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Byline Bancorp, Inc. Reports Fourth Quarter 2018 Financial Results

January 24, 2019 4:15 PM

Fourth Quarter 2018 Highlights

Full Year 2018 Highlights

CHICAGO--(BUSINESS WIRE)-- Byline Bancorp, Inc. (the “Company” or “Byline”)(NYSE: BY), the parent company of Byline Bank (the “Bank”), today reported net income of $17.1 million, or $0.46 per diluted share, for the fourth quarter of 2018, compared with net income of $14.5 million, or $0.39 per diluted share, for the third quarter of 2018, and a net loss of $766,000, or $0.03 per diluted share, for the fourth quarter of 2017. The Company’s financial results during 2018 include certain costs associated with its acquisition and integration of First Evanston Bancorp, Inc. (“First Evanston”) and its bank subsidiary First Bank & Trust, which closed on May 31, 2018, as well as its previously announced pending acquisition of Oak Park River Forest Bankshares, Inc. Excluding these merger-related expenses, planned core system conversion expenses, and impairment charges on assets held for sale, adjusted net income1 was $18.1 million, or $0.49 per adjusted diluted share, for the fourth quarter of 2018, compared with $14.9 million, or $0.40 per adjusted diluted share, for the third quarter of 2018, and $7.3 million, or $0.24 per adjusted diluted share, for the fourth quarter of 2017. A reconciliation of adjusted net income and adjusted diluted earnings per share to net income and diluted earnings per share, respectively, according to accounting principles generally accepted in the United States of America (“GAAP”) is provided in the financial tables at the end of this release.

Alberto J. Paracchini, President and Chief Executive Officer of Byline, commented, “We delivered a very strong quarter, characterized by a strong net interest margin, improved operating performance, lower credit costs and solid organic growth, with contributions coming from our diversified commercial lending platform, branch network and government guaranteed lending business. Earnings for the quarter were the highest since our IPO, and reflect the hard work of our employees in serving customers and the successful integration of First Evanston.

“We remain focused on executing our strategy of pursuing disciplined organic growth and improving operating efficiencies in 2019. We believe our pending acquisition of Oak Park River Forest Bankshares, Inc. will enhance our position in an attractive Chicago metropolitan market, provide an important source of low-cost deposits, and further enhance the value of the Byline franchise. Completing the acquisition and ensuring a smooth transition for customers and colleagues is a top priority for 2019,” said Mr. Paracchini.

(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.

STATEMENTS OF OPERATIONS

Net Interest Income

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

� Three Months Ended � � Year Ended
December 31, � � September 30, � � June 30, � � March 31, � � December 31, December 31, � � December 31,
(dollars in thousands) 2018 2018 2018 2018 2017 2018 2017
INTEREST AND DIVIDEND

INCOME

Interest and fees on loans

and leases

$ 56,646 $ 55,045 $ 39,627 $ 33,654 $ 31,896 $ 184,972 $ 120,406
Interest on taxable securities 5,334 5,076 4,572 4,055 3,679 19,037 14,892
Interest on tax-exempt

securities

355 337 229 174 176 1,095 634
Other interest and dividend

income

� 560 � 615 � 413 � 259 � 205 � 1,847 � 871
Total interest and

dividend income

62,895 61,073 44,841 38,142 35,956 206,951 136,803
INTEREST EXPENSE
Deposits 7,115 5,971 3,745 2,498 2,218 19,329 7,736
Federal Home Loan Bank

advances

1,719 1,723 1,360 1,358 1,009 6,160 3,291
Subordinated debentures

and other borrowings

� 800 � 786 � 680 � 591 � 578 � 2,857 � 2,864
Total interest expense � 9,634 � 8,480 � 5,785 � 4,447 � 3,805 � 28,346 � 13,891
Net interest income $ 53,261 $ 52,593 $ 39,056 $ 33,695 $ 32,151 $ 178,605 $ 122,912
�

The following table presents the quarter-to-date schedule of average interest-earning assets and average interest-bearing liabilities for the periods indicated:

� For the Three Months Ended
December 31, � September 30,
2018 2018
(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 $ 91,852 $ 316 1.37 % $ 107,555 $ 368 1.36 %
Loans and leases(1) 3,470,264 56,646 6.48 % 3,387,569 55,045 6.45 %
Securities available-for-sale 798,234 5,005 2.49 % 768,189 4,738 2.45 %
Securities held-to-maturity 88,115 573 2.58 % 91,892 585 2.53 %
Tax-exempt securities(2) � 56,649 � 355 2.48 % � 55,656 � 337 2.40 %
Total interest-earning assets $ 4,505,114 $ 62,895 5.54 % $ 4,410,861 $ 61,073 5.49 %
Allowance for loan and lease losses (24,215 ) (21,557 )
All other assets � 415,535 � 420,635
TOTAL ASSETS $ 4,896,434 $ 4,809,939
LIABILITIES AND STOCKHOLDERS’

EQUITY

Deposits
Interest checking $ 308,821 $ 407 0.52 % $ 316,394 $ 384 0.48 %
Money market accounts 653,141 1,505 0.91 % 618,213 1,200 0.77 %
Savings 489,486 157 0.13 % 479,837 148 0.12 %
Time deposits � 1,130,308 � 5,046 1.77 % � 1,084,550 � 4,239 1.55 %
Total interest-bearing

deposits

2,581,756 7,115 1.09 % 2,498,994 5,971 0.95 %
Federal Home Loan Bank advances 360,891 1,719 1.89 % 394,588 1,723 1.73 %
Other borrowed funds � 65,226 � 800 4.86 % � 61,582 � 786 5.06 %
Total borrowings � 426,117 � 2,519 2.35 % � 456,170 � 2,509 2.18 %
Total interest-bearing liabilities $ 3,007,873 $ 9,634 1.27 % $ 2,955,164 $ 8,480 1.14 %
Non-interest bearing demand deposits 1,194,445 1,175,523
Other liabilities 54,231 53,631
Total stockholders’ equity � 639,885 � 625,621
TOTAL LIABILITIES AND

STOCKHOLDERS’ EQUITY

$ 4,896,434 $ 4,809,939
Net interest spread(3) � 4.27 % � 4.35 %
Net interest income $ 53,261 $ 52,593
Net interest margin(4) � 4.69 % � 4.73 %
�
Net loan accretion impact on margin $ 6,351 � 0.56 % $ 8,259 � 0.74 %
Net interest margin excluding loan

accretion(6)

� 4.13 % � 3.99 %
� � � � (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.
(6) 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.
�

Net interest income for the fourth quarter of 2018 was $53.3 million, an increase of $668,000, or 1.3%, from $52.6 million for the third quarter of 2018.

