.8 | % | 1,200,996 | 27.4 | % | 1,096,400 | 28.6 | % | |||||||||||||||
Paycheck protection program | 622,191 | 14.2 | % | 611,664 | 13.9 | % | — | 0.0 | % | |||||||||||||||
Installment and other | 2,346 | 0.1 | % | 2,714 | 0.1 | % | 7,818 | 0.2 | % | |||||||||||||||
Leasing financing receivables | 185,700 | 4.2 | % | 160,741 | 3.7 | % | 156,758 | 4.1 | % | |||||||||||||||
Total originated loans and leases | $ | 3,636,579 | 83.1 | % | $ | 3,595,578 | 81.9 | % | $ | 2,768,154 | 72.3 | % | ||||||||||||
Acquired impaired loans | ||||||||||||||||||||||||
Commercial real estate | $ | 117,114 | 2.7 | % | $ | 126,405 | 2.9 | % | $ | 142,435 | 3.7 | % | ||||||||||||
Residential real estate | 84,197 | 1.9 | % | 90,784 | 2.1 | % | 109,409 | 2.9 | % | |||||||||||||||
Construction, land development, and other land | 4,804 | 0.1 | % | 4,784 | 0.1 | % | 4,562 | 0.1 | % | |||||||||||||||
Commercial and industrial | 10,489 | 0.3 | % | 13,485 | 0.3 | % | 18,349 | 0.5 | % | |||||||||||||||
Installment and other | 214 | 0.0 | % | 226 | 0.0 | % | 267 | 0.0 | % | |||||||||||||||
Total acquired impaired loans | $ | 216,818 | 5.0 | % | $ | 235,684 | 5.4 | % | $ | 275,022 | 7.2 | % | ||||||||||||
Acquired non-impaired loans and leases | ||||||||||||||||||||||||
Commercial real estate | $ | 310,879 | 7.1 | % | $ | 305,041 | 6.9 | % | $ | 391,294 | 10.2 | % | ||||||||||||
Residential real estate | 90,835 | 2.1 | % | 99,288 | 2.2 | % | 141,855 | 3.7 | % | |||||||||||||||
Construction, land development, and other land | 213 | 0.0 | % | 21,958 | 0.5 | % | 39,657 | 1.0 | % | |||||||||||||||
Commercial and industrial | 104,221 | 2.4 | % | 116,668 | 2.7 | % | 187,413 | 4.9 | % | |||||||||||||||
Installment and other | 583 | 0.0 | % | 818 | 0.0 | % | 1,269 | 0.0 | % | |||||||||||||||
Leasing financing receivables | 14,389 | 0.3 | % | 16,087 | 0.4 | % | 26,426 | 0.7 | % | |||||||||||||||
Total acquired non-impaired loans and leases | $ | 521,120 | 11.9 | % | $ | 559,860 | 12.7 | % | $ | 787,914 | 20.5 | % | ||||||||||||
Total loans and leases | $ | 4,374,517 | 100.0 | % | $ | 4,391,122 | 100.0 | % | $ | 3,831,090 | 100.0 | % | ||||||||||||
Allowance for loan and lease losses | (61,258 | ) | (51,300 | ) | (31,585 | ) | ||||||||||||||||||
Total loans and leases, net of allowance for loan and lease losses | $ | 4,313,259 | $ | 4,339,822 | $ | 3,799,505 | ||||||||||||||||||
ASSET QUALITY
Non-Performing Assets
The following table sets forth the amounts of non-performing loans and leases (excluding acquired impaired), other real estate owned, and accruing troubled debt restructured loans at the dates indicated:
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
(dollars in thousands) | 2020 | 2020 | 2020 | 2019 | 2019 | |||||||||||||||
Non-performing assets: | ||||||||||||||||||||
Non-accrual loans and leases | $ | 43,196 | $ | 40,505 | $ | 48,964 | $ | 36,272 | $ | 39,528 | ||||||||||
Past due loans and leases 90 days or more and still accruing interest | — | — | — | — | — | |||||||||||||||
Total non-performing loans and leases | $ | 43,196 | $ | 40,505 | $ | 48,964 | $ | 36,272 | $ | 39,528 | ||||||||||
Other real estate owned | 8,150 | 8,652 | 9,273 | 9,896 | 6,502 | |||||||||||||||
Total non-performing assets | $ | 51,346 | $ | 49,157 | $ | 58,237 | $ | 46,168 | $ | 46,030 | ||||||||||
Total non-performing loans and leases as a percentage of total loans and leases | 0.99 | % | 0.92 | % | 1.27 | % | 0.96 | % | 1.03 | % | ||||||||||
Total non-performing assets as a percentage of total assets | 0.79 | % | 0.77 | % | 1.02 | % | 0.84 | % | 0.85 | % | ||||||||||
Allowance for loan and lease losses as a percentage of non-performing loans and leases | 141.81 | % | 126.65 | % | 85.45 | % | 88.05 | % | 79.91 | % | ||||||||||
Accruing troubled debt restructured loans (1) | $ | 2,293 | $ | 3,151 | $ | 1,725 | $ | 1,771 | $ | 2,204 | ||||||||||
Non-performing assets guaranteed by U.S. government: | ||||||||||||||||||||
Non-accrual loans guaranteed | $ | 3,749 | $ | 3,755 | $ | 4,957 | $ | 4,232 | $ | 4,167 | ||||||||||
Past due loans 90 days or more and still accruing interest guaranteed | — | — | — | — | — | |||||||||||||||
Total non-performing loans guaranteed | $ | 3,749 | $ | 3,755 | $ | 4,957 | $ | 4,232 | $ | 4,167 | ||||||||||
Total non-performing loans and leases not guaranteed as a percentage of total loans and leases | 0.90 | % | 0.84 | % | 1.14 | % | 0.85 | % | 0.92 | % | ||||||||||
Total non-performing assets not guaranteed as a percentage of total assets | 0.73 | % | 0.71 | % | 0.93 | % | 0.76 | % | 0.77 | % | ||||||||||
Accruing troubled debt restructured loans guaranteed (1) | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
(1) | Accruing troubled debt restructured loans are not included in total non-performing loans and leases or in non-performing assets. |
Variances in non-performing assets were:
- Non-performing loans and leases were $43.2 million at September 30, 2020, an increase of $2.7 million from $40.5 million at June 30, 2020.
- Other real estate owned was $8.2 million at September 30, 2020, a decrease of $502,000 from $8.7 million at June 30, 2020 due to sales and valuation adjustments.
U.S. government guaranteed balances of non-performing loans were $3.7 million at September 30, 2020 and $3.8 million at June 30, 2020.
Allowance for Loan and Lease Losses
The following table presents the balance and activity within the allowance for loan and lease losses for the periods indicated:
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
(dollars in thousands) | September 30, | June 30, | March 31, | December 31, | September 30, | September 30, | September 30, | |||||||||||||||||||||
2020 | 2020 | 2020 | 2019 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Allowance for loan and lease losses, beginning of period | $ | 51,300 | $ | 41,840 | $ | 31,936 | $ | 31,585 | $ | 31,132 | $ | 31,936 | $ | 25,201 | ||||||||||||||
Provision for loan and lease losses | 15,740 | 15,518 | 14,455 | 4,387 | 5,931 | 45,713 | 16,321 | |||||||||||||||||||||
Net charge-offs of loans and leases | (5,782 | ) | (6,058 | ) | (4,551 | ) | (4,036 | ) | (5,478 | ) | (16,391 | ) | (9,937 | ) | ||||||||||||||
Allowance for loan and lease losses, end of period | $ | 61,258 | $ | 51,300 | $ | 41,840 | $ | 31,936 | $ | 31,585 | $ | 61,258 | $ | 31,585 | ||||||||||||||
Allowance for loan and lease losses to period end total loans and leases held for investment | 1.40 | % | 1.17 | % | 1.08 | % | 0.84 | % | 0.82 | % | 1.40 | % | 0.82 | % | ||||||||||||||
Net charge-offs (annualized) to average loans and leases outstanding during the period | 0.53 | % | 0.57 | % | 0.48 | % | 0.42 | % | 0.56 | % | 0.53 | % | 0.36 | % | ||||||||||||||
Provision for loan and lease losses to net charge-offs during the period | 2.72x | 2.56x | 3.18x | 1.09x | 1.08x | 2.79 | x | 1.64x | ||||||||||||||||||||
The allowance for loan and lease losses as a percentage of total loans and leases held for investment increased to 1.40% at September 30, 2020 compared to 1.17% at June 30, 2020 and 0.82% at September 30, 2019. The allowance for loan and lease losses as a percentage of total loans and leases held for investment excluding PPP loans increased to 1.63% at September 30, 2020 from 1.36% at June 20, 2020.
