Business Wire | Oct 22, 2020 04:27PM EDT

Byline Bancorp, Inc. Reports Third Quarter 2020 Financial Results

Oct. 22, 2020

CHICAGO--(BUSINESS WIRE)--Oct. 22, 2020--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 $0 - $50,001 $150,001 - Overthousands) $50,000 - $2,000,000 Total $150,000 $2,000,000

Principal $ 37,993 $ 84,385 $ 428,361 $ 84,639 $ 635,378 outstanding

Unearnedprocessing (1,479 ) (3,254 ) (12,157 ) (653 ) (17,543 )fee

Deferred 2,138 1,089 1,098 31 4,356 cost

PPP loans, $ 38,652 $ 82,220 $ 417,302 $ 84,017 $ 622,191 net

Number of 1,831 951 958 27 3,767 loans

STATEMENTS OF OPERATIONS

Net Interest Income

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

Three Months Ended Nine Months Ended

September June 30, March December September September September (dollars in 30, 31, 31, 30, 30, 30,thousands) 2020 2020 2020 2019 2019 2020 2019

INTEREST AND DIVIDEND INCOME

Interest and feeson loans and $ 51,036 $ 50,153 $ 54,158 $ 58,203 $ 63,391 $ 155,347 $ 177,298

leases

Interest on 7,070 7,530 8,016 7,212 7,040 22,616 19,807 securities

Other interest anddividend 128 222 992 500 598 1,342 1,794

income

Total interest anddividend 58,234 57,905 63,166 65,915 71,029 179,305 198,899

income

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 notesand 1,485 574 640 687 738 2,699 2,262

debentures

Total interest 4,710 5,296 10,341 12,001 13,191 20,347 36,528 expense

Net interest $ 53,524 $ 52,609 $ 52,825 $ 53,914 $ 57,838 $ 158,958 $ 162,371 income

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

Interest Average Interest Average Average Average(dollars in thousands) Inc / Yield / Inc / Yield / Balance^(5) Exp Balance^(5) Exp Rate 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 $ 5,916,554 $ 58,234 3.92 % $ 5,703,569 $ 57,905 4.08 %assets

Allowance for loan and (53,964 ) (43,009 ) lease losses

All other assets 538,700 526,414

TOTAL ASSETS $ 6,401,290 $ 6,186,974

LIABILITIES ANDSTOCKHOLDERS'

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 3,173,556 2,760 0.35 % 3,094,542 4,246 0.55 %deposits

Other borrowings 538,237 465 0.34 % 534,766 476 0.36 %

Subordinated notes and 100,756 1,485 5.86 % 40,180 574 5.75 %debentures

Total borrowings 638,993 1,950 1.21 % 574,946 1,050 0.73 %

Total interest-bearing $ 3,812,549 $ 4,710 0.49 % $ 3,669,488 $ 5,296 0.58 %liabilities

Non-interest-bearing 1,742,787 1,692,723 demand deposits

Other liabilities 54,843 48,884

Total stockholders' equity 791,111 775,879

TOTAL LIABILITIES AND $ 6,401,290 $ 6,186,974 STOCKHOLDERS' EQUITY

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 $ 3,911 0.26 % $ 3,172 0.22 on margin

(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:

Loan and lease balances are net of deferred origination fees and costs and(1) initial indirect costs. Non-accrual loans and leases are included in total loan and lease balances.

Interest income and rates exclude the effects of a tax equivalent(2) 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

September June 30, March December September September September (dollars in 30, 31, 31, 30, 30, 30,thousands) 2020 2020 2020 2019 2019 2020 2019

NON-INTEREST INCOME

Fees and servicecharges on $ 1,603 $ 1,455 $ 1,673 $ 1,635 $ 1,612 $ 4,731 $ 4,823

deposits

Loan servicing 2,936 2,980 2,758 2,834 2,692 8,674 7,861 revenue

Loan servicing 1,122 (711 ) (3,064 ) (2,545 ) (1,610 ) (2,653 ) (4,094 )asset revaluation

ATM and 1,028 845 1,216 1,150 973 3,089 2,635 interchange fees

Net gains on salesof securities 1,037 - 1,375 - 178 2,412 1,151

available-for-sale

Change in fairvalue of equity 154 766 (619 ) 381 (15 ) 301 1,035 securities, net

Net gains on sales 12,671 6,456 4,773 8,735 9,405 23,900 23,110 of loans

Wealth management 693 608 669 704 653 1,970 1,874 and trust income

Other non-interest 1,008 389 392 1,622 918 1,789 2,582 income

Total non-interest $ 22,252 $ 12,788 $ 9,173 $ 14,516 $ 14,806 $ 44,213 $ 40,977 income