The increase in net interest income was primarily due to:

Partially offset by:

Net interest margin for the fourth quarter of 2018 was 4.69%, a decrease of four basis points compared to 4.73% for the third quarter of 2018. Total net accretion income on acquired loans contributed 56 basis points to the net interest margin for the fourth quarter of 2018 compared to 74 basis points for the third quarter of 2018, a decrease of 18 basis points. Net interest margin excluding loan accretion increased 14 basis points to 4.13% during the fourth quarter of 2018, compared to 3.99% for the third quarter of 2018. Despite a $1.9 million decrease in net loan accretion, interest and fees on loans and leases increased $1.6 million for the fourth quarter of 2018 compared to the third quarter of 2018.

The average cost of total deposits was 0.75% for the fourth quarter of 2018, an increase of 11 basis points compared to the third quarter of 2018, primarily due to increased rates on interest bearing deposits. Additionally, there was growth in average time deposits of $45.8 million and money market accounts of $34.9 million, partially offset by growth in average non-interest bearing demand deposits of $18.9 million.

Provision for Loan and Lease Losses

The provision for loan and lease losses was $3.9 million for the fourth quarter of 2018, a decrease of $1.9 million compared to $5.8 million for the third quarter of 2018. The fourth quarter provision included allocations of $2.5 million for originated loans and leases, $1.6 million for acquired non-impaired loans, and a $152,000 release for acquired impaired loans. The decreased provision during the fourth quarter of 2018 was primarily due to a reduction in specific impairment in the unguaranteed portion of the government guaranteed portfolio offset by increases to the general reserve driven by originated loan and lease portfolio growth.

Non-interest Income

The following table presents the components of non-interest income for the periods indicated:

� Three Months Ended � Year Ended
December 31, � September 30, � June 30, � March 31, � December 31, December 31, � December 31,
(dollars in thousands) 2018 2018 2018 2018 2017 2018 2017
NON-INTEREST INCOME
Fees and service charges on

deposits

$ 1,852 $ 1,825 $ 1,456 $ 1,312 $ 1,304 $ 6,445 $ 5,289
Loan servicing revenue 2,667 2,622 2,533 2,450 2,548 10,272 9,599
Loan servicing asset revaluation (2,862 ) (2,446 ) (2,074 ) (1,887 ) (1,844 ) (9,269 ) (5,941 )
ATM and interchange fees 1,286 1,781 1,141 1,218 1,498 5,426 5,840
Net gains on sales of securities

available-for-sale

160 — 4 — — 164 8
Net gains on sales of loans 9,337 5,015 9,723 7,476 9,036 31,551 33,062
Wealth management and

trust income

679 674 192 — — 1,545 —
Other non-interest income � 1,447 � 1,672 � 1,527 � 859 � 97 � 5,505 � 2,201
Total non-interest income $ 14,566 $ 11,143 $ 14,502 $ 11,428 $ 12,639 $ 51,639 $ 50,058
�

Non-interest income for the fourth quarter of 2018 was $14.6 million, an increase of $3.4 million compared to $11.1 million for the third quarter of 2018.

The increase in total non-interest income was primarily due to:

Partially offset by:

During the fourth quarter of 2018, the Company sold $87.4 million of government guaranteed loans compared to $59.6 million during the third quarter of 2018, contributing to the increase in net gains on sale of loans for the quarter. The increase in sales is primarily due to the timing of loans closed becoming fully funded and mix of loans sold. While the current government shutdown may impact our level of originations and government guaranteed loan sales during the first quarter of 2019, as a Small Business Administration (“SBA”) preferred lender with an experienced team, we continue to source new transactions and remain ready to resume normal operations after the shutdown ends.

Non-interest Expense

The following table presents the components of non-interest expense for the periods indicated:

�

Three Months Ended

Year Ended

December 31, � � September 30, � June 30, � � March 31, � December 31, � December 31, � � December 31,
(dollars in thousands) 2018 2018 2018 2018 2017 2018 2017
NON-INTEREST EXPENSE
Salaries and employee benefits $ 21,548 $ 21,312 $ 19,244 $ 18,278 $ 17,118 $ 80,382 $ 67,269
Occupancy expense, net 4,027 3,548 4,499 3,755 3,553 15,829 14,078
Equipment expense 641 617 558 603 663 2,419 2,472
Loan and lease related expenses 2,223 1,015 1,471 1,400 1,116 6,109 3,685
Legal, audit and other professional

fees

2,746 2,358 4,418 1,851 2,658 11,373 7,027
Data processing 2,846 2,724 10,371 2,301 2,284 18,242 9,539
Net loss (gain) recognized on other

real estate owned and other related

expenses

48 (284 ) 472 (1 ) (430 ) 235 (294 )
Regulatory assessments 462 675 366 241 299 1,744 1,193
Other intangible assets amortization

expense

1,834 1,898 1,130 767 767 5,629 3,074
Advertising and promotions 590 537 347 249 232 1,723 1,035
Telecommunications 391 435 466 418 428 1,710 1,593
Other non-interest expense � 3,008 � 3,121 � 2,428 � 2,057 � 1,670 � 10,614 � 8,852
Total non-interest expense $ 40,364 $ 37,956 $ 45,770 $ 31,919 $ 30,358 $ 156,009 $ 119,523
�

Non-interest expense for the fourth quarter of 2018 was $40.4 million, an increase of $2.4 million from $38.0 million for the third quarter of 2018.

The increase in total non-interest expense was primarily due to:

Partially offset by:

The Company’s efficiency ratio was 56.81% for the fourth quarter of 2018, compared with 56.57% for the third quarter of 2018. Excluding merger-related expenses, planned core system conversion expenses, and impairment charges on assets held for sale, the Company’s adjusted efficiency ratio1 was 54.95% for the fourth quarter of 2018, compared with 55.78% for the third quarter of 2018.

(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.

INCOME TAXES

The Company recorded income tax expense of $6.5 million during the fourth quarter of 2018, an effective tax rate of 27.4%, compared to $5.4 million during the third quarter of 2018, an effective tax rate of 27.1%, an increase of $1.1 million. The increase was primarily due to the increase in net income recorded during the quarter.