In June 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance on the recognition of credit losses which replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses. In November 2019, the FASB delayed the effective date of the standard for smaller reporting companies, which includes emerging growth companies. Assuming we remain an emerging growth company, the standard is effective for fiscal years beginning after December 15, 2022. We are in the process of implementation and determining the impact that this new authoritative guidance will have on our consolidated financial statements.
Net Charge-Offs
Net charge-offs during the third quarter of 2020 were $5.8 million, or 0.53% of average loans and leases, on an annualized basis, a decrease of $276,000 compared to $6.1 million, or 0.57% of average loans and leases, during the second quarter of 2020, and an increase of $304,000 from $5.5 million, or 0.56% of average loans and leases, for the comparable quarter one year ago.
Net charge-offs for the third quarter of 2020 included $4.1 million in the unguaranteed portion of U.S. government guaranteed loans, while net charge-offs for the second quarter of 2020 included $2.0 million and for the third quarter of 2019 included $4.8 million in the unguaranteed portion of U.S. government guaranteed loans.
Deposits and Other Liabilities
The following table presents the composition of deposits at the dates indicated:
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
(dollars in thousands) | 2020 | 2020 | 2020 | 2019 | 2019 | |||||||||||||||
Non-interest-bearing demand deposits | $ | 1,718,682 | $ | 1,768,675 | $ | 1,290,896 | $ | 1,279,641 | $ | 1,221,431 | ||||||||||
Interest-bearing checking accounts | 584,682 | 503,909 | 355,678 | 338,185 | 372,049 | |||||||||||||||
Money market demand accounts | 1,153,433 | 1,233,748 | 1,104,276 | 881,387 | 745,154 | |||||||||||||||
Other savings | 542,741 | 525,043 | 486,131 | 475,839 | 471,878 | |||||||||||||||
Time deposits (below $250,000) | 622,328 | 710,429 | 800,759 | 916,723 | 966,866 | |||||||||||||||
Time deposits ($250,000 and above) | 188,379 | 216,541 | 201,096 | 255,802 | 302,936 | |||||||||||||||
Total deposits | $ | 4,810,245 | $ | 4,958,345 | $ | 4,238,836 | $ | 4,147,577 | $ | 4,080,314 | ||||||||||
Total deposits were $4.8 billion at September 30, 2020, a decrease of $148.1 million, or 3.0% compared to June 30, 2020. Non-interest-bearing deposits were 35.7% of total deposits at September 30, 2020 and June 30, 2020.
The decrease in the current quarter was primarily due to:
- A decrease in non-interest-bearing deposits of $50.0 million, mostly due to seasonality;
- A decrease in money market demand deposits of $80.3 million, due to a decrease in purchased money market deposits that were replaced by lower-cost funding sources; and,
- A decrease in time deposits of $116.3 million, principally driven by decreases in personal certificates.
Partially offset by:
- An increase in interest-bearing checking accounts of $80.8 million, mostly due to increases in public funds in interest bearing checking accounts.
Total borrowings and other liabilities were $891.6 million at September 30, 2020, an increase of $237.3 million from $654.2 million at June 30, 2020, primarily driven by an increase in Federal Home Loan Bank advances and the additional subordinated notes offering during the quarter, as described in more detail below.
Stockholders’ Equity
Total stockholders’ equity was $794.7 million at September 30, 2020, an increase of $13.8 million from $780.9 million at June 30, 2020. The increase was primarily due to net income generated during the quarter less dividends declared.
The following table presents the actual regulatory capital dollar amounts and ratios of the Company and Byline Bank as of September 30, 2020:
Actual | Minimum Capital Required | Required to be Considered Well Capitalized | ||||||||||||||||||||||
September 30, 2020 | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||
Total capital to risk weighted assets: | ||||||||||||||||||||||||
Company | $ | 757,133 | 16.67 | % | $ | 363,274 | 8.00 | % | N/A | N/A | ||||||||||||||
Bank | 656,395 | 14.50 | % | 362,063 | 8.00 | % | $ | 452,579 | 10.00 | % | ||||||||||||||
Tier 1 capital to risk weighted assets: | ||||||||||||||||||||||||
Company | $ | 625,287 | 13.77 | % | $ | 272,456 | 6.00 | % | N/A | N/A | ||||||||||||||
Bank | 599,736 | 13.25 | % | 271,547 | 6.00 | % | $ | 362,063 | 8.00 | % | ||||||||||||||
Common Equity Tier 1 (CET1) to risk weighted assets: | ||||||||||||||||||||||||
Company | $ | 569,849 | 12.55 | % | $ | 204,342 | 4.50 | % | N/A | N/A | ||||||||||||||
Bank | 599,736 | 13.25 | % | 203,661 | 4.50 | % | $ | 294,176 | 6.50 | % | ||||||||||||||
Tier 1 capital to average assets: | ||||||||||||||||||||||||
Company | $ | 625,287 | 10.93 | % | $ | 228,874 | 4.00 | % | N/A | N/A | ||||||||||||||
Bank | 599,736 | 10.49 | % | 228,729 | 4.00 | % | $ | 285,912 | 5.00 | % | ||||||||||||||
Capital ratios for the period presented are based on the Basel III regulatory capital framework as applied to our current business and operations, and are subject to, among other things, completion and filing of our regulatory reports and ongoing regulatory review and implementation guidance.
On August 3, 2020, we completed a public offering of an additional $25.0 million aggregate principal amount of 6.00% fixed-to-floating rate subordinated notes due July 1, 2030. The subordinated notes are part of the same series of notes as the $50.0 million in aggregate principal amount of subordinated notes issued on June 26, 2020. The notes bear a fixed interest rate of 6.00% until July 1, 2025 or earlier redemption, and a floating interest rate equal to a benchmark rate, which is expected to be three-month term SOFR plus 588 basis points thereafter until maturity or earlier redemption. The subordinated notes are intended to qualify as Tier 2 capital for regulatory capital purposes.
Conference Call, Webcast and Slide Presentation
We will host a conference call and webcast at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) on Friday, October 23, 2020 to discuss our quarterly financial results. Analysts and investors may participate in the question-and-answer session. The call can be accessed via telephone at (877) 512-8755. A recorded replay can be accessed through November 7, 2020 by dialing (877) 344-7529; passcode: 10146069.
A slide presentation relating to the third quarter 2020 results will be accessible prior to the scheduled conference call. The slide presentation and webcast of the conference call can be accessed on the News and Events page of the Company’s investor relations website at www.bylinebancorp.com.
About Byline Bancorp, Inc.
Headquartered in Chicago, Byline Bancorp, Inc. is the parent company for Byline Bank, a full service commercial bank serving small- and medium-sized businesses, financial sponsors, and consumers. Byline Bank has approximately $6.5 billion in assets and operates more than 50 full service branch locations throughout the Chicago and Milwaukee metropolitan areas. Byline Bank offers a broad range of commercial and retail banking products and services including small ticket equipment leasing solutions and is one of the top five Small Business Administration lenders in the United States.
