3Q23 Earnings Presentation

Forward-Looking Statements

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.

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 our Annual Report on Form 10-K and other reports we file with the Securities and Exchange Commission, including among other things under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022. 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. Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

Current Expected Credit Loss ("CECL") Adoption

On December 31, 2022, the Company adopted CECL and applied it retrospectively to the period beginning January 1, 2022 using the modified retrospective method of accounting. Results for reporting periods beginning after September 30, 2022 are presented under the new standard, while prior quarters previously reported are recast as if the new standard had been applied since January 1, 2022.

2

Third Quarter 2023 Highlights

Net Income

$28.2 million

$33.3 million

Reported

Adjusted(1)

Efficiency Ratio

53.75%

47.35%

Reported

Adjusted(1)

Diluted EPS

$0.65

$0.77

Reported

Adjusted(1)

ROAA

1.30%

1.53%

Reported

Adjusted(1)

PTPP ROAA(1)

2.16%

2.46%

Reported

Adjusted

ROTCE(1)

16.15%

18.95%

Reported

Adjusted

Inland Bancorp Acquisition

  • Closed transaction and successfully completed core system conversion and integration during 3Q23
    • Added ~$1.0 billion in total deposits
    • Converted over 21,000 deposit accounts
    • Transitioned ~6,500 consumer and business customers to Byline Bank digital banking platforms
    • Added ~$800 million in total loans
  • Achieved employee retention targets
  • On track to deliver against targeted cost savings
  1. Represents a non-GAAP financial measure. See "Non-GAAP Reconciliation" in the appendix.
  2. Represents total securities.

Strong Financial Performance

  • GAAP EPS of $0.65; adjusted EPS(1) of $0.77
    • 3Q23 earnings impacted by $6.4 million of merger-related expenses

Record Pre-TaxPre-Provision income (1) of $46.9 million; Pre-TaxPre-Provision ROAA(1) of 2.16%

Revenue of $104.8 million, up 16% LQ & 30% YoY Net interest income of $92.5 million, up 21% LQ & 35% YoY

  • Net interest margin (FTE)(1) of 4.47%

Loan yields expanded 50 bps Deposit costs increased 43 bps Securities yields(2) expanded 39 bps Disciplined expense management with adjusted operating expenses(1): $51.2 million

Adj. efficiency ratio(1): 47.35% Adj. NIE/AA(1): 2.35%, down 25 bps LQ & 21 bps YoY

Credit quality, post-merger, remained stable: ACL as a percent of loans and leases of 1.60%, down QoQ

3

Loan and Lease Trends ($ in millions)

Total Loans & Leases and Average Yield

Highlights

$6,621

$5,309

$5,469

$5,544

$5,597

7.68%

6.83%

7.18%

6.31%

5.52%

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Total Loans and Leases

Average Loan and Lease Yield

Portfolio Composition

Utilization Rates

65%

Resi

55%

63%

LTM Average

11%

61%

C&D

8%

C&I

59%

57%

55.2%

37%

55%

Commercial

53%

51%

Real Estate

49%

34%

Leasing

47%

10%

1Q

3Q

1Q

3Q

1Q

3Q

1Q

3Q

2020

2020

2021

2021

2022

2022

2023

2023

(1) Cumulative Beta excluding loan accretion is calculated as the change in yield on loans and leases from 4Q21 to 3Q23 divided by the change in average Fed Funds from 4Q21 to 3Q23.

Total loans and leases were $6.6 billion at 3Q23, an increase of $1.0 billion from the end of the prior quarter

  • Originated $310.9 million in new loans, net of loan sales in 3Q23
    • Production driven by commercial and lease originations of $171.3 million and $86.5 million, respectively

Payoff activity decreased by $71.6 million from 2Q23

Cumulative Loan Beta(1): 41%

Originations and Payoffs

$303

$269

$312

$311

$249

$231

$256

$216

$185

$174

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Loan & Lease Originations

Loan & Lease Payoffs

4

Government-Guaranteed Lending ($ in millions)