STATEMENTS OF FINANCIAL CONDITION

Total assets were $4.9 billion at December�31, 2018, an increase of $25.2 million compared to $4.9 billion at September�30, 2018, and an increase of $1.6 billion compared to $3.4 billion at December 31, 2017.

The current quarter increase was primarily due to:

Partially offset by:

The following table shows our allocation of the originated, acquired impaired and acquired non-impaired loans and leases at the dates indicated:

� December 31, 2018 � September 30, 2018 � December 31, 2017
(dollars in thousands) Amount � % of Total Amount � % of Total Amount � % of Total
Originated loans and leases � � �
Commercial real estate $ 652,234 18.6 % $ 619,767 17.9 % $ 513,622 22.5 %
Residential real estate 466,309 13.3 % 445,717 12.9 % 400,571 17.6 %
Construction, land development, and

other land

144,128 4.1 % 140,391 4.1 % 97,638 4.3 %
Commercial and industrial 803,508 22.9 % 696,750 20.2 % 416,499 18.3 %
Installment and other 11,718 0.3 % 7,729 0.2 % 3,724 0.2 %
Leasing financing receivables � 159,901 � 4.6 % � 155,825 � 4.5 % � 141,329 � 6.2 %
Total originated loans and leases $ 2,237,798 63.8 % $ 2,066,179 59.8 % $ 1,573,383 69.1 %
Acquired impaired loans
Commercial real estate $ 146,808 4.2 % $ 154,108 4.5 % $ 166,712 7.3 %
Residential real estate 113,934 3.3 % 120,963 3.5 % 144,562 6.4 %
Construction, land development, and

other land

3,779 0.1 % 4,203 0.1 % 5,946 0.3 %
Commercial and industrial 12,617 0.4 % 14,436 0.4 % 10,008 0.4 %
Installment and other � 404 � 0.0 % � 458 � 0.0 % � 462 � 0.0 %
Total acquired impaired loans $ 277,542 8.0 % $ 294,168 8.5 % $ 327,690 14.4 %
Acquired non-impaired loans and leases
Commercial real estate $ 462,565 13.2 % $ 498,329 14.4 % $ 211,359 9.3 %
Residential real estate 124,659 3.6 % 138,516 4.0 % 32,085 1.4 %
Construction, land development, and

other land

37,442 1.1 % 37,111 1.1 % 1,845 0.1 %
Commercial and industrial 328,672 9.4 % 384,260 11.1 % 94,731 4.1 %
Installment and other 1,596 0.0 % 4,007 0.1 % 42 0.0 %
Leasing financing receivables � 31,352 � 0.9 % � 33,232 � 1.0 % � 36,357 � 1.6 %
Total acquired non-impaired loans

and leases

$ 986,286 � 28.2 % $ 1,095,455 � 31.7 % $ 376,419 � 16.5 %
Total loans and leases $ 3,501,626 � 100.0 % $ 3,455,802 � 100.0 % $ 2,277,492 � 100.0 %
Allowance for loan and lease losses � (25,201 ) � (23,424 ) � (16,706 )
Total loans and leases, net of allowance for

loan and lease losses

$ 3,476,425 $ 3,432,378 $ 2,260,786
�

ASSET QUALITY

Non-Performing Assets

The following table sets forth the amounts of non-performing loans and leases, non-performing assets, and other real estate owned at the dates indicated:

� December 31, � September 30, � June 30, � March 31, � December 31,
(dollars in thousands) 2018 2018 2018 2018 2017
Nonperforming assets:
Non-accrual loans and leases $ 25,834 $ 28,643 $ 25,742 $ 23,626 $ 15,763
Past due loans and leases 90 days or more

and still accruing interest

— 291 197 — —
Accruing troubled debt restructured loans � 1,813 � 1,230 � 1,238 � 1,037 � 1,061
Total non-performing loans and leases 27,647 30,164 27,177 24,663 16,824
Other real estate owned � 5,314 � 4,891 � 6,402 � 10,466 � 10,626
Total non-performing assets $ 32,961 $ 35,055 $ 33,579 $ 35,129 $ 27,450
Total non-performing loans and leases as a

percentage of total loans and leases

0.79 % 0.87 % 0.81 % 1.08 % 0.74 %
Total non-performing assets as a percentage

of total assets

0.67 % 0.71 % 0.70 % 1.01 % 0.82 %
Allowance for loan and lease losses as a

percentage of non-performing loans and

leases

91.15 % 77.65 % 72.44 % 71.53 % 99.30 %
�
Nonperforming assets guaranteed by

U.S. government:

Non-accrual loans guaranteed $ 4,245 $ 6,830 $ 6,810 $ 6,266 $ 4,543
Past due loans 90 days or more and still

accruing interest guaranteed

— — 152 — —
Accruing troubled debt restructured loans

guaranteed

� 381 � 431 � — � � — � � —
Total non-performing loans and leases

guaranteed

4,626 7,261 6,962 6,266 4,543
Other real estate owned guaranteed � — � — � 298 � 482 � —
Total non-performing assets guaranteed $ 4,626 $ 7,261 $ 7,260 $ 6,748 $ 4,543
Total non-performing loans and leases

not guaranteed as a percentage of total

loans and leases

0.66 % 0.66 % 0.60 % 0.81 % 0.54 %
Total non-performing assets not guaranteed

as a percentage of total assets

0.57 % 0.57 % 0.55 % 0.82 % 0.68 %
�

Variances in non-performing assets:

Non-performing assets included $4.6 million of government guaranteed balances at December�31, 2018 and $7.3 million at September�30, 2018, a decrease of $2.7 million primarily due to guarantee collections from the SBA.