Non-GAAP Financial Measures
This release contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These measures include adjusted net income, adjusted diluted earnings per share, adjusted efficiency ratio, adjusted non-interest expense to average assets, non-interest income to total revenues, adjusted return on average stockholders’ equity, adjusted return on average assets, pre-tax pre-provision return on average assets, adjusted pre-tax pre-provision return on average assets, tangible book value per common share, tangible common equity to tangible assets, return on average tangible common stockholders' equity, and adjusted return on average tangible common stockholders' equity. Management believes that these non-GAAP financial measures provide useful information to management and investors that is supplementary to the Company’s financial condition, results of operations and cash flows computed in accordance with GAAP; however, management acknowledges that our non-GAAP financial measures have a number of limitations. As such, these disclosures should not be viewed as a substitute for results determined in accordance with GAAP financial measures that we and other companies use. Management also uses these measures for peer comparison. See “Reconciliation of Non-GAAP Financial Measures” in the financial schedules included in this press release for a reconciliation of the non-GAAP financial measures to the comparable GAAP financial measures. Additionally, please refer to the Company’s Annual Report on Form 10-K for the detailed definitions of these non-GAAP financial measures.
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 its Annual Report on Form 10-K for the year ended December 31, 2019, and its Quarterly Report on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020. 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.
BYLINE BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited) | ||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
(dollars in thousands) | 2020 | 2020 | 2020 | 2019 | 2019 | |||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and due from banks | $ | 47,433 | $ | 51,818 | $ | 45,233 | $ | 48,228 | $ | 75,275 | ||||||||||
Interest bearing deposits with other banks | 53,645 | 88,113 | 74,386 | 32,509 | 33,564 | |||||||||||||||
Cash and cash equivalents | 101,078 | 139,931 | 119,619 | 80,737 | 108,839 | |||||||||||||||
Equity and other securities, at fair value | 8,335 | 8,181 | 7,413 | 8,031 | 7,648 | |||||||||||||||
Securities available-for-sale, at fair value | 1,509,211 | 1,426,871 | 1,299,483 | 1,186,292 | 1,031,933 | |||||||||||||||
Securities held-to-maturity, at amortized cost | 4,400 | 4,404 | 4,408 | 4,412 | 4,417 | |||||||||||||||
Restricted stock, at cost | 9,652 | 6,232 | 24,197 | 22,127 | 24,331 | |||||||||||||||
Loans held for sale | 49,049 | 3,031 | 13,299 | 11,732 | 7,176 | |||||||||||||||
Loans and leases: | ||||||||||||||||||||
Loans and leases | 4,374,517 | 4,391,122 | 3,860,259 | 3,785,661 | 3,831,090 | |||||||||||||||
Allowance for loan and lease losses | (61,258 | ) | (51,300 | ) | (41,840 | ) | (31,936 | ) | (31,585 | ) | ||||||||||
Net loans and leases | 4,313,259 | 4,339,822 | 3,818,419 | 3,753,725 | 3,799,505 | |||||||||||||||
Servicing assets, at fair value | 21,267 | 18,351 | 17,800 | 19,471 | 19,939 | |||||||||||||||
Premises and equipment, net | 94,638 | 95,546 | 96,446 | 96,140 | 96,006 | |||||||||||||||
Other real estate owned, net | 8,150 | 8,652 | 9,273 | 9,896 | 6,502 | |||||||||||||||
Goodwill and other intangible assets, net | 174,523 | 176,470 | 178,362 | 180,255 | 179,543 | |||||||||||||||
Bank-owned life insurance | 9,952 | 9,896 | 9,898 | 9,750 | 9,699 | |||||||||||||||
Deferred tax assets, net | 35,945 | 37,082 | 33,845 | 38,315 | 33,388 | |||||||||||||||
Accrued interest receivable and other assets | 157,054 | 119,049 | 102,292 | 100,926 | 109,352 | |||||||||||||||
Total assets | $ | 6,496,513 | $ | 6,393,518 | $ | 5,734,754 | $ | 5,521,809 | $ | 5,438,278 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
LIABILITIES | ||||||||||||||||||||
Non-interest-bearing demand deposits | $ | 1,718,682 | $ | 1,768,675 | $ | 1,290,896 | $ | 1,279,641 | $ | 1,221,431 | ||||||||||
Interest-bearing deposits | 3,091,563 | 3,189,670 | 2,947,940 | 2,867,936 | 2,858,883 | |||||||||||||||
Total deposits | 4,810,245 | 4,958,345 | 4,238,836 | 4,147,577 | 4,080,314 | |||||||||||||||
Other borrowings | 710,560 | 510,414 | 640,647 | 539,638 | 538,290 | |||||||||||||||
Subordinated notes, net | 73,299 | 48,777 | — | — | — | |||||||||||||||
Junior subordinated debentures issued to capital trusts, net | 36,331 | 36,206 | 37,462 | 37,334 | 37,207 | |||||||||||||||
Accrued expenses and other liabilities | 71,382 | 58,841 | 55,142 | 47,145 | 46,601 | |||||||||||||||
Total liabilities | 5,701,817 | 5,612,583 | 4,972,087 | 4,771,694 | 4,702,412 | |||||||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
Preferred stock | 10,438 | 10,438 | 10,438 | 10,438 | 10,438 | |||||||||||||||
Common stock | 383 | 381 | 380 | 379 | 378 | |||||||||||||||
Additional paid-in capital | 586,057 | 583,307 | 582,517 | 580,965 | 579,564 | |||||||||||||||
Retained earnings | 180,162 | 168,444 | 160,652 | 159,033 | 144,525 | |||||||||||||||
Treasury stock | (1,668 | ) | (1,668 | ) | (1,668 | ) | — | — | ||||||||||||
Accumulated other comprehensive income (loss), net of tax | 19,324 | 20,033 | 10,348 | (700 | ) | 961 | ||||||||||||||
Total stockholders’ equity | 794,696 | 780,935 | 762,667 | 750,115 | 735,866 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 6,496,513 | $ | 6,393,518 | $ | 5,734,754 | $ | 5,521,809 | $ | 5,438,278 | ||||||||||
BYLINE BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | ||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
(dollars in thousands, except per share data) | September 30, | June 30, | March 31, | December 31, | September 30, | September 30, | September 30, | |||||||||||||||||||||
2020 | 2020 | 2020 | 2019 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
INTEREST AND DIVIDEND INCOME | ||||||||||||||||||||||||||||
Interest and fees on loans and leases | $ | 51,036 | $ | 50,153 | $ | 54,158 | $ | 58,203 | $ | 63,391 | $ | 155,347 | $ | 177,298 | ||||||||||||||