On Balance Sheet SBA 7(a) & USDA Loans

$ Balance

% of Portfolio

Unguaranteed

$380.2

5.7%

Guaranteed

81.5

1.2%

Total SBA 7(a) Loans

$461.7

7.0%

Unguaranteed

$37.0

0.6%

Guaranteed

28.3

0.4%

Total USDA Loans

$65.3

1.0%

Highlights

  • A leading SBA 7(a) lender for Government Fiscal Year 2023
    • #5 SBA 7(a) lender in the United States
    • #1 SBA 7(a) and 504 lender in Illinois
  • Closed $113.4 million in loan commitments in 3Q23
  • SBA 7(a) portfolio $461.7 million, down $10.9 million from 2Q23
    • ACL/Unguaranteed loan balance ~8.1%
  • $1.7 billion in serviced government guaranteed loans for investors in 3Q23

Unguaranteed Loan Portfolio by Industry

Total SBC Closed Loan Commitments

Retail Trade

All Other Industries (1)

Food Services

Manufacturing

Health Care

Transportation

Wholesale Trade

Other Services

Professional

Construction

Finance and Insurance

6% 5%

5%

5%

5%

7%

8%

17%

16%

14%

12%

$151.4

$140.5

$120.9

$113.4

$71.2

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

(1) Represents sectors with less than 5% of the total portfolio.

5

Deposit Trends ($ in millions)

Deposit Composition

$5,612

$5,695

$5,813

$5,917

$6,954

2.0%

2.8%

2.9%

3.6%

4.5%

10.4%

13.4%

18.7%

20.5%

20.8%

38.4%

35.8%

35.2%

36.6%

38.0%

11.0%

10.4%

9.6%

9.0%

8.5%

38.2%

37.6%

33.6%

30.3%

28.2%

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Non Interest Checking

Interest Checking

MMDA & Savings

Time <$250K

Time >$250K

Average Non-Interest Bearing Deposits

Highlights

Total deposits increased $1.0 billion to $7.0 billion

    • Deposits excluding the acquisition increased $74.4 million, or 5.8% annualized
  • Commercial deposits accounted for 47.7% of total deposits and represent 76.8% of all non-interest-bearing deposits
  • Cost of deposits increased 43 bps in 3Q23, due to rate increases and mix changes
  • Cumulative total deposit beta remains low at ~39% since the beginning of the current tightening cycle

Cost of Interest Bearing Deposits

$2,198

$2,235

$2,077

$1,849

$1,988

Deposit Beta(1)

Interest-Bearing Deposits: 55%

Total Deposits: 39%

1.20%

0.71%

3.00%

2.49%

1.81%

2.13%

1.70%

1.15%

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

  1. Beta calculation is based on change in deposit cost divided by change in Fed Funds from 4Q21 to 3Q23.

0.43%

0.73%

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Cost of Interest Bearing Deposits

Cost of Deposits

6

Net Interest Income and Net Interest Margin Trends ($ in millions)

Net Interest Income

$92,452

$76,604

$75,718

$76,166

$68,635

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Highlights

  • Net interest income was $92.5 million, up 21.4% from 2Q23
  • Net interest margin increased 14 basis points from 2Q23 to 4.46%
  • Loan and lease yield of 7.68%, up 50 basis points from 2Q23

Interest Rate Sensitivity

  • Added $100 million in notional forward starting cash flow hedges:
    • Receive-fixed:rate of 7.15%; WAM ~3.4 years, with start dates in 2024
  • $50 million in notional cash flow hedges went effective in 3Q23
    • Pay-fixed:rate of 1.52%; WAM ~3.4 years

Repricing Mix

NIM, Yields, and Costs

NIM Bridge

7.18%

7.68%

0.03%

Libor

6.31%

6.83%

4%

5.52%

Prime

Fixed

4.03%

4.39%

4.38%

4.32%

4.46%

25%

42%

1.81%

2.17%

2.04%

2.03%

2.45%

2.13%

1.15%

1.70%

SOFR

0.43%

0.73%

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

29%

Average Loan and Lease Yield

Net Interest Margin

Taxable Securities Yield

Cost of Deposits

7

Non-Interest Income Trends ($ in millions)