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

�

�

Year Ended

December 31, � September 30, � June 30, � March 31, � December 31, � December 31, � December 31,
(dollars in thousands) 2018 2018 2018 2018 2017 2018 2017
Allowance for loan and lease

losses, beginning of period

$ 23,424 $ 19,687 $ 17,640 $ 16,706 $ 15,980 $ 16,706 $ 10,923
Provision for loan and lease losses 3,882 5,842 3,956 5,115 3,347 18,795 12,653
Net charge-offs of loans and leases � (2,105 ) � (2,105 ) � (1,909 ) � (4,181 ) � (2,621 ) � (10,300 ) � (6,870 )
Allowance for loan and lease

losses, end of period

$ 25,201 $ 23,424 $ 19,687 $ 17,640 $ 16,706 $ 25,201 $ 16,706
�
Allowance for loan and lease

losses to period end total loans

held for investment

0.72 % 0.68 % 0.59 % 0.77 % 0.73 % 0.72 % 0.73 %
Net charge-offs (annualized) to

average loans and leases

outstanding during the period

0.24 % 0.25 % 0.29 % 0.75 % 0.46 % 0.35 % 0.31 %
Provision for loan and lease losses

to net charge-offs during the

period

1.84x 2.77x 2.07x 1.22x 1.28x 1.82x 1.84x
�

The allowance for loan and lease losses as a percentage of total loans and leases held for investment decreased from 0.73% at December 31, 2017, and increased from 0.68% at September�30, 2018, compared to 0.72% at December�31, 2018.

Net Charge-Offs

Net charge-offs during the fourth quarter of 2018 were $2.1 million, or 0.24% of average loans and leases, on an annualized basis, consistent with $2.1 million, or 0.25% of average loans, during the third quarter of 2018, and a decrease from 0.46% for the comparable quarter one year ago. The decrease in net charge-offs as a percentage of average loans and leases was primarily due to higher loan and lease average balances during the fourth quarter.

Net charge-offs for the fourth quarter of 2018 included $1.8 million in the unguaranteed portion of government guaranteed loans while net charge-offs for the third quarter of 2018 included $1.5 million in the unguaranteed portion of government guaranteed loans.

Deposits and Other Liabilities

The following table presents the composition of deposits at the dates indicated:

� December 31, � � September 30, � � June 30, � � March 31, � � December 31,
(dollars in thousands) 2018 2018 2018 2018 2017
Non-interest bearing demand deposits $ 1,192,873 $ 1,175,222 $ 1,193,057 $ 749,892 $ 760,887
Interest bearing checking accounts 296,339 317,145 287,330 196,802 186,611
Money market demand accounts 640,401 661,271 617,108 382,282 349,862
Other savings 476,418 476,879 487,130 439,277 437,212
Time deposits (below $250,000) 911,603 916,014 879,643 665,541 627,255
Time deposits ($250,000 and above) � 232,282 � 194,236 � 180,609 � 90,753 � 81,502
Total deposits $ 3,749,916 $ 3,740,767 $ 3,644,877 $ 2,524,547 $ 2,443,329
�

Total deposits were $3.7 billion at December�31, 2018, an increase of $9.1 million compared to September�30, 2018, primarily due to continued deposit promotions. Non-interest bearing deposits to total deposits increased slightly from 31.4% at September�30, 2018 to 31.8% at December�31, 2018.

The increase in the current quarter was primarily due to:

Partially offset by:

Total borrowings and other liabilities were $542.0 million at December�31, 2018, a decrease of $4.8 million from $546.8 million at September�30, 2018, primarily due to a decrease in accrued expenses and other liabilities partially offset by an increase in securities sold under agreements to repurchase.

Stockholders’ Equity

Total stockholders’ equity was $650.7 million at December�31, 2018, an increase of $20.8 million from $629.9 million at September�30, 2018, primarily due to net income generated during the quarter. Stockholders’ equity increased $192.1 million from $458.6 million at December 31, 2017, primarily due to the $152.1 million in stock consideration issued in connection with the First Evanston acquisition.

The following table presents the actual regulatory capital dollar amounts and ratios of the Company and Byline Bank as of December�31, 2018:

� Actual � � Minimum Capital

Required

� Required for the Bank

to be Considered

Well Capitalized

December 31, 2018 Amount � � Ratio � Amount � � Ratio Amount � � Ratio
Total capital to risk weighted assets: � � � � �
Company $ 551,716 14.01 % $ 315,144 8.00 % N/A N/A
Bank 528,965 13.41 % 315,505 8.00 % $ 394,382 10.00 %
Tier 1 capital to risk weighted assets:
Company $ 524,445 13.31 % $ 236,358 6.00 % N/A N/A
Bank 501,695 12.72 % 236,629 6.00 % $ 315,505 8.00 %
Common Equity Tier 1 (CET1) to

risk weighted assets:

Company $ 467,507 11.87 % $ 177,269 4.50 % N/A N/A
Bank 501,695 12.72 % 177,472 4.50 % $ 256,348 6.50 %
Tier 1 capital to average assets:
Company $ 524,445 11.06 % $ 189,613 4.00 % N/A N/A
Bank 501,695 10.57 % 189,823 4.00 % $ 237,278 5.00 %
�

Capital ratios for the period presented are based on the Basel III regulatory capital framework as applied to the Company’s current business and operations, and are subject to, among other things, completion and filing of the Company’s regulatory reports and ongoing regulatory review and implementation guidance.

Conference Call, Webcast and Slide Presentation

The Company will host a conference call and webcast at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) on Friday, January 25, 2019 to discuss its 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 February 8, 2019 by dialing (877) 344-7529; passcode: 10127801.

A slide presentation relating to the fourth quarter 2018 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 $4.9 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 10 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 share, tangible common equity to tangible assets, return on average tangible common stockholders' equity, adjusted return on average tangible common stockholders' equity, and net interest margin excluding loan accretion. 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.

Adjusted net income and adjusted diluted earnings per share exclude certain significant items, which include incremental income tax benefit related to the Company’s reversal of its valuation allowance on its net deferred tax assets, incremental income tax benefit related to Illinois corporate income tax rate increases, incremental income tax expense or benefit related to federal corporate income tax reductions, impairment charges on assets held for sale, merger-related expenses, and core system conversion expenses adjusted for applicable income tax. Management believes the significant items are not indicative of or useful to measure the Company’s operating performance on an ongoing basis.

Adjusted non-interest expense is non-interest expense excluding certain significant items, which include impairment charges on assets held for sale, merger-related expenses, and core system conversion expenses.

Adjusted efficiency ratio is adjusted non-interest expense less amortization of intangible assets divided by net interest income and non-interest income. Management believes the metric is an important measure of the Company’s operating performance on an ongoing basis.

Adjusted non-interest expense to average assets is adjusted non-interest expense divided by average assets. Management believes the metric is an important measure of the Company’s operating performance on an ongoing basis.

Adjusted return on average stockholders’ equity is adjusted net income divided by average stockholders’ equity. Management believes the metric is an important measure of the Company’s operating performance on an ongoing basis.