Interest on securities | 7,070 | 7,530 | 8,016 | 7,212 | 7,040 | 22,616 | 19,807 | |||||||||||||||||||||
Other interest and dividend income | 128 | 222 | 992 | 500 | 598 | 1,342 | 1,794 | |||||||||||||||||||||
Total interest and dividend income | 58,234 | 57,905 | 63,166 | 65,915 | 71,029 | 179,305 | 198,899 | |||||||||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||||||||||
Deposits | 2,760 | 4,246 | 7,804 | 9,325 | 9,618 | 14,810 | 27,000 | |||||||||||||||||||||
Other borrowings | 465 | 476 | 1,897 | 1,989 | 2,835 | 2,838 | 7,266 | |||||||||||||||||||||
Subordinated notes and debentures | 1,485 | 574 | 640 | 687 | 738 | 2,699 | 2,262 | |||||||||||||||||||||
Total interest expense | 4,710 | 5,296 | 10,341 | 12,001 | 13,191 | 20,347 | 36,528 | |||||||||||||||||||||
Net interest income | 53,524 | 52,609 | 52,825 | 53,914 | 57,838 | 158,958 | 162,371 | |||||||||||||||||||||
PROVISION FOR LOAN AND LEASE LOSSES | 15,740 | 15,518 | 14,455 | 4,387 | 5,931 | 45,713 | 16,321 | |||||||||||||||||||||
Net interest income after provision for loan and lease losses | 37,784 | 37,091 | 38,370 | 49,527 | 51,907 | 113,245 | 146,050 | |||||||||||||||||||||
NON-INTEREST INCOME | ||||||||||||||||||||||||||||
Fees and service charges on deposits | 1,603 | 1,455 | 1,673 | 1,635 | 1,612 | 4,731 | 4,823 | |||||||||||||||||||||
Loan servicing revenue | 2,936 | 2,980 | 2,758 | 2,834 | 2,692 | 8,674 | 7,861 | |||||||||||||||||||||
Loan servicing asset revaluation | 1,122 | (711 | ) | (3,064 | ) | (2,545 | ) | (1,610 | ) | (2,653 | ) | (4,094 | ) | |||||||||||||||
ATM and interchange fees | 1,028 | 845 | 1,216 | 1,150 | 973 | 3,089 | 2,635 | |||||||||||||||||||||
Net gains on sales of securities available-for-sale | 1,037 | — | 1,375 | — | 178 | 2,412 | 1,151 | |||||||||||||||||||||
Change in fair value of equity securities, net | 154 | 766 | (619 | ) | 381 | (15 | ) | 301 | 1,035 | |||||||||||||||||||
Net gains on sales of loans | 12,671 | 6,456 | 4,773 | 8,735 | 9,405 | 23,900 | 23,110 | |||||||||||||||||||||
Wealth management and trust income | 693 | 608 | 669 | 704 | 653 | 1,970 | 1,874 | |||||||||||||||||||||
Other non-interest income | 1,008 | 389 | 392 | 1,622 | 918 | 1,789 | 2,582 | |||||||||||||||||||||
Total non-interest income | 22,252 | 12,788 | 9,173 | 14,516 | 14,806 | 44,213 | 40,977 | |||||||||||||||||||||
NON-INTEREST EXPENSE | ||||||||||||||||||||||||||||
Salaries and employee benefits | 23,126 | 19,405 | 24,666 | 24,228 | 24,537 | 67,197 | 71,081 | |||||||||||||||||||||
Occupancy and equipment expense, net | 5,220 | 5,359 | 5,524 | 5,241 | 4,512 | 16,103 | 14,530 | |||||||||||||||||||||
Loan and lease related expenses | 2,053 | 1,260 | 1,311 | 2,648 | 1,949 | 4,624 | 5,367 | |||||||||||||||||||||
Legal, audit, and other professional fees | 2,390 | 2,078 | 2,334 | 2,340 | 4,066 | 6,802 | 9,113 | |||||||||||||||||||||
Data processing | 2,661 | 2,826 | 2,665 | 2,678 | 4,062 | 8,152 | 11,055 | |||||||||||||||||||||
Net loss recognized on other real estate owned and other related expenses | 349 | 456 | 519 | 122 | 95 | 1,324 | 543 | |||||||||||||||||||||
Other intangible assets amortization expense | 1,947 | 1,892 | 1,893 | 2,002 | 2,003 | 5,732 | 5,735 | |||||||||||||||||||||
Other non-interest expense | 3,959 | 3,736 | 4,615 | 4,435 | 4,224 | 12,310 | 12,657 | |||||||||||||||||||||
Total non-interest expense | 41,705 | 37,012 | 43,527 | 43,694 | 45,448 | 122,244 | 130,081 | |||||||||||||||||||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 18,331 | 12,867 | 4,016 | 20,349 | 21,265 | 35,214 | 56,946 | |||||||||||||||||||||
PROVISION FOR INCOME TAXES | 5,260 | 3,728 | 1,050 | 4,497 | 5,923 | 10,038 | 15,796 | |||||||||||||||||||||
NET INCOME | 13,071 | 9,139 | 2,966 | 15,852 | 15,342 | 25,176 | 41,150 | |||||||||||||||||||||
Dividends on preferred shares | 196 | 195 | 196 | 196 | 196 | 587 | 587 | |||||||||||||||||||||
INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ | 12,875 | $ | 8,944 | $ | 2,770 | $ | 15,656 | $ | 15,146 | $ | 24,589 | $ | 40,563 | ||||||||||||||
EARNINGS PER COMMON SHARE | ||||||||||||||||||||||||||||
Basic | $ | 0.34 | $ | 0.24 | $ | 0.07 | $ | 0.41 | $ | 0.40 | $ | 0.65 | $ | 1.09 | ||||||||||||||
Diluted | $ | 0.34 | $ | 0.24 | $ | 0.07 | $ | 0.41 | $ | 0.39 | $ | 0.64 | $ | 1.07 | ||||||||||||||
BYLINE BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||
SELECTED FINANCIAL DATA (unaudited) | ||||||||||||||||||||||||||||
As of or For the Three Months Ended | As of or For the Nine Months Ended | |||||||||||||||||||||||||||
(dollars in thousands, except share and per share data) | September 30,
| June 30,
| March 31,
| December 31,
| September 30,
| September 30,
| September 30,
| |||||||||||||||||||||
Common Share Data | ||||||||||||||||||||||||||||
Basic earnings per common share | $ | 0.34 | $ | 0.24 | $ | 0.07 | $ | 0.41 | $ | 0.40 | $ | 0.65 | $ | 1.09 | ||||||||||||||
Diluted earnings per common share | $ | 0.34 | $ | 0.24 | $ | 0.07 | $ | 0.41 | $ | 0.39 | $ | 0.64 | $ | 1.07 | ||||||||||||||
Adjusted diluted earnings per common share(2)(3)(4) | $ | 0.34 | $ | 0.24 | $ | 0.09 | $ | 0.42 | $ | 0.41 | $ | 0.65 | $ | 1.20 | ||||||||||||||
Weighted average common shares outstanding (basic) | 38,057,350 | 37,919,480 | 37,943,333 | 37,872,835 | 37,831,356 | 37,973,694 | 37,094,083 | |||||||||||||||||||||
Weighted average common shares outstanding (diluted) | 38,249,335 | 38,027,289 | 38,663,658 | 38,537,899 | 38,487,180 | 38,251,963 | 37,818,868 | |||||||||||||||||||||
Common shares outstanding | 38,568,916 | 38,383,217 | 38,383,021 | 38,256,500 | 38,169,126 | 38,568,916 | 38,169,126 | |||||||||||||||||||||
Cash dividends per common share | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 | N/A | $ | 0.09 | N/A | ||||||||||||||||
Dividend payout ratio on common stock | 8.82 | % | 12.50 | % | 42.86 | % | 7.32 | % | N/A | 14.06 | % | N/A | ||||||||||||||||
Tangible book value per common share(1) | $ | 15.81 | $ | 15.47 | $ | 14.95 | $ | 14.62 | $ | 14.30 | $ | 15.81 | $ | 14.30 | ||||||||||||||
Key Ratios and Performance Metrics (annualized where applicable) | ||||||||||||||||||||||||||||
Net interest margin | 3.60 | % | 3.71 | % | 4.17 | % | 4.32 | % | 4.62 | % | 3.81 | % | 4.52 | % | ||||||||||||||