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

September June 30, March December September September September (dollars in 30, 31, 31, 30, 30, 30,thousands) 2020 2020 2020 2019 2019 2020 2019

NON-INTEREST EXPENSE

Salaries andemployee $ 23,126 $ 19,405 $ 24,666 $ 24,228 $ 24,537 $ 67,197 $ 71,081 benefits

Occupancyand 5,220 5,359 5,524 5,241 4,512 16,103 14,530 equipmentexpense, net

Loan andlease 2,053 1,260 1,311 2,648 1,949 4,624 5,367 relatedexpenses

Legal, auditand other 2,390 2,078 2,334 2,340 4,066 6,802 9,113 professionalfees

Data 2,661 2,826 2,665 2,678 4,062 8,152 11,055 processing

Net lossrecognizedon otherreal estate 349 456 519 122 95 1,324 543 owned andotherrelatedexpenses

Otherintangibleassets 1,947 1,892 1,893 2,002 2,003 5,732 5,735 amortizationexpense

Othernon-interest 3,959 3,736 4,615 4,435 4,224 12,310 12,657 expense

Totalnon-interest $ 41,705 $ 37,012 $ 43,527 $ 43,694 $ 45,448 $ 122,244 $ 130,081 expense

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 Amount % of Amount % of Amount % of thousands) Total Total Total

Originatedloans and leases

Commercial $ 919,862 21.0 % $ 919,510 20.9 % $ 772,559 20.2 %real estate

Residential 458,364 10.5 % 480,692 10.9 % 497,839 13.0 %real estate

Construction,landdevelopment, 234,017 5.3 % 219,261 5.0 % 236,780 6.2 %and otherland

Commercialand 1,214,099 27.8 % 1,200,996 27.4 % 1,096,400 28.6 %industrial

Paycheckprotection 622,191 14.2 % 611,664 13.9 % - 0.0 %program

Installment 2,346 0.1 % 2,714 0.1 % 7,818 0.2 %and other

Leasingfinancing 185,700 4.2 % 160,741 3.7 % 156,758 4.1 %receivables

Totaloriginated $ 3,636,579 83.1 % $ 3,595,578 81.9 % $ 2,768,154 72.3 %loans andleases

Acquiredimpaired loans

Commercial $ 117,114 2.7 % $ 126,405 2.9 % $ 142,435 3.7 %real estate

Residential 84,197 1.9 % 90,784 2.1 % 109,409 2.9 %real estate

Construction,landdevelopment, 4,804 0.1 % 4,784 0.1 % 4,562 0.1 %and otherland

Commercialand 10,489 0.3 % 13,485 0.3 % 18,349 0.5 %industrial

Installment 214 0.0 % 226 0.0 % 267 0.0 %and other

Totalacquired $ 216,818 5.0 % $ 235,684 5.4 % $ 275,022 7.2 %impairedloans

Acquirednon-impaired loans andleases

Commercial $ 310,879 7.1 % $ 305,041 6.9 % $ 391,294 10.2 %real estate

Residential 90,835 2.1 % 99,288 2.2 % 141,855 3.7 %real estate

Construction,landdevelopment, 213 0.0 % 21,958 0.5 % 39,657 1.0 %and

other land

Commercialand 104,221 2.4 % 116,668 2.7 % 187,413 4.9 %industrial

Installment 583 0.0 % 818 0.0 % 1,269 0.0 %and other

Leasingfinancing 14,389 0.3 % 16,087 0.4 % 26,426 0.7 %receivables

Totalacquirednon-impaired $ 521,120 11.9 % $ 559,860 12.7 % $ 787,914 20.5 %loans andleases

Total loans $ 4,374,517 100.0 % $ 4,391,122 100.0 % $ 3,831,090 100.0 %and leases

Allowance forloan and (61,258 ) (51,300 ) (31,585 ) lease losses

Total loansand leases, net of $ 4,313,259 $ 4,339,822 $ 3,799,505 allowance for loan andlease losses

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 June 30, March December September 30, 31, 31, 30,

(dollars in 2020 2020 2020 2019 2019 thousands)

Non-performing assets:

Non-accrualloans and $ 43,196 $ 40,505 $ 48,964 $ 36,272 $ 39,528 leases

Past due loansand leases 90days or more - - - - - and stillaccruinginterest

Totalnon-performing $ 43,196 $ 40,505 $ 48,964 $ 36,272 $ 39,528 loans andleases

Other real 8,150 8,652 9,273 9,896 6,502 estate owned

Totalnon-performing $ 51,346 $ 49,157 $ 58,237 $ 46,168 $ 46,030 assets

Totalnon-performingloans andleases as a 0.99 % 0.92 % 1.27 % 0.96 % 1.03 %percentage oftotal loansand leases