Adjusted return on average assets is adjusted net income divided by average assets. Management believes the metric is an important measure of the Company’s operating performance on an ongoing basis.

Non-interest income to total revenues is non-interest income divided by net interest income plus non-interest income. Management believes that it is standard practice in the industry to present non-interest income as a percentage of total revenue. Accordingly, management believes providing these measures may be useful for peer comparison.

Pre-tax pre-provision net income is pre-tax income plus the provision for loan and lease losses. Management believes this metric is important due to the tax benefit resulting from the reversal of the net deferred tax asset valuation allowance, the decrease in the federal corporate income tax rate, and the increase in the Illinois state corporate income tax rate. The metric demonstrates income excluding the tax provision or benefit and excludes the provision for loan and lease losses.

Adjusted pre-tax pre-provision net income is pre-tax pre-provision net income excluding certain significant items, which include impairment charges on assets held for sale, merger-related expenses, and core system conversion expenses. Management believes the metric is an important measure of the Company’s operating performance on an ongoing basis.

Pre-tax pre-provision return on average assets is pre-tax income plus the provision for loan and lease losses, divided by average assets. Management believes this metric is important due to the change in tax expense or benefit resulting from the recent decrease in the federal corporate income tax rate and the recent increase in the Illinois state income tax rate. The ratio demonstrates profitability excluding the tax provision or benefit and excludes the provision for loan and lease losses.

Adjusted pre-tax pre-provision return on average assets excludes certain significant items, which include impairment charges on assets held for sale, merger related expenses, and core system conversion expenses.

Tangible common equity is defined as total stockholders’ equity reduced by preferred stock and goodwill and other intangible assets. Management does not consider servicing assets as an intangible asset for purposes of this calculation.

Tangible assets is defined as total assets reduced by goodwill and other intangible assets. Management does not consider servicing assets as an intangible asset for purposes of this calculation.

Tangible book value per share is calculated as tangible common equity, which is stockholders’ equity reduced by preferred stock and goodwill and other intangible assets, divided by total shares of common stock outstanding. Management believes this metric is important due to the relative changes in the book value per share exclusive of changes in intangible assets.

Tangible common equity to tangible assets is calculated as tangible common equity divided by tangible assets, which is total assets reduced by goodwill and other intangible assets. Management believes this metric is important to investors and analysts interested in relative changes in the ratio of total stockholders’ equity to total assets, each exclusive of changes in intangible assets.

Tangible net income available to common stockholders is net income available to common stockholders excluding after-tax intangible asset amortization.

Adjusted tangible net income is tangible net income available to common stockholders excluding certain significant items, which include incremental income tax benefit related to Byline’s reversal of its valuation allowance on its net deferred tax assets, incremental income tax benefit related to Illinois corporate income tax rate increases, incremental income tax expense or benefit related to federal corporate income tax reductions, impairment charges on assets held for sale, merger-related expenses, and core system conversion expenses adjusted for applicable income tax. Management believes the metric is an important measure of the Company’s operating performance on an ongoing basis.

Return on average tangible common stockholders’ equity is tangible net income available to common stockholders divided by average tangible common stockholders’ equity. Management believes the metric is an important measure of the Company’s operating performance on an ongoing basis.

Adjusted return on average tangible common stockholders’ equity is adjusted tangible net income available to common stockholders divided by average tangible common stockholders’ equity. Management believes the metric is an important measure of the Company’s operating performance on an ongoing basis.

Net interest margin excluding loan accretion is calculated as reported net interest margin less the effect of accretion income net of contractual interest collected on acquired loans. Management believes that this metric is important as it illustrates the impact of net accretion income from acquired loans on the net interest margin.

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.

In addition, this communication contains forward-looking statements related to the pending merger of Byline and Oak Park River Forest Bankshares, Inc., including, but not limited to, with respect to the expected completion date, financial benefits and other effects of the transaction. Factors that could cause actual results to differ materially from those presented in this communication regarding the pending merger may include, but are not limited to, the reaction to the transaction of the companies’ customers, employees, and counterparties; customer disintermediation; inflation; expected synergies, costs savings, and other financial benefits of the proposed transaction that might not be realized within the expected timeframes or might be less than projected; the requisite Oak Park River Forest Bankshares, Inc. stockholder approval for the proposed transaction might not be obtained; credit and interest rate risks associated with Byline’s and Oak Park River Forest Bankshares, Inc.’s respective businesses, customers, borrowings, repayment, investment, and deposit practices; general economic conditions, either nationally or in the market areas in which Byline and Oak Park River Forest Bankshares, Inc. operate or anticipate doing business, are less favorable than expected; new regulatory or legal requirements or obligations, and other risks.

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 such Annual Report on Form 10-K. 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)