Average cost of deposits | 0.22 | % | 0.36 | % | 0.75 | % | 0.88 | % | 0.94 | % | 0.43 | % | 0.91 | % | ||||||||||||||
Efficiency ratio(2) | 52.47 | % | 53.70 | % | 67.16 | % | 60.93 | % | 59.81 | % | 57.35 | % | 61.15 | % | ||||||||||||||
Adjusted efficiency ratio(1)(2)(3) | 52.43 | % | 53.70 | % | 66.00 | % | 60.51 | % | 58.17 | % | 56.98 | % | 57.87 | % | ||||||||||||||
Non-interest expense to average assets | 2.59 | % | 2.41 | % | 3.15 | % | 3.19 | % | 3.32 | % | 2.70 | % | 3.33 | % | ||||||||||||||
Adjusted non-interest expense to average assets(1)(3) | 2.59 | % | 2.41 | % | 3.09 | % | 3.17 | % | 3.23 | % | 2.68 | % | 3.16 | % | ||||||||||||||
Return on average stockholders' equity | 6.57 | % | 4.74 | % | 1.56 | % | 8.43 | % | 8.34 | % | 4.33 | % | 7.91 | % | ||||||||||||||
Adjusted return on average stockholders' equity(1)(3)(4) | 6.58 | % | 4.74 | % | 1.83 | % | 8.54 | % | 8.78 | % | 4.42 | % | 8.86 | % | ||||||||||||||
Return on average assets | 0.81 | % | 0.59 | % | 0.21 | % | 1.16 | % | 1.12 | % | 0.56 | % | 1.05 | % | ||||||||||||||
Adjusted return on average assets(1)(3)(4) | 0.81 | % | 0.59 | % | 0.25 | % | 1.17 | % | 1.18 | % | 0.57 | % | 1.18 | % | ||||||||||||||
Non-interest income to total revenues(1) | 29.37 | % | 19.56 | % | 14.79 | % | 21.21 | % | 20.38 | % | 21.76 | % | 20.15 | % | ||||||||||||||
Pre-tax pre-provision return on average assets(1) | 2.12 | % | 1.85 | % | 1.33 | % | 1.81 | % | 1.98 | % | 1.79 | % | 1.87 | % | ||||||||||||||
Adjusted pre-tax pre-provision return on average assets(1)(3) | 2.12 | % | 1.85 | % | 1.39 | % | 1.83 | % | 2.07 | % | 1.80 | % | 2.04 | % | ||||||||||||||
Return on average tangible common stockholders' equity(1) | 9.39 | % | 7.05 | % | 2.89 | % | 12.20 | % | 12.22 | % | 6.51 | % | 11.66 | % | ||||||||||||||
Adjusted return on average tangible common stockholders' equity(1)(3) | 9.40 | % | 7.05 | % | 3.25 | % | 12.35 | % | 12.82 | % | 6.63 | % | 12.94 | % | ||||||||||||||
Non-interest-bearing deposits to total deposits | 35.73 | % | 35.67 | % | 30.45 | % | 30.85 | % | 29.93 | % | 35.73 | % | 29.93 | % | ||||||||||||||
Loans and leases held for sale and loans and lease held for investment to total deposits | 91.96 | % | 88.62 | % | 91.38 | % | 91.56 | % | 94.07 | % | 91.96 | % | 94.07 | % | ||||||||||||||
Deposits to total liabilities | 84.36 | % | 88.34 | % | 85.25 | % | 86.92 | % | 86.77 | % | 84.36 | % | 86.77 | % | ||||||||||||||
Deposits per branch | $ | 84,389 | $ | 86,989 | $ | 74,366 | $ | 67,993 | $ | 66,890 | $ | 84,389 | $ | 66,890 | ||||||||||||||
Asset Quality Ratios | ||||||||||||||||||||||||||||
Non-performing loans and leases to total loans and leases held for investment, net before ALLL | 0.99 | % | 0.92 | % | 1.27 | % | 0.96 | % | 1.03 | % | 0.99 | % | 1.03 | % | ||||||||||||||
ALLL to total loans and leases held for investment, net before ALLL | 1.40 | % | 1.17 | % | 1.08 | % | 0.84 | % | 0.82 | % | 1.40 | % | 0.82 | % | ||||||||||||||
Net charge-offs to average total loans and leases held for investment, net before ALLL | 0.53 | % | 0.57 | % | 0.48 | % | 0.42 | % | 0.56 | % | 0.53 | % | 0.36 | % | ||||||||||||||
Acquisition accounting adjustments(4) | $ | 17,133 | $ | 19,324 | $ | 25,889 | $ | 28,511 | $ | 31,053 | $ | 17,133 | $ | 31,053 | ||||||||||||||
Capital Ratios | ||||||||||||||||||||||||||||
Common equity to total assets | 12.08 | % | 12.05 | % | 13.12 | % | 13.40 | % | 13.34 | % | 12.08 | % | 13.34 | % | ||||||||||||||
Tangible common equity to tangible assets(1) | 9.65 | % | 9.55 | % | 10.33 | % | 10.47 | % | 10.38 | % | 9.65 | % | 10.38 | % | ||||||||||||||
Leverage ratio | 10.93 | % | 10.29 | % | 11.18 | % | 11.39 | % | 11.14 | % | 10.93 | % | 11.14 | % | ||||||||||||||
Common equity tier 1 capital ratio | 12.55 | % | 12.33 | % | 12.24 | % | 12.36 | % | 12.12 | % | 12.55 | % | 12.12 | % | ||||||||||||||
Tier 1 capital ratio | 13.77 | % | 13.56 | % | 13.52 | % | 13.67 | % | 13.43 | % | 13.77 | % | 13.43 | % | ||||||||||||||
Total capital ratio | 16.67 | % | 15.86 | % | 14.50 | % | 14.43 | % | 14.19 | % | 16.67 | % | 14.19 | % | ||||||||||||||
(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. |
(2) | Represents non-interest expense less amortization of intangible assets divided by net interest income and non-interest income. |
(3) | Calculation excludes impairment charges, merger-related expenses, and core systems conversion expense. |
(4) | Represents the remaining net unaccreted discount as a result of applying the fair value adjustment at the time of the business combination on acquired loans. |
BYLINE BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||
QUARTER-TO-DATE STATEMENT OF AVERAGE INTEREST-EARNING ASSETS AND AVERAGE INTEREST-BEARING LIABILITIES (unaudited) | ||||||||||||||||||||||||
For the Three Months Ended September 30, | ||||||||||||||||||||||||
2020 | 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 | $ | 48,678 | $ | 25 | 0.20 | % | $ | 34,225 | $ | 253 | 2.93 | % | ||||||||||||
Loans and leases(1) | 4,360,203 | 51,036 | 4.66 | % | 3,860,770 | 63,391 | 6.51 | % | ||||||||||||||||
Taxable securities | 1,364,516 | 6,341 | 1.85 | % | 996,750 | 6,899 | 2.75 | % | ||||||||||||||||
Tax-exempt securities(2) | 143,157 | 832 | 2.31 | % | 76,161 | 486 | 2.53 | % | ||||||||||||||||
Total interest-earning assets | $ | 5,916,554 | $ | 58,234 | 3.92 | % | $ | 4,967,906 | $ | 71,029 | 5.67 | % | ||||||||||||
Allowance for loan and lease losses | (53,964 | ) | (32,246 | ) | ||||||||||||||||||||
All other assets | 538,700 | 500,102 | ||||||||||||||||||||||
TOTAL ASSETS | $ | 6,401,290 | $ | 5,435,762 | ||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||
Interest checking | $ | 565,917 | $ | 226 | 0.16 | % | $ | 358,185 | $ | 524 | 0.58 | % | ||||||||||||
Money market accounts | 1,202,016 | 634 | 0.21 | % | 735,724 | 1,917 | 1.03 | % | ||||||||||||||||
Savings | 535,396 | 64 | 0.05 | % | 475,417 | 114 | 0.10 | % | ||||||||||||||||
Time deposits | 870,227 | 1,836 | 0.84 | % | 1,270,050 | 7,063 | 2.21 | % | ||||||||||||||||
Total interest-bearing deposits | 3,173,556 | 2,760 | 0.35 | % | 2,839,376 | 9,618 | 1.34 | % | ||||||||||||||||
Other borrowings | 538,237 | 465 | 0.34 | % | 563,026 | 2,834 | 2.00 | % | ||||||||||||||||