Totalnon-performingassets as a 0.79 % 0.77 % 1.02 % 0.84 % 0.85 %percentage oftotal assets

Allowance forloan and leaselosses as apercentage of 141.81 % 126.65 % 85.45 % 88.05 % 79.91 %non-performingloans and

leases

Accruingtroubled debt $ 2,293 $ 3,151 $ 1,725 $ 1,771 $ 2,204 restructuredloans ^(1)



Non-performingassetsguaranteed by U.S.government:

Non-accrualloans $ 3,749 $ 3,755 $ 4,957 $ 4,232 $ 4,167 guaranteed

Past due loans90 days ormore and still - - - - - accruinginterestguaranteed

Totalnon-performing $ 3,749 $ 3,755 $ 4,957 $ 4,232 $ 4,167 loansguaranteed

Totalnon-performingloans andleases not 0.90 % 0.84 % 1.14 % 0.85 % 0.92 %guaranteed asa percentageof total loansand leases

Totalnon-performingassets notguaranteed as 0.73 % 0.71 % 0.93 % 0.76 % 0.77 %a percentageof totalassets

Accruingtroubled debtrestructured $ - $ - $ - $ - $ - loansguaranteed ^(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:

(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

September June 30, March December September September September (dollars in 30, 31, 31, 30, 30, 30,thousands) 2020 2020 2020 2019 2019 2020 2019

Allowancefor loan andlease $ 51,300 $ 41,840 $ 31,936 $ 31,585 $ 31,132 $ 31,936 $ 25,201 losses,beginning ofperiod

Provisionfor loan and 15,740 15,518 14,455 4,387 5,931 45,713 16,321 lease losses

Netcharge-offs (5,782 ) (6,058 ) (4,551 ) (4,036 ) (5,478 ) (16,391 ) (9,937 )of loans andleases

Allowancefor loan andleaselosses, $ 61,258 $ 51,300 $ 41,840 $ 31,936 $ 31,585 $ 61,258 $ 31,585

end ofperiod



Allowancefor loan andlease losses

to periodend total 1.40 % 1.17 % 1.08 % 0.84 % 0.82 % 1.40 % 0.82 %loans and

leases heldforinvestment

Netcharge-offs(annualized)to

average 0.53 % 0.57 % 0.48 % 0.42 % 0.56 % 0.53 % 0.36 %loans andleases

outstandingduring theperiod

Provisionfor loan andlease lossesto 2.72x 2.56x 3.18x 1.09x 1.08x 2.79 x 1.64x netcharge-offsduring theperiod

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 June 30, March 31, December September 30, 31, 30,

(dollars in thousands) 2020 2020 2020 2019 2019

Non-interest-bearing $ 1,718,682 $ 1,768,675 $ 1,290,896 $ 1,279,641 $ 1,221,431 demand deposits

Interest-bearing checking 584,682 503,909 355,678 338,185 372,049 accounts

Money market demand 1,153,433 1,233,748 1,104,276 881,387 745,154 accounts

Other savings 542,741 525,043 486,131 475,839 471,878

Time deposits (below 622,328 710,429 800,759 916,723 966,866 $250,000)

Time deposits ($250,000 188,379 216,541 201,096 255,802 302,936 and above)

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:

Required to be Minimum Capital Actual Considered Required Well Capitalized

September Amount Ratio Amount Ratio Amount Ratio 30, 2020

Totalcapitalto risk weightedassets:

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 1capitalto risk weightedassets:

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 %

CommonEquityTier 1(CET1) to

riskweightedassets:

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 1capitalto averageassets:

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 June 30, March 31, December September 30, 31, 30,

(dollars in 2020 2020 2020 2019 2019 thousands)

ASSETS

Cash and due from $ 47,433 $ 51,818 $ 45,233 $ 48,228 $ 75,275 banks

Interest bearingdeposits with other 53,645 88,113 74,386 32,509 33,564 banks

Cash and cash 101,078 139,931 119,619 80,737 108,839 equivalents

Equity and othersecurities, at fair 8,335 8,181 7,413 8,031 7,648 value

Securitiesavailable-for-sale, 1,509,211 1,426,871 1,299,483 1,186,292 1,031,933 at fair value

Securitiesheld-to-maturity, at 4,400 4,404 4,408 4,412 4,417 amortized cost

Restricted stock, at 9,652 6,232 24,197 22,127 24,331 cost

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 (61,258 ) (51,300 ) (41,840 ) (31,936 ) (31,585 )and lease losses