� � � � �
December 31, September 30, June 30, March 31, December 31,
(dollars in thousands) 2018 2018 2018 2018 2017
ASSETS
Cash and due from banks $ 30,190 $ 25,162 $ 25,299 $ 17,396 $ 19,404
Interest bearing deposits with other banks � 91,670 � 119,594 � 127,417 � 110,645 � 38,945
Cash and cash equivalents 121,860 144,756 152,716 128,041 58,349
Securities available-for-sale, at fair value 817,656 795,408 757,825 626,057 583,236
Securities held-to-maturity, at amortized cost 99,266 102,683 106,613 112,266 117,163
Restricted stock, at cost 19,202 19,202 18,977 17,177 16,343
Loans held for sale 19,827 8,737 5,822 8,219 5,212
Loans and leases:
Loans and leases 3,501,626 3,455,802 3,348,692 2,280,418 2,277,492
Allowance for loan and lease losses � (25,201 ) � (23,424 ) � (19,687 ) � (17,640 ) � (16,706 )
Net loans and leases 3,476,425 3,432,378 3,329,005 2,262,778 2,260,786
Servicing assets, at fair value 19,693 20,674 21,587 21,615 21,400
Accrued interest receivable 10,863 11,331 10,670 6,971 7,670
Premises and equipment, net 98,568 106,948 107,300 94,014 95,224
Assets held for sale 14,489 8,343 11,428 9,030 9,779
Other real estate owned, net 5,314 4,891 6,402 10,466 10,626
Goodwill 127,536 127,536 127,536 54,562 54,562
Other intangible assets, net 33,419 35,248 37,139 15,991 16,756
Bank-owned life insurance 5,961 5,923 5,886 5,838 5,718
Deferred tax assets, net 35,395 42,287 48,936 47,371 47,376
Due from counterparty 5,338 14,484 25,569 19,987 39,824
Other assets � 31,762 � 36,580 � 31,869 � 21,989 � 16,106
Total assets $ 4,942,574 $ 4,917,409 $ 4,805,280 $ 3,462,372 $ 3,366,130
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Non-interest bearing demand deposits $ 1,192,873 $ 1,175,222 $ 1,193,057 $ 749,892 $ 760,887
Interest bearing deposits:
NOW, savings accounts, and money market accounts 1,413,158 1,455,295 1,391,568 1,018,361 973,685
Time deposits � 1,143,885 � 1,110,250 � 1,060,252 � 756,294 � 708,757
Total deposits 3,749,916 3,740,767 3,644,877 2,524,547 2,443,329
Accrued interest payable 3,484 2,971 2,562 1,612 1,306
Line of credit — — — — —
Federal Home Loan Bank advances 425,000 425,000 420,000 380,000 361,506
Securities sold under agreements to repurchase 34,166 24,446 24,653 27,815 31,187
Junior subordinated debentures issued to capital trusts, net 36,768 36,615 36,452 27,800 27,647
Accrued expenses and other liabilities � 42,568 � 57,749 � 60,330 � 37,662 � 42,577
Total liabilities 4,291,902 4,287,548 4,188,874 2,999,436 2,907,552
STOCKHOLDERS’ EQUITY
Preferred stock 10,438 10,438 10,438 10,438 10,438
Common stock 361 361 360 293 292
Additional paid-in capital 546,849 545,827 544,686 392,932 391,586
Retained earnings 102,522 85,597 71,257 68,687 61,349
Accumulated other comprehensive loss, net of tax � (9,498 ) � (12,362 ) � (10,335 ) � (9,414 ) � (5,087 )
Total stockholders’ equity � 650,672 � 629,861 � 616,406 � 462,936 � 458,578
Total liabilities and stockholders’ equity $ 4,942,574 $ 4,917,409 $ 4,805,280 $ 3,462,372 $ 3,366,130
�

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

� �
Three Months Ended Year Ended
December 31, � September 30, � June 30, � March 31, � December 31, December 31, � December 31,
(dollars in thousands, except share and per share data) 2018 2018 2018 2018 2017 2018 2017
INTEREST AND DIVIDEND INCOME
Interest and fees on loans and leases $ 56,646 $ 55,045 $ 39,627 $ 33,654 $ 31,896 $ 184,972 $ 120,406
Interest on taxable securities 5,334 5,076 4,572 4,055 3,679 19,037 14,892
Interest on tax-exempt securities 355 337 229 174 176 1,095 634
Other interest and dividend income � 560 � 615 � 413 � 259 � 205 � 1,847 � 871
Total interest and dividend income 62,895 61,073 44,841 38,142 35,956 206,951 136,803
INTEREST EXPENSE
Deposits 7,115 5,971 3,745 2,498 2,218 19,329 7,736
Federal Home Loan Bank advances 1,719 1,723 1,360 1,358 1,009 6,160 3,291
Subordinated debentures and other

borrowings

� 800 � 786 � 680 � 591 � 578 � 2,857 � 2,864
Total interest expense � 9,634 � 8,480 � 5,785 � 4,447 � 3,805 � 28,346 � 13,891
Net interest income 53,261 52,593 39,056 33,695 32,151 178,605 122,912
PROVISION FOR LOAN AND LEASE LOSSES � 3,882 � 5,842 � 3,956 � 5,115 � 3,347 � 18,795 � 12,653
Net interest income after provision

for loan and lease losses

49,379 46,751 35,100 28,580 28,804 159,810 110,259
NON-INTEREST INCOME
Fees and service charges on deposits 1,852 1,825 1,456 1,312 1,304 6,445 5,289
Loan servicing revenue 2,667 2,622 2,533 2,450 2,548 10,272 9,599
Loan servicing asset revaluation (2,862 ) (2,446 ) (2,074 ) (1,887 ) (1,844 ) (9,269 ) (5,941 )
ATM and interchange fees 1,286 1,781 1,141 1,218 1,498 5,426 5,840
Net gains on sales of securities

available-for-sale

160 — 4 — — 164 8
Net gains on sales of loans 9,337 5,015 9,723 7,476 9,036 31,551 33,062
Wealth management and trust income 679 674 192 — — 1,545 —
Other non-interest income � 1,447 � 1,672 � 1,527 � 859 � 97 � 5,505 � 2,201
Total non-interest income 14,566 11,143 14,502 11,428 12,639 51,639 50,058
NON-INTEREST EXPENSE
Salaries and employee benefits 21,548 21,312 19,244 18,278 17,118 80,382 67,269
Occupancy expense, net 4,027 3,548 4,499 3,755 3,553 15,829 14,078
Equipment expense 641 617 558 603 663 2,419 2,472
Loan and lease related expenses 2,223 1,015 1,471 1,400 1,116 6,109 3,685
Legal, audit and other professional fees 2,746 2,358 4,418 1,851 2,658 11,373 7,027
Data processing 2,846 2,724 10,371 2,301 2,284 18,242 9,539
Net loss (gain) recognized on other real

estate owned and other related expenses

48 (284 ) 472 (1 ) (430 ) 235 (294 )
Regulatory assessments 462 675 366 241 299 1,744 1,193
Other intangible assets amortization

expense

1,834 1,898 1,130 767 767 5,629 3,074
Advertising and promotions 590 537 347 249 232 1,723 1,035
Telecommunications 391 435 466 418 428 1,710 1,593
Other non-interest expense � 3,008 � 3,121 � 2,428 � 2,057 � 1,670 � 10,614 � 8,852
Total non-interest expense � 40,364 � 37,956 � 45,770 � 31,919 � 30,358 � 156,009 � 119,523
INCOME BEFORE PROVISION FOR INCOME

TAXES

23,581 19,938 3,832 8,089 11,085 55,440 40,794
PROVISION (BENEFIT) FOR INCOME TAXES � 6,460 � 5,402 � 1,064 � 1,321 � 11,851 � 14,247 � 19,099
NET INCOME (LOSS) 17,121 14,536 2,768 6,768 (766 ) 41,193 21,695
Dividends on preferred shares � 196 � 196 � 198 � 193 � 196 � 783 � 11,277
INCOME AVAILABLE (LOSS