Subordinated notes and debentures | 100,756 | 1,485 | 5.86 | % | 37,109 | 739 | 7.89 | % | ||||||||||||||||
Total borrowings | 638,993 | 1,950 | 1.21 | % | 600,135 | 3,573 | 2.36 | % | ||||||||||||||||
Total interest-bearing liabilities | $ | 3,812,549 | $ | 4,710 | 0.49 | % | $ | 3,439,511 | $ | 13,191 | 1.52 | % | ||||||||||||
Non-interest-bearing demand deposits | 1,742,787 | 1,223,556 | ||||||||||||||||||||||
Other liabilities | 54,843 | 42,914 | ||||||||||||||||||||||
Total stockholders’ equity | 791,111 | 729,781 | ||||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 6,401,290 | $ | 5,435,762 | ||||||||||||||||||||
Net interest spread(3) | 3.43 | % | 4.15 | % | ||||||||||||||||||||
Net interest income | $ | 53,524 | $ | 57,838 | ||||||||||||||||||||
Net interest margin(4) | 3.60 | % | 4.62 | % | ||||||||||||||||||||
Net loan accretion impact on margin | $ | 3,911 | 0.26 | % | $ | 7,703 | 0.62 | % | ||||||||||||||||
(1) | Loan and lease balances are net of deferred origination fees and costs and initial indirect costs. Non-accrual loans and leases are included in total loan and lease balances. |
(2) | Interest income and rates exclude the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis due to immateriality. |
(3) | Represents the average rate earned on interest-earning assets minus the average rate paid on interest-bearing liabilities. |
(4) | Represents net interest income (annualized) divided by total average earning assets. |
(5) | Average balances are average daily balances. |
BYLINE BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||
YEAR-TO-DATE STATEMENT OF AVERAGE INTEREST-EARNING ASSETS AND AVERAGE INTEREST-BEARING LIABILITIES (unaudited) | ||||||||||||||||||||||||
For the Nine Months Ended September 30, | ||||||||||||||||||||||||
2020 | 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 | $ | 48,861 | $ | 207 | 0.57 | % | $ | 45,327 | $ | 798 | 2.35 | % | ||||||||||||
Loans and leases(1) | 4,148,465 | 155,347 | 5.00 | % | 3,719,323 | 177,298 | 6.37 | % | ||||||||||||||||
Taxable securities | 1,261,458 | 21,678 | 2.30 | % | 966,449 | 19,546 | 2.70 | % | ||||||||||||||||
Tax-exempt securities(2) | 115,161 | 2,073 | 2.40 | % | 66,635 | 1,257 | 2.52 | % | ||||||||||||||||
Total interest-earning assets | $ | 5,573,945 | $ | 179,305 | 4.30 | % | $ | 4,797,734 | $ | 198,899 | 5.54 | % | ||||||||||||
Allowance for loan and lease losses | (43,584 | ) | (28,626 | ) | ||||||||||||||||||||
All other assets | 522,321 | 457,383 | ||||||||||||||||||||||
TOTAL ASSETS | $ | 6,052,682 | $ | 5,226,491 | ||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||
Interest checking | $ | 432,785 | $ | 651 | 0.20 | % | $ | 328,558 | $ | 1,390 | 0.57 | % | ||||||||||||
Money market accounts | 1,126,588 | 3,794 | 0.45 | % | 682,020 | 5,166 | 1.01 | % | ||||||||||||||||
Savings | 509,001 | 186 | 0.05 | % | 474,815 | 371 | 0.10 | % | ||||||||||||||||
Time deposits | 986,419 | 10,179 | 1.38 | % | 1,248,258 | 20,073 | 2.15 | % | ||||||||||||||||
Total interest-bearing deposits | 3,054,793 | 14,810 | 0.65 | % | 2,733,651 | 27,000 | 1.32 | % | ||||||||||||||||
Other borrowings | 531,395 | 2,838 | 0.71 | % | 498,229 | 7,266 | 1.95 | % | ||||||||||||||||
Subordinated notes and debentures | 59,591 | 2,699 | 6.05 | % | 36,964 | 2,262 | 8.18 | % | ||||||||||||||||
Total borrowings | 590,986 | 5,537 | 1.25 | % | 535,193 | 9,528 | 2.38 | % | ||||||||||||||||
Total interest-bearing liabilities | $ | 3,645,779 | $ | 20,347 | 0.75 | % | $ | 3,268,844 | $ | 36,528 | 1.49 | % | ||||||||||||
Non-interest-bearing demand deposits | 1,578,704 | 1,221,375 | ||||||||||||||||||||||
Other liabilities | 50,677 | 40,705 | ||||||||||||||||||||||
Total stockholders’ equity | 777,522 | 695,547 | ||||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 6,052,682 | $ | 5,226,471 | ||||||||||||||||||||
Net interest spread(3) | 3.55 | % | 4.05 | % | ||||||||||||||||||||
Net interest income | $ | 158,958 | $ | 162,371 | ||||||||||||||||||||
Net interest margin(4) | 3.81 | % | 4.52 | % | ||||||||||||||||||||
Net loan accretion impact on margin | $ | 10,754 | 0.26 | % | $ | 17,772 | 0.50 | % | ||||||||||||||||
(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. AND SUBSIDIARIES | ||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited) | ||||||||||||||||||||||||||||
As of or For the Three Months Ended | As of or For the Nine Months Ended | |||||||||||||||||||||||||||
(dollars in thousands, except per share data) | September 30,
| June 30,
| March 31,
| December 31,
| September 30,
| September 30,
| September 30,
| |||||||||||||||||||||
Net income and earnings per share excluding significant items | ||||||||||||||||||||||||||||
Reported Net Income | $ | 13,071 | $ | 9,139 | $ | 2,966 | $ | 15,852 | $ | 15,342 | $ | 25,176 | $ | 41,150 | ||||||||||||||
Significant items: | ||||||||||||||||||||||||||||
Impairment charges on assets held for sale | 32 | — | 715 | 111 | 67 | 747 | 459 | |||||||||||||||||||||
Merger-related expense | — | — | — | 127 | 1,043 | — | 4,213 | |||||||||||||||||||||
Core system conversion expense | — | — | — | 48 | 77 | — | 2,001 | |||||||||||||||||||||
Tax benefit on impairment charges and merger-related expenses | (9 | ) | — | (199 | ) | (79 | ) | (369 | ) | (208 | ) | (1,751 | ) | |||||||||||||||
Adjusted Net Income | $ | 13,094 | $ | 9,139 | $ | 3,482 | $ | 16,059 | $ | 16,160 | $ | 25,715 | $ | 46,072 | ||||||||||||||
Reported Diluted Earnings per Share | $ | 0.34 | $ | 0.24 | $ | 0.07 | $ | 0.41 | $ | 0.39 | $ | 0.64 | $ | 1.07 | ||||||||||||||
Significant items: | ||||||||||||||||||||||||||||
Impairment charges on assets held for sale | — | — | 0.02 | — | — | 0.02 | 0.01 | |||||||||||||||||||||
Merger-related expense | — | — | — | 0.01 | 0.03 | — | 0.11 | |||||||||||||||||||||
Core system conversion expense | — | — | — | — | — | — | 0.05 | |||||||||||||||||||||
Tax benefit on impairment charges and merger-related expenses | — | — | — | — | (0.01 | ) | (0.01 | ) | (0.04 | ) | ||||||||||||||||||
Adjusted Diluted Earnings per Share | $ | 0.34 | $ | 0.24 | $ | 0.09 | $ | 0.42 | $ | 0.41 | $ | 0.65 | $ | 1.20 | ||||||||||||||
BYLINE BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited) | ||||||||||||||||||||||||||||