Net loans and leases 4,313,259 4,339,822 3,818,419 3,753,725 3,799,505

Servicing assets, at 21,267 18,351 17,800 19,471 19,939 fair value

Premises and 94,638 95,546 96,446 96,140 96,006 equipment, net

Other real estate 8,150 8,652 9,273 9,896 6,502 owned, net

Goodwill and otherintangible assets, 174,523 176,470 178,362 180,255 179,543 net

Bank-owned life 9,952 9,896 9,898 9,750 9,699 insurance

Deferred tax assets, 35,945 37,082 33,845 38,315 33,388 net

Accrued interestreceivable and other 157,054 119,049 102,292 100,926 109,352 assets

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 $ 1,718,682 $ 1,768,675 $ 1,290,896 $ 1,279,641 $ 1,221,431 demand deposits

Interest-bearing 3,091,563 3,189,670 2,947,940 2,867,936 2,858,883 deposits

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, 73,299 48,777 - - - net

Junior subordinateddebentures issued to 36,331 36,206 37,462 37,334 37,207 capital trusts, net

Accrued expenses and 71,382 58,841 55,142 47,145 46,601 other liabilities

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 586,057 583,307 582,517 580,965 579,564 capital

Retained earnings 180,162 168,444 160,652 159,033 144,525

Treasury stock (1,668 ) (1,668 ) (1,668 ) - -

Accumulated othercomprehensive income 19,324 20,033 10,348 (700 ) 961 (loss), net of tax

Total stockholders' 794,696 780,935 762,667 750,115 735,866 equity

Total liabilitiesand stockholders' $ 6,496,513 $ 6,393,518 $ 5,734,754 $ 5,521,809 $ 5,438,278 equity

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

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)



Three Months Ended Nine Months Ended

(dollars in September June 30, March December September September September thousands, except 30, 31, 31, 30, 30, 30,per share data) 2020 2020 2020 2019 2019 2020 2019

INTEREST AND DIVIDEND INCOME

Interest and feeson loans and $ 51,036 $ 50,153 $ 54,158 $ 58,203 $ 63,391 $ 155,347 $ 177,298 leases

Interest on 7,070 7,530 8,016 7,212 7,040 22,616 19,807 securities

Other interest and 128 222 992 500 598 1,342 1,794 dividend income

Total interest and 58,234 57,905 63,166 65,915 71,029 179,305 198,899 dividend income

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 1,485 574 640 687 738 2,699 2,262 and debentures

Total interest 4,710 5,296 10,341 12,001 13,191 20,347 36,528 expense

Net interest 53,524 52,609 52,825 53,914 57,838 158,958 162,371 income

PROVISION FOR LOAN 15,740 15,518 14,455 4,387 5,931 45,713 16,321 AND LEASE LOSSES

Net interestincome afterprovision 37,784 37,091 38,370 49,527 51,907 113,245 146,050

for loan and leaselosses

NON-INTEREST INCOME

Fees and servicecharges on 1,603 1,455 1,673 1,635 1,612 4,731 4,823 deposits

Loan servicing 2,936 2,980 2,758 2,834 2,692 8,674 7,861 revenue

Loan servicing 1,122 (711 ) (3,064 ) (2,545 ) (1,610 ) (2,653 ) (4,094 )asset revaluation

ATM and 1,028 845 1,216 1,150 973 3,089 2,635 interchange fees

Net gains on salesof securities 1,037 - 1,375 - 178 2,412 1,151

available-for-sale

Change in fairvalue of equity 154 766 (619 ) 381 (15 ) 301 1,035 securities, net

Net gains on sales 12,671 6,456 4,773 8,735 9,405 23,900 23,110 of loans

Wealth management 693 608 669 704 653 1,970 1,874 and trust income

Other non-interest 1,008 389 392 1,622 918 1,789 2,582 income

Total non-interest 22,252 12,788 9,173 14,516 14,806 44,213 40,977 income

NON-INTEREST EXPENSE

Salaries and 23,126 19,405 24,666 24,228 24,537 67,197 71,081 employee benefits

Occupancy andequipment expense, 5,220 5,359 5,524 5,241 4,512 16,103 14,530 net

Loan and lease 2,053 1,260 1,311 2,648 1,949 4,624 5,367 related expenses

Legal, audit, andother professional 2,390 2,078 2,334 2,340 4,066 6,802 9,113 fees

Data processing 2,661 2,826 2,665 2,678 4,062 8,152 11,055

Net lossrecognized onother real 349 456 519 122 95 1,324 543 estate owned andother related

expenses

Other intangibleassets 1,947 1,892 1,893 2,002 2,003 5,732 5,735 amortizationexpense