ATTRIBUTABLE) TO COMMON

STOCKHOLDERS

$ 16,925 $ 14,340 $ 2,570 $ 6,575 $ (962 ) $ 40,410 $ 10,418
EARNINGS (LOSS) PER COMMON SHARE
Basic $ 0.47 $ 0.40 $ 0.08 $ 0.22 $ (0.03 ) $

1.21

$ 0.39
Diluted $ 0.46 $ 0.39 $ 0.08 $ 0.22 $ (0.03 ) $ 1.18 $ 0.38
Weighted average common shares

outstanding for basic earnings (loss)

per common share

36,116,189 36,042,914 31,614,973 29,291,179 29,246,900 33,292,619 26,963,517
Diluted weighted average common

shares outstanding for diluted earnings

(loss) per common share

36,906,379 36,958,209 32,568,396 29,913,633 29,246,900 34,186,969 27,547,314
�

BYLINE BANCORP, INC. AND SUBSIDIARIES

SELECTED FINANCIAL DATA (unaudited)

� �
As of or For the Three Months Ended As of or For the Year Ended
December 31, � September 30, � June 30, � March 31, � December 31, December 31, � December 31,
(dollars in thousands, except share and per share data) 2018 2018 2018 2018 2017 2018 2017
Summary of Operations
Net interest income $ 53,261 $ 52,593 $ 39,056 $ 33,695 $ 32,151 $ 178,605 $ 122,912
Provision for loan and lease losses 3,882 5,842 3,956 5,115 3,347 18,795 12,653
Non-interest income 14,566 11,143 14,502 11,428 12,639 51,639 50,058
Non-interest expense � 40,364 � 37,956 � 45,770 � 31,919 � 30,358 � 156,009 � 119,523
Income before provision for income taxes 23,581 19,938 3,832 8,089 11,085 55,440 40,794
Provision for income taxes � 6,460 � 5,402 � 1,064 � 1,321 � 11,851 � 14,247 � 19,099
Net income (loss) 17,121 14,536 2,768 6,768 (766 ) 41,193 21,695
Dividends on preferred shares � 196 � 196 � 198 � 193 � 196 � 783 � 11,277
Net income available (loss attributable)

to common stockholders

$ 16,925 $ 14,340 $ 2,570 $ 6,575 $ (962 ) $ 40,410 $ 10,418
�
Earnings per Common Share
Basic earnings (loss) per common share $ 0.47 $ 0.40 $ 0.08 $ 0.22 $ (0.03 ) $

1.21

$ 0.39
Diluted earnings (loss) per common share $ 0.46 $ 0.39 $ 0.08 $ 0.22 $ (0.03 ) $ 1.18 $ 0.38
Adjusted diluted earnings (loss) per common share(2)(3)(4) $ 0.49 $ 0.40 $ 0.32 $ 0.21 $ 0.24 $ 1.43 $ 0.52
Weighted average common shares

outstanding (basic)

36,116,189 36,042,914 31,614,973 29,291,179 29,246,900 33,292,619 26,963,517
Weighted average common shares

outstanding (diluted)

36,906,379 36,958,209 32,568,396 29,913,633 29,246,900 34,186,969 27,547,314
Common shares outstanding 36,343,239 36,279,600 36,218,955 29,404,048 29,317,298 36,343,239 29,317,298
�
Key Ratios and performance metrics

(annualized where applicable)

Net interest margin 4.69 % 4.73 % 4.43 % 4.45 % 4.26 % 4.60 % 4.11 %
Cost of deposits 0.75 % 0.64 % 0.52 % 0.41 % 0.35 % 0.60 % 0.31 %
Efficiency ratio(1) 56.81 % 56.57 % 83.35 % 69.04 % 66.06 % 65.31 % 67.32 %
Adjusted efficiency ratio(1)(2)(3) 54.95 % 55.78 % 63.48 % 68.77 % 63.23 % 59.87 % 66.04 %
Non-interest expense to average assets 3.27 % 3.13 % 4.75 % 3.85 % 3.64 % 3.68 % 3.62 %
Adjusted non-interest expense to average

assets(2)(3)

3.17 % 3.09 % 3.65 % 3.84 % 3.49 % 3.39 % 3.55 %
Return on average stockholders' equity 10.61 % 9.22 % 2.14 % 5.97 % (0.66 )% 7.34 % 5.08 %
Adjusted return on average stockholders' equity(2)(3)(4) 11.21 % 9.47 % 8.18 % 5.41 % 6.22 % 8.85 % 5.97 %
Return on average assets 1.39 % 1.20 % 0.29 % 0.82 % (0.09 )% 0.97 % 0.66 %
Adjusted return on average assets(2)(3)(4) 1.47 % 1.23 % 1.10 % 0.74 % 0.87 % 1.17 % 0.77 %
Non-interest income to total revenues(2) 21.48 % 17.48 % 27.08 % 25.33 % 28.22 % 22.43 % 28.94 %
Pre-tax pre-provision return on average assets(2) 2.23 % 2.13 % 0.81 % 1.59 % 1.73 % 1.75 % 1.62 %
Adjusted pre-tax pre-provision return on average

assets(2)(3)

2.33 % 2.17 % 1.91 % 1.61 % 1.89 % 2.05 % 1.69 %
Return on average tangible common stockholders'

equity(2)(3)

15.49 % 13.81 % 3.34 % 7.65 % (0.52 )% 10.44 % 3.61 %
Adjusted return on average tangible common

stockholders' equity(2)(3)(4)