As of or For the Three Months Ended | As of or For the Nine Months Ended | |||||||||||||||||||||||||||
(dollars in thousands, except per share data, ratios annualized, where applicable) | September 30,
| June 30,
| March 31,
| December 31,
| September 30,
| September 30,
| September 30,
| |||||||||||||||||||||
Adjusted non-interest expense: | ||||||||||||||||||||||||||||
Non-interest expense | $ | 41,705 | $ | 37,012 | $ | 43,527 | $ | 43,694 | $ | 45,448 | $ | 122,244 | $ | 130,081 | ||||||||||||||
Less: Significant items | ||||||||||||||||||||||||||||
Impairment charges on assets held for sale | 32 | — | 715 | 111 | 67 | 747 | 459 | |||||||||||||||||||||
Merger-related expense | — | — | — | 127 | 1,043 | — | 4,213 | |||||||||||||||||||||
Core system conversion expense | — | — | — | 48 | 77 | — | 2,001 | |||||||||||||||||||||
Adjusted non-interest expense | $ | 41,673 | $ | 37,012 | $ | 42,812 | $ | 43,408 | $ | 44,261 | $ | 121,497 | $ | 123,408 | ||||||||||||||
Adjusted non-interest expense excluding amortization of intangible assets: | ||||||||||||||||||||||||||||
Adjusted non-interest expense | $ | 41,673 | $ | 37,012 | $ | 42,812 | $ | 43,408 | $ | 44,261 | $ | 121,497 | $ | 123,408 | ||||||||||||||
Less: Amortization of intangible assets | 1,947 | 1,892 | 1,893 | 2,002 | 2,003 | 5,732 | 5,735 | |||||||||||||||||||||
Adjusted non-interest expense excluding amortization of intangible assets | $ | 39,726 | $ | 35,120 | $ | 40,919 | $ | 41,406 | $ | 42,258 | $ | 115,765 | $ | 117,673 | ||||||||||||||
Pre-tax pre-provision net income: | ||||||||||||||||||||||||||||
Pre-tax income | $ | 18,331 | $ | 12,867 | $ | 4,016 | $ | 20,349 | $ | 21,265 | $ | 35,214 | $ | 56,946 | ||||||||||||||
Add: Provision for loan and lease losses | 15,740 | 15,518 | 14,455 | 4,387 | 5,931 | 45,713 | 16,321 | |||||||||||||||||||||
Pre-tax pre-provision net income | $ | 34,071 | $ | 28,385 | $ | 18,471 | $ | 24,736 | $ | 27,196 | $ | 80,927 | $ | 73,267 | ||||||||||||||
Adjusted pre-tax pre-provision net income: | ||||||||||||||||||||||||||||
Pre-tax pre-provision net income | $ | 34,071 | $ | 28,385 | $ | 18,471 | $ | 24,736 | $ | 27,196 | $ | 80,927 | $ | 73,267 | ||||||||||||||
Impairment charges on assets held for sale | 32 | — | 715 | 111 | 67 | 747 | 459 | |||||||||||||||||||||
Merger-related expense | — | — | — | 127 | 1,043 | — | 4,213 | |||||||||||||||||||||
Core system conversion expense | — | — | — | 48 | 77 | — | 2,001 | |||||||||||||||||||||
Adjusted pre-tax pre-provision net income | $ | 34,103 | $ | 28,385 | $ | 19,186 | $ | 25,022 | $ | 28,383 | $ | 81,674 | $ | 79,940 | ||||||||||||||
Total revenues: | ||||||||||||||||||||||||||||
Net interest income | $ | 53,524 | $ | 52,609 | $ | 52,825 | $ | 53,914 | $ | 57,838 | $ | 158,958 | $ | 162,371 | ||||||||||||||
Add: Non-interest income | 22,252 | 12,788 | 9,173 | 14,516 | 14,806 | 44,213 | 40,977 | |||||||||||||||||||||
Total revenues | $ | 75,776 | $ | 65,397 | $ | 61,998 | $ | 68,430 | $ | 72,644 | $ | 203,171 | $ | 203,348 | ||||||||||||||
Tangible common stockholders' equity: | ||||||||||||||||||||||||||||
Total stockholders' equity | $ | 794,696 | $ | 780,935 | $ | 762,667 | $ | 750,115 | $ | 735,866 | $ | 794,696 | $ | 735,866 | ||||||||||||||
Less: Preferred stock | 10,438 | 10,438 | 10,438 | 10,438 | 10,438 | 10,438 | 10,438 | |||||||||||||||||||||
Less: Goodwill and other intangibles | 174,523 | 176,470 | 178,362 | 180,255 | 179,543 | 174,523 | 179,543 | |||||||||||||||||||||
Tangible common stockholders' equity | $ | 609,735 | $ | 594,027 | $ | 573,867 | $ | 559,422 | $ | 545,885 | $ | 609,735 | $ | 545,885 | ||||||||||||||
Tangible assets: | ||||||||||||||||||||||||||||
Total assets | $ | 6,496,513 | $ | 6,393,518 | $ | 5,734,754 | $ | 5,521,809 | $ | 5,438,278 | $ | 6,496,513 | $ | 5,438,278 | ||||||||||||||
Less: Goodwill and other intangibles | 174,523 | 176,470 | 178,362 | 180,255 | 179,543 | 174,523 | 179,543 | |||||||||||||||||||||
Tangible assets | $ | 6,321,990 | $ | 6,217,048 | $ | 5,556,392 | $ | 5,341,554 | $ | 5,258,735 | $ | 6,321,990 | $ | 5,258,735 | ||||||||||||||
Average tangible common stockholders' equity: | ||||||||||||||||||||||||||||
Average total stockholders' equity | $ | 791,111 | $ | 765,427 | $ | 745,745 | $ | 729,781 | $ | 696,928 | $ | 777,522 | $ | 695,547 | ||||||||||||||
Less: Average preferred stock | 10,438 | 10,438 | 10,438 | 10,438 | 10,438 | 10,438 | 10,438 | |||||||||||||||||||||
Less: Average goodwill and other intangibles | 175,444 | 179,416 | 179,192 | 180,740 | 175,236 | 177,426 | 172,373 | |||||||||||||||||||||
Average tangible common stockholders' equity | $ | 605,229 | $ | 575,573 | $ | 556,115 | $ | 538,603 | $ | 511,254 | $ | 589,658 | $ | 512,736 | ||||||||||||||
Average tangible assets: | ||||||||||||||||||||||||||||
Average total assets | $ | 6,401,290 | $ | 6,186,974 | $ | 5,565,952 | $ | 5,427,046 | $ | 5,435,762 | $ | 6,052,682 | $ | 5,226,491 | ||||||||||||||
Less: Average goodwill and other intangibles | 175,444 | 179,416 | 179,192 | 180,740 | 175,236 | 177,426 | 172,373 | |||||||||||||||||||||
Average tangible assets | $ | 6,225,846 | $ | 6,007,558 | $ | 5,386,760 | $ | 5,246,306 | $ | 5,260,526 | $ | 5,875,256 | $ | 5,054,118 | ||||||||||||||
Tangible net income available to common stockholders: | ||||||||||||||||||||||||||||
Net income available to common stockholders | $ | 12,875 | $ | 8,944 | $ | 2,770 | $ | 15,656 | $ | 15,146 | $ | 24,589 | $ | 40,563 | ||||||||||||||
Add: After-tax intangible asset amortization | 1,405 | 1,365 | 1,366 | 1,445 | 1,445 | 4,136 | 4,138 | |||||||||||||||||||||
Tangible net income available to common stockholders | $ | 14,280 | $ | 10,309 | $ | 4,136 | $ | 17,101 | $ | 16,591 | $ | 28,725 | $ | 44,701 | ||||||||||||||
Adjusted tangible net income available to common stockholders: | ||||||||||||||||||||||||||||
Tangible net income available to common stockholders | $ | 14,280 | $ | 10,309 | $ | 4,136 | $ | 17,101 | $ | 16,591 | $ | 28,725 | $ | 44,701 | ||||||||||||||
Impairment charges on assets held for sale | 32 | — | 715 | 111 | 67 | 747 | 459 | |||||||||||||||||||||
Merger-related expense | — | — | — | 127 | 1,043 | — | 4,213 | |||||||||||||||||||||
Core system conversion expense | — | — | — | 48 | 77 | — | 2,001 | |||||||||||||||||||||