Other non-interest 3,959 3,736 4,615 4,435 4,224 12,310 12,657 expense

Total non-interest 41,705 37,012 43,527 43,694 45,448 122,244 130,081 expense

INCOME BEFOREPROVISION FOR 18,331 12,867 4,016 20,349 21,265 35,214 56,946 INCOME TAXES

PROVISION FOR 5,260 3,728 1,050 4,497 5,923 10,038 15,796 INCOME TAXES

NET INCOME 13,071 9,139 2,966 15,852 15,342 25,176 41,150

Dividends on 196 195 196 196 196 587 587 preferred shares

INCOME AVAILABLETO COMMON $ 12,875 $ 8,944 $ 2,770 $ 15,656 $ 15,146 $ 24,589 $ 40,563 STOCKHOLDERS

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 andper share data)

September 30,2020

June 30,2020

March 31,2020

December 31,2019

September 30,2019

September 30,2020

September 30,2019

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

%

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 September June 30, March 31, December 31, September September Septembershare and per share 30, 2020 2020 2019 30, 30, 30,data) 2020 2019 2020 2019

Common Share Data

Basic earnings per $ 0.34 $ 0.24 $ 0.07 $ 0.41 $ 0.40 $ 0.65 $ 1.09 common share

Diluted earnings per $ 0.34 $ 0.24 $ 0.07 $ 0.41 $ 0.39 $ 0.64 $ 1.07 common share

Adjusted dilutedearnings per common $ 0.34 $ 0.24 $ 0.09 $ 0.42 $ 0.41 $ 0.65 $ 1.20 share^(2)(3)(4)

Weighted averagecommon shares 38,057,350 37,919,480 37,943,333 37,872,835 37,831,356 37,973,694 37,094,083

outstanding (basic)

Weighted averagecommon shares 38,249,335 38,027,289 38,663,658 38,537,899 38,487,180 38,251,963 37,818,868 outstanding(diluted)

Common shares 38,568,916 38,383,217 38,383,021 38,256,500 38,169,126 38,568,916 38,169,126 outstanding

Cash dividends per $ 0.03 $ 0.03 $ 0.03 $ 0.03 N/A $ 0.09 N/A common share

Dividend payoutratio on common 8.82 % 12.50 % 42.86 % 7.32 % N/A 14.06 % N/A stock

Tangible book value $ 15.81 $ 15.47 $ 14.95 $ 14.62 $ 14.30 $ 15.81 $ 14.30 per common share^(1)



Key Ratios andPerformance Metrics (annualized whereapplicable)

Net interest margin 3.60 % 3.71 % 4.17 % 4.32 % 4.62 % 3.81 % 4.52 %

Average cost of 0.22 % 0.36 % 0.75 % 0.88 % 0.94 % 0.43 % 0.91 %deposits

Efficiency ratio^(2) 52.47 % 53.70 % 67.16 % 60.93 % 59.81 % 57.35 % 61.15 %

Adjusted efficiency 52.43 % 53.70 % 66.00 % 60.51 % 58.17 % 56.98 % 57.87 %ratio^(1)(2)(3)

Non-interest expense 2.59 % 2.41 % 3.15 % 3.19 % 3.32 % 2.70 % 3.33 %to average assets

Adjustednon-interest expenseto 2.59 % 2.41 % 3.09 % 3.17 % 3.23 % 2.68 % 3.16 %

average assets^(1)(3)

Return on average 6.57 % 4.74 % 1.56 % 8.43 % 8.34 % 4.33 % 7.91 %stockholders' equity

Adjusted return onaverage 6.58 % 4.74 % 1.83 % 8.54 % 8.78 % 4.42 % 8.86 %stockholders' equity^(1)(3)(4)

Return on average 0.81 % 0.59 % 0.21 % 1.16 % 1.12 % 0.56 % 1.05 %assets

Adjusted return onaverage assets^(1) 0.81 % 0.59 % 0.25 % 1.17 % 1.18 % 0.57 % 1.18 %(3)(4)

Non-interest incometo total revenues^ 29.37 % 19.56 % 14.79 % 21.21 % 20.38 % 21.76 % 20.15 %(1)

Pre-taxpre-provision returnon 2.12 % 1.85 % 1.33 % 1.81 % 1.98 % 1.79 % 1.87 %

average assets^(1)

Adjusted pre-taxpre-provision return 2.12 % 1.85 % 1.39 % 1.83 % 2.07 % 1.80 % 2.04 %on average assets^(1)(3)

Return on averagetangible common 9.39 % 7.05 % 2.89 % 12.20 % 12.22 % 6.51 % 11.66 %stockholders' equity^(1)