16.31 % 14.16 % 11.05 % 6.96 % 7.78 % 12.44 % 4.73 %
Non-interest bearing deposits to total deposits 31.81 % 31.42 % 32.73 % 29.70 % 31.14 % 31.81 % 31.14 %
Loans and leases held for sale and loans and

lease held for investment to total deposits

93.91 % 92.62 % 92.03 % 90.66 % 93.43 % 93.91 % 93.43 %
Deposits to total liabilities 87.37 % 87.25 % 87.01 % 84.17 % 84.03 % 87.37 % 84.03 %
Deposits per branch $ 63,558 $ 63,403 $ 61,778 $ 45,081 $ 43,631 $ 63,558 $ 43,631
Tangible book value per common share(2) $ 13.19 $ 12.59 $ 12.18 $ 12.99 $ 12.85 $ 13.19 $ 12.85
�
Asset Quality Ratios
Non-performing loans and leases to total loans and

leases held for investment, net before ALLL

0.79 % 0.87 % 0.81 % 1.08 % 0.74 % 0.79 % 0.74 %
ALLL to total loans and leases held for investment,

net before ALLL

0.72 % 0.68 % 0.59 % 0.77 % 0.73 % 0.72 % 0.73 %
Net charge-offs to average total loans and leases

held for investment, net before ALLL

0.24 % 0.25 % 0.29 % 0.75 % 0.46 % 0.35 % 0.31 %
Acquisition accounting adjustments(5) $ 34,029 $ 42,375 $ 52,090 $ 28,058 $ 31,693 $ 34,029 $ 31,693
�
Capital Ratios
Common equity to total assets 12.95 % 12.60 % 12.63 % 13.07 % 13.31 % 12.95 % 13.31 %
Tangible common equity to tangible assets(2) 10.02 % 9.60 % 9.51 % 11.26 % 11.51 % 10.02 % 11.51 %
Leverage ratio 11.06 % 10.78 % 10.57 % 12.14 % 12.25 % 11.06 % 12.25 %
Common equity tier 1 capital ratio 11.87 % 11.26 % 10.88 % 13.49 % 13.77 % 11.87 % 13.77 %
Tier 1 capital ratio 13.31 % 12.71 % 12.36 % 15.30 % 15.27 % 13.31 % 15.27 %
Total capital ratio 14.01 % 13.37 % 12.92 % 16.05 % 15.98 % 14.01 % 15.98 %
� � � � (1) � Represents non-interest expense less amortization of intangible assets divided by net interest income and non-interest income.
(2) 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.
(3) Calculation excludes impairment charges, merger-related expenses, and core systems conversion expense.
(4) Calculation excludes incremental income tax expense or benefit related to changes in corporate income tax rates and reversal of valuation allowance on net deferred tax assets.
(5) Represents the remaining unamortized premium or unaccreted discount as a result of applying the fair value adjustment at the time of the business combination on acquired loans.
�

BYLINE BANCORP, INC. AND SUBSIDIARIES

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

�
For the Three Months Ended December 31,
2018 � 2017
(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 $ 91,852 $ 316 1.37 % $ 38,908 $ 74 0.75 %
Loans and leases(1) 3,470,264 56,646 6.48 % 2,233,863 31,896 5.66 %
Securities available-for-sale 798,234 5,005 2.49 % 588,482 3,166 2.13 %
Securities held-to-maturity 88,115 573 2.58 % 106,367 644 2.40 %
Tax-exempt securities(2) � 56,649 � 355 2.48 % � 27,504 � 176 2.55 %
Total interest-earning assets $ 4,505,114 $ 62,895 5.54 % $ 2,995,124 $ 35,956 4.76 %
Allowance for loan and lease losses (24,215 ) (16,844 )
All other assets � 415,535 � 325,393
TOTAL ASSETS $ 4,896,434 $ 3,303,673
LIABILITIES AND STOCKHOLDERS’

EQUITY

Deposits
Interest checking $ 308,821 $ 407 0.52 % $ 188,457 $ 31 0.07 %
Money market accounts 653,141 1,505 0.91 % 384,864 344 0.35 %
Savings 489,486 157 0.13 % 436,916 78 0.07 %
Time deposits � 1,130,308 � 5,046 1.77 % � 709,044 � 1,765 0.99 %
Total interest-bearing

deposits

2,581,756 7,115 1.09 % 1,719,281 2,218 0.51 %
Federal Home Loan Bank advances 360,891 1,719 1.89 % 261,888 1,009 1.53 %
Other borrowed funds � 65,226 � 800 4.86 % � 58,794 � 578 3.90 %
Total borrowings � 426,117 � 2,519 2.35 % � 320,682 � 1,587 1.96 %
Total interest-bearing liabilities $ 3,007,873 $ 9,634 1.27 % $ 2,039,963 $ 3,805 0.74 %
Non-interest bearing demand deposits 1,194,445 767,985
Other liabilities 54,231 32,424
Total stockholders’ equity � 639,885 � 463,301
TOTAL LIABILITIES AND

STOCKHOLDERS’ EQUITY

$ 4,896,434 $ 3,303,673
Net interest spread(3) � 4.27 % � 4.02 %
Net interest income $ 53,261 $ 32,151
Net interest margin(4) � 4.69 % � 4.26 %
�
Net loan accretion impact on margin $ 6,351 � 0.56 % $ 2,301 � 0.30 %
Net interest margin excluding loan

accretion(6)

� 4.13 % � 3.96 %
� � � � (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.
(6) 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.
�

BYLINE BANCORP, INC. AND SUBSIDIARIES

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

�
For the Year Ended December 31,
2018 � 2017
(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 $ 76,710 $ 964 1.26 % $ 50,865 $ 401 0.79 %
Loans and leases(1) 2,947,458 184,972 6.28 % 2,193,956 120,406 5.48 %
Securities available-for-sale 722,841 17,568 2.43 % 604,762 12,691 2.10 %
Securities held-to-maturity 94,519 2,352 2.49 % 114,143 2,671 2.34 %
Tax-exempt securities(2) � 44,245 � 1,095 2.47 % � 23,413 � 634 2.71 %
Total interest-earning assets $ 3,885,773 $ 206,951 5.33 % $ 2,987,139 $ 136,803 4.58 %
Allowance for loan and lease losses (20,378 ) (13,755 )
All other assets � 373,207 � 328,847
TOTAL ASSETS $ 4,238,602 $ 3,302,231
LIABILITIES AND STOCKHOLDERS’

EQUITY

Deposits
Interest checking $ 260,405 $ 953 0.37 % $ 186,177 $ 118 0.06 %
Money market accounts 522,599 3,857 0.74 % 378,796 1,056 0.28 %
Savings 465,322 465 0.10 % 443,024 316 0.07 %
Time deposits � 954,686 � 14,054 1.47 % � 764,114 � 6,246 0.82 %
Total interest-bearing

deposits

2,203,012 19,329 0.88 % 1,772,111 7,736 0.44 %
Federal Home Loan Bank advances 365,533 6,160 1.69 % 252,720 3,291 1.30 %
Other borrowed funds � 60,259 � 2