Tax benefit on significant items | (9 | ) | — | (199 | ) | (79 | ) | (369 | ) | (208 | ) | (1,751 | ) | |||||||||||||||
Adjusted tangible net income available to common stockholders | $ | 14,303 | $ | 10,309 | $ | 4,652 | $ | 17,308 | $ | 17,409 | $ | 29,264 | $ | 49,623 | ||||||||||||||
BYLINE BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited) | ||||||||||||||||||||||||||||
As of or For the Three Months Ended | As of or For the Nine Months Ended | |||||||||||||||||||||||||||
(dollars in thousands, except share and per share data, ratios annualized, where applicable) | September 30,
| June 30,
| March 31,
| December 31,
| September 30,
| September 30,
| September 30,
| |||||||||||||||||||||
Pre-tax pre-provision return on average assets: | ||||||||||||||||||||||||||||
Pre-tax pre-provision net income | $ | 34,071 | $ | 28,385 | $ | 18,471 | $ | 24,736 | $ | 27,196 | $ | 80,927 | $ | 73,267 | ||||||||||||||
Average total assets | 6,401,290 | 6,186,974 | 5,565,952 | 5,427,046 | 5,435,762 | 6,052,682 | 5,226,491 | |||||||||||||||||||||
Pre-tax pre-provision return on average assets | 2.12 | % | 1.85 | % | 1.33 | % | 1.81 | % | 1.98 | % | 1.87 | % | ||||||||||||||||
Adjusted pre-tax pre-provision return on average assets: | ||||||||||||||||||||||||||||
Adjusted pre-tax pre-provision net income | $ | 34,103 | $ | 28,385 | $ | 19,186 | $ | 25,022 | $ | 28,383 | $ | 81,674 | $ | 79,940 | ||||||||||||||
Average total assets | 6,401,290 | 6,186,974 | 5,565,952 | 5,427,046 | 5,435,762 | 6,052,682 | 5,226,491 | |||||||||||||||||||||
Adjusted pre-tax pre-provision return on average assets | 2.12 | % | 1.85 | % | 1.39 | % | 1.83 | % | 2.07 | % | 1.80 | % | 2.04 | % | ||||||||||||||
Non-interest income to total revenues: | ||||||||||||||||||||||||||||
Non-interest income | $ | 22,252 | $ | 12,788 | $ | 9,173 | $ | 14,516 | $ | 14,806 | $ | 44,213 | $ | 40,977 | ||||||||||||||
Total revenues | 75,776 | 65,397 | 61,998 | 68,430 | 72,644 | 203,171 | 203,348 | |||||||||||||||||||||
Non-interest income to total revenues | 29.37 | % | 19.56 | % | 14.79 | % | 21.21 | % | 20.38 | % | 21.76 | % | 20.15 | % | ||||||||||||||
Adjusted non-interest expense to average assets: | ||||||||||||||||||||||||||||
Adjusted non-interest expense | $ | 41,673 | $ | 37,012 | $ | 42,812 | $ | 43,408 | $ | 44,261 | $ | 121,497 | $ | 123,408 | ||||||||||||||
Average total assets | 6,401,290 | 6,186,974 | 5,565,952 | 5,427,046 | 5,435,762 | 6,052,682 | 5,226,491 | |||||||||||||||||||||
Adjusted non-interest expense to average assets | 2.59 | % | 2.41 | % | 3.09 | % | 3.17 | % | 3.23 | % | 2.68 | % | 3.16 | % | ||||||||||||||
Adjusted efficiency ratio: | ||||||||||||||||||||||||||||
Adjusted non-interest expense excluding amortization of intangible assets | $ | 39,726 | $ | 35,120 | $ | 40,919 | $ | 41,406 | $ | 42,258 | $ | 115,765 | $ | 117,673 | ||||||||||||||
Total revenues | 75,776 | 65,397 | 61,998 | 68,430 | 72,644 | 203,171 | 203,348 | |||||||||||||||||||||
Adjusted efficiency ratio | 52.43 | % | 53.70 | % | 66.00 | % | 60.51 | % | 58.17 | % | 56.98 | % | 57.87 | % | ||||||||||||||
Adjusted return on average assets: | ||||||||||||||||||||||||||||
Adjusted net income | $ | 13,094 | $ | 9,139 | $ | 3,482 | $ | 16,059 | $ | 16,160 | $ | 25,715 | $ | 46,072 | ||||||||||||||
Average total assets | 6,401,290 | 6,186,974 | 5,565,952 | 5,427,046 | 5,435,762 | 6,052,682 | 5,226,491 | |||||||||||||||||||||
Adjusted return on average assets | 0.81 | % | 0.59 | % | 0.25 | % | 1.17 | % | 1.18 | % | 0.57 | % | 1.18 | % | ||||||||||||||
Adjusted return on average stockholders' equity: | ||||||||||||||||||||||||||||
Adjusted net income | $ | 13,094 | $ | 9,139 | $ | 3,482 | $ | 16,059 | $ | 16,160 | $ | 25,715 | $ | 46,072 | ||||||||||||||
Average stockholders' equity | 791,111 | 765,427 | 745,745 | 729,781 | 696,928 | 777,522 | 695,547 | |||||||||||||||||||||
Adjusted return on average stockholders' equity | 6.58 | % | 4.74 | % | 1.83 | % | 8.54 | % | 8.78 | % | 4.42 | % | 8.86 | % | ||||||||||||||
Tangible common equity to tangible assets: | ||||||||||||||||||||||||||||
Tangible common equity | $ | 609,735 | $ | 594,027 | $ | 573,867 | $ | 559,422 | $ | 545,885 | $ | 609,735 | $ | 545,885 | ||||||||||||||
Tangible assets | 6,321,990 | 6,217,048 | 5,556,392 | 5,341,554 | 5,258,735 | 6,321,990 | 5,258,735 | |||||||||||||||||||||
Tangible common equity to tangible assets | 9.65 | % | 9.55 | % | 10.33 | % | 10.47 | % | 10.38 | % | 9.65 | % | 10.38 | % | ||||||||||||||
Return on average tangible common stockholders' equity: | ||||||||||||||||||||||||||||
Tangible net income available to common stockholders | $ | 14,280 | $ | 10,309 | $ | 4,136 | $ | 17,101 | $ | 16,591 | $ | 28,725 | $ | 44,701 | ||||||||||||||
Average tangible common stockholders' equity | 605,229 | 575,573 | 556,115 | 538,603 | 511,254 | 589,658 | 512,736 | |||||||||||||||||||||
Return on average tangible common stockholders' equity | 9.39 | % | 7.05 | % | 2.89 | % | 12.20 | % | 12.22 | % | 6.51 | % | 11.66 | % | ||||||||||||||
Adjusted return on average tangible common stockholders' equity: | ||||||||||||||||||||||||||||
Adjusted tangible net income available to common stockholders | $ | 14,303 | $ | 10,309 | $ | 4,652 | $ | 17,308 | $ | 17,409 | $ | 29,264 | $ | 49,623 | ||||||||||||||
Average tangible common stockholders' equity | 605,229 | 575,573 | 556,115 | 538,603 | 511,254 | 589,658 | 512,736 | |||||||||||||||||||||
Adjusted return on average tangible common stockholders' equity | 9.40 | % | 7.05 | % | 3.25 | % | 12.35 | % | 12.82 | % | 6.63 | % | 12.94 | % | ||||||||||||||
Tangible book value per share: | ||||||||||||||||||||||||||||
Tangible common equity | $ | 609,735 | $ | 594,027 | $ | 573,867 | $ | 559,422 | $ | 545,885 | $ | 609,735 | $ | 545,885 | ||||||||||||||
Common shares outstanding | 38,568,916 | 38,383,217 | 38,383,021 | 38,256,500 | 38,169,126 | 38,568,916 | 38,169,126 | |||||||||||||||||||||
Tangible book value per share | $ | 15.81 | $ | 15.47 | $ | 14.95 | $ | 14.62 | $ | 14.30 | $ | 15.81 | $ | 14.30 | ||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20201022006167/en/
Contacts:
Tony Rossi
Financial Profiles, Inc.
310-622-8221
BYIR@bylinebank.com