Adjusted return onaverage tangible 9.40 % 7.05 % 3.25 % 12.35 % 12.82 % 6.63 % 12.94 %common stockholders'equity^(1)(3)

Non-interest-bearingdeposits to total 35.73 % 35.67 % 30.45 % 30.85 % 29.93 % 35.73 % 29.93 %

deposits

Loans and leasesheld for sale andloans and lease held 91.96 % 88.62 % 91.38 % 91.56 % 94.07 % 91.96 % 94.07 %for investment tototal deposits

Deposits to total 84.36 % 88.34 % 85.25 % 86.92 % 86.77 % 84.36 % 86.77 %liabilities

Deposits per branch $ 84,389 $ 86,989 $ 74,366 $ 67,993 $ 66,890 $ 84,389 $ 66,890



Asset Quality Ratios

Non-performing loansand leases to totalloans and leases 0.99 % 0.92 % 1.27 % 0.96 % 1.03 % 0.99 % 1.03 %held for investment,net before ALLL

ALLL to total loansand leases held for 1.40 % 1.17 % 1.08 % 0.84 % 0.82 % 1.40 % 0.82 %investment, netbefore ALLL

Net charge-offs toaverage total loansand leases held for 0.53 % 0.57 % 0.48 % 0.42 % 0.56 % 0.53 % 0.36 %investment, netbefore ALLL

Acquisitionaccounting $ 17,133 $ 19,324 $ 25,889 $ 28,511 $ 31,053 $ 17,133 $ 31,053 adjustments^(4)



Capital Ratios

Common equity to 12.08 % 12.05 % 13.12 % 13.40 % 13.34 % 12.08 % 13.34 %total assets

Tangible commonequity to tangible 9.65 % 9.55 % 10.33 % 10.47 % 10.38 % 9.65 % 10.38 %assets^(1)

Leverage ratio 10.93 % 10.29 % 11.18 % 11.39 % 11.14 % 10.93 % 11.14 %

Common equity tier 1 12.55 % 12.33 % 12.24 % 12.36 % 12.12 % 12.55 % 12.12 %capital ratio

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.

Represents a non-GAAP financial measure. See "Reconciliation of non-GAAP(1) 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.

Represents the remaining net unaccreted discount as a result of applying(4) 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

%

BYLINE BANCORP, INC. AND SUBSIDIARIES

QUARTER-TO-DATE STATEMENT OF AVERAGE INTEREST-EARNING ASSETS AND AVERAGEINTEREST-BEARING LIABILITIES (unaudited)



For the Three Months Ended September 30,

2020 2019

Interest Average Interest Average Average Average(dollars in thousands) Inc / Yield / Inc / Yield / Balance^(5) Exp Balance^(5) Exp Rate 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 $ 5,916,554 $ 58,234 3.92 % $ 4,967,906 $ 71,029 5.67 %assets

Allowance for loan and (53,964 ) (32,246 ) lease losses

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 3,173,556 2,760 0.35 % 2,839,376 9,618 1.34 %deposits

Other borrowings 538,237 465 0.34 % 563,026 2,834 2.00 %

Subordinated notes and 100,756 1,485 5.86 % 37,109 739 7.89 %debentures

Total borrowings 638,993 1,950 1.21 % 600,135 3,573 2.36 %

Total interest-bearing $ 3,812,549 $ 4,710 0.49 % $ 3,439,511 $ 13,191 1.52 %liabilities

Non-interest-bearing 1,742,787 1,223,556 demand deposits

Other liabilities 54,843 42,914

Total stockholders' 791,111 729,781 equity

TOTAL LIABILITIES AND $ 6,401,290 $ 5,435,762 STOCKHOLDERS' EQUITY

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 $ 3,911 0.26 % $ 7,703 0.62 %on margin

(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.

Loan and lease balances are net of deferred origination fees and costs and(1) initial indirect costs. Non-accrual loans and leases are included in total loan and lease balances.

Interest income and rates exclude the effects of a tax equivalent(2) 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

%

BYLINE BANCORP, INC. AND SUBSIDIARIES

YEAR-TO-DATE STATEMENT OF AVERAGE INTEREST-EARNING ASSETS AND AVERAGEINTEREST-BEARING LIABILITIES (unaudited)



For the Nine Months Ended September 30,

2020 2019

Average Average Average Interest Average Interest(dollars in thousands) Yield / Yield / Balance^(5) Inc / Exp Balance^(5) Inc / Exp Rate 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 $ 5,573,945 $ 179,305 4.30 % $ 4,797,734 $ 198,899 5.54 %assets