Total Non-Interest Income

$15.1

$14.3

12%

$12.4

$12.0

$11.5

12%

6%

11%

10%

15%

7%

8%

8%

34%

8%

40%

47%

48%

7%

8%

52%

8%

27%

11%

18%

10%

9%

18%

18%

14%

16%

19%

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Fees and service charges on deposits

Net servicing fees

ATM and interchange fees

Net gains on sales of loans

Wealth management and trust income

Other (1)

Net Gains on Sales of Loans

Highlights

  • Non-interestincome was $12.4 million, a decrease of $1.9 million from 2Q23
    • $3.6 million FV mark on loan servicing asset charge due to higher discount rates and increased prepayments
      • Non-interestincome remained stable QoQ, excluding FV mark on loan servicing asset

Government Guaranteed Loan Sales

  • $101.6 million of guaranteed loans sold in 3Q23
  • Loans held for sale decreased to $7.3 million in 3Q23

Volume Sold and Average Net Premiums

$6.5

$120

15.00%

$5.6

$5.7

$101.6

$5.5

$5.1

$100

$86.0

$85.9

$75.4

$72.2

$80

12.00%

$60

$40

9.09%

9.00%

8.43%

8.64%

$20

8.02%

8.01%

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

$0

6.00%

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

10 year loans

25 year loans

USDA

Other

Average Net Premiums

(1) Other includes net servicing losses for 4Q22 and 3Q23.

8

Non-Interest Expense Trends ($ in millions)

Non-Interest Expense

$57.9

$50.5

$48.8

$49.3

$46.0

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Salaries and employee benefits

Occupancy and equipment

Impairment charge on assets held for sale

Data processing

Legal, audit and other

Loan and lease related

Intangible assets amortization

All other

Non-Interest Expense Bridge

$0.9

$0.8

$0.4

$3.0

$57.9

$4.9

$49.3

($0.7)

($0.7)

(1) Represents a non-GAAP financial measure. See "Non-GAAP Reconciliation" in the appendix.

Highlights

  • Non-interestexpenses increased to $57.9 million from $49.3 million in 2Q23, primarily due to merger-related expenses
    • $5.3 million in higher salaries and employee benefits
    • $2.2 million increase in data processing
  • Excluding significant items of $6.7 million, adjusted non-interest expense(1) stood at $51.2 million; adjusted efficiency ratio(1): 47.35%
    • Disciplined expense management with adjusted NIE/AA(1): 2.35%, down 25 bps LQ & 21 bps YoY

Efficiency Ratio

55.07%

55.53%

52.92%

53.75%

52.10%

55.07% 54.50%

51.54% 51.39%

47.35%

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Adjusted Efficiency Ratio(1)

Efficiency Ratio

9

Asset Quality Trends ($ in millions)

Net Charge-offs

Allowance for Credit Losses (ACL)

$5.4

$92.7

$105.7

$90.5

$4.3

$79.7

$81.9

$3.2

$1.8

0.33%

1.64%

1.66%

1.60%

$1.2

0.31%

0.24%

1.51%

1.51%

0.14%

0.09%

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Net charge-offs of loans and leases

Net charge-offs (annualized %)

ACL

ACL as % of Total Loans & Leases

NPLs / Total Loans & Leases

Delinquencies

0.84%

$36.9

0.80%

0.79%

0.04%

0.69%

0.04%

0.66%

0.06%

0.76%

0.04%

0.80%

0.05%

$15.4

$14.4

0.73%

0.56%

0.62%

0.64%

$9.6

$5.8

0.28%

0.26%

0.17%

0.11%

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Government Guaranteed NPLs

Inland Acquired NPLS

NPLs ex. Government Guaranteed

Inland

Delinquencies (30-89 Days)

Delinquencies / Total Loans and Leases

Note: Delinquencies represent accruing loans and leases past due 30 days or more. Delinquencies to Total Loans and Leases represent delinquencies divided by period end loans and leases.

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Disclaimer

Byline Bancorp Inc. published this content on 26 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 October 2023 20:22:09 UTC.