Allowance for loan and (43,584 ) (28,626 ) lease losses

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 3,054,793 14,810 0.65 % 2,733,651 27,000 1.32 %deposits

Other borrowings 531,395 2,838 0.71 % 498,229 7,266 1.95 %

Subordinated notes and 59,591 2,699 6.05 % 36,964 2,262 8.18 %debentures

Total borrowings 590,986 5,537 1.25 % 535,193 9,528 2.38 %

Total interest-bearing $ 3,645,779 $ 20,347 0.75 % $ 3,268,844 $ 36,528 1.49 %liabilities

Non-interest-bearing demand 1,578,704 1,221,375 deposits

Other liabilities 50,677 40,705

Total stockholders' equity 777,522 695,547

TOTAL LIABILITIES AND $ 6,052,682 $ 5,226,471 STOCKHOLDERS' EQUITY

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 $ 10,754 0.26 % $ 17,772 0.50 %on margin

(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.

Loan and lease balances are net of deferred origination fees and costs and(1) initial indirect costs. Non-accrual loans and leases are included in total loan and lease balances.

Interest income and rates exclude the effects of a tax equivalent(2) 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, 2020

June 30, 2020

March 31, 2020

December 31, 2019

September 30, 2019

September 30, 2020

September 30, 2019

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 (unaudited)



As of or For the Three Months Ended As of or For the Nine Months Ended

(dollars in September June March December September September Septemberthousands, 30, 30, 31, 31, 30, 30, 30, except per 2020 2020 2020 2019 2019 2020 2019share data)

Net income andearnings pershare excludingsignificantitems

Reported Net $ 13,071 $ 9,139 $ 2,966 $ 15,852 $ 15,342 $ 25,176 $ 41,150 Income

Significant items:

Impairmentcharges on 32 - 715 111 67 747 459 assets heldfor sale

Merger-related - - - 127 1,043 - 4,213 expense

Core systemconversion - - - 48 77 - 2,001 expense

Tax benefit onimpairmentcharges and (9 ) - (199 ) (79 ) (369 ) (208 ) (1,751 )

merger-relatedexpenses

Adjusted Net $ 13,094 $ 9,139 $ 3,482 $ 16,059 $ 16,160 $ 25,715 $ 46,072 Income

ReportedDiluted $ 0.34 $ 0.24 $ 0.07 $ 0.41 $ 0.39 $ 0.64 $ 1.07 Earnings perShare

Significant items:

Impairmentcharges on - - 0.02 - - 0.02 0.01 assets heldfor sale

Merger-related - - - 0.01 0.03 - 0.11 expense

Core systemconversion - - - - - - 0.05 expense

Tax benefit onimpairmentcharges and - - - - (0.01 ) (0.01 ) (0.04 )merger-relatedexpenses

AdjustedDiluted $ 0.34 $ 0.24 $ 0.09 $ 0.42 $ 0.41 $ 0.65 $ 1.20 Earnings perShare

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, 2020

June 30, 2020

March 31, 2020

December 31, 2019

September 30, 2019

September 30, 2020

September 30, 2019

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 inthousands,except pershare data, September June 30, March 31, December September September September 30, 2020 2020 31, 30, 30, 30, ratios 2020 2019 2019 2020 2019annualized,whereapplicable)

Adjustednon-interest expense:

Non-interest $ 41,705 $ 37,012 $ 43,527 $ 43,694 $ 45,448 $ 122,244 $ 130,081 expense

Less:Significant items

Impairmentcharges on 32 - 715 111 67 747 459 assets heldfor sale

Merger-related - - - 127 1,043 - 4,213 expense

Core systemconversion - - - 48 77 - 2,001 expense

Adjustednon-interest $ 41,673 $ 37,012 $ 42,812 $ 43,408 $ 44,261 $ 121,497 $ 123,408 expense

Adjustednon-interestexpenseexcluding

amortizationof intangibleassets:

Adjustednon-interest $ 41,673 $ 37,012 $ 42,812 $ 43,408 $ 44,261 $ 121,497 $ 123,408 expense

Less:Amortization 1,947 1,892 1,893 2,002 2,003 5,732 5,735 of intangibleassets

Adjustednon-interestexpenseexcluding $ 39,726 $ 35,120 $ 40,919 $ 41,406 $ 42,258 $ 115,765 $ 117,673

amortizationof intangibleassets

Pre-taxpre-provision net income:

Pre-tax income $ 18,331 $ 12,867 $ 4,016 $ 20,349 $ 21,265 $ 35,214 $ 56,946

Add: Provisionfor loan and 15,740 15,518 14,455 4,387 5,931 45,713 16,321 lease losses

Pre-taxpre-provision $ 34,071 $ 28,385 $ 18,471 $ 24,736 $ 27,196 $ 80,927 $ 73,267 net income

Adjustedpre-tax pre-provisionnet income:

Pre-taxpre-provision $ 34,071 $ 28,385 $ 18,471 $ 24,736 $ 27,196 $ 80,927 $ 73,267 net income

Impairmentcharges on 32 - 715 111 67 747 459 assets heldfor sale

Merger-related - - - 127 1,043 - 4,213 expense

Core systemconversion - - - 48 77 - 2,001 expense

Adjustedpre-tax $ 34,103 $ 28,385 $ 19,186 $ 25,022 $ 28,383 $ 81,674 $ 79,940 pre-provisionnet income

Total revenues:

Net interest $ 53,524 $ 52,609 $ 52,825 $ 53,914 $ 57,838 $ 158,958 $ 162,371 income

Add:Non-interest 22,252 12,788 9,173 14,516 14,806 44,213 40,977 income

Total revenues $ 75,776 $ 65,397 $ 61,998 $ 68,430 $ 72,644 $ 203,171 $ 203,348

Tangiblecommon stockholders'equity:

Totalstockholders' $ 794,696 $ 780,935 $ 762,667 $ 750,115 $ 735,866 $ 794,696 $ 735,866 equity

Less:Preferred 10,438 10,438 10,438 10,438 10,438 10,438 10,438 stock

Less: Goodwilland other 174,523 176,470 178,362 180,255 179,543 174,523 179,543 intangibles

Tangiblecommon $ 609,735 $ 594,027 $ 573,867 $ 559,422 $ 545,885 $ 609,735 $ 545,885 stockholders'equity

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: Goodwilland other 174,523 176,470 178,362 180,255 179,543 174,523 179,543 intangibles

Tangible $ 6,321,990 $ 6,217,048 $ 5,556,392 $ 5,341,554 $ 5,258,735 $ 6,321,990 $ 5,258,735 assets

Averagetangiblecommon stockholders'equity:

Average totalstockholders' $ 791,111 $ 765,427 $ 745,745 $ 729,781 $ 696,928 $ 777,522 $ 695,547 equity

Less: Averagepreferred 10,438 10,438 10,438 10,438 10,438 10,438 10,438 stock

Less: Averagegoodwill andother 175,444 179,416 179,192 180,740 175,236 177,426 172,373

intangibles

Averagetangiblecommon $ 605,229 $ 575,573 $ 556,115 $ 538,603 $ 511,254 $ 589,658 $ 512,736 stockholders'equity

Averagetangible assets:

Average total $ 6,401,290 $ 6,186,974 $ 5,565,952 $ 5,427,046 $ 5,435,762 $ 6,052,682 $ 5,226,491 assets

Less: Averagegoodwill andother 175,444 179,416 179,192 180,740 175,236 177,426 172,373

intangibles

Averagetangible $ 6,225,846 $ 6,007,558 $ 5,386,760 $ 5,246,306 $ 5,260,526 $ 5,875,256 $ 5,054,118 assets

Tangible netincomeavailable to common

stockholders:

Net incomeavailable to $ 12,875 $ 8,944 $ 2,770 $ 15,656 $ 15,146 $ 24,589 $ 40,563 commonstockholders

Add: After-taxintangible 1,405 1,365 1,366 1,445 1,445 4,136 4,138 assetamortization

Tangible netincomeavailable to $ 14,280 $ 10,309 $ 4,136 $ 17,101 $ 16,591 $ 28,725 $ 44,701 common

stockholders

Adjustedtangible netincomeavailable to common

stockholders:

Tangible netincomeavailable to $ 14,280 $ 10,309 $ 4,136 $ 17,101 $ 16,591 $ 28,725 $ 44,701 common

stockholders

Impairmentcharges on 32 - 715 111 67 747 459 assets heldfor sale

Merger-related - - - 127 1,043 - 4,213 expense

Core systemconversion - - - 48 77 - 2,001 expense

Tax benefit onsignificant (9 ) - (199 ) (79 ) (369 ) (208 ) (1,751 )items

Adjustedtangible netincome $ 14,303 $ 10,309 $ 4,652 $ 17,308 $ 17,409 $ 29,264 $ 49,623 available tocommonstockholders

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, 2020

June 30, 2020

March 31, 2020

December 31, 2019

September 30, 2019

September 30, 2020

September 30, 2019

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/

CONTACT: Investors: Tony Rossi Financial Profiles, Inc. 310-622-8221 BYIR@bylinebank.com

CONTACT: Media: Erin O'Neill Director of Marketing Byline Bank 773-475-2901 eoneill@bylinebank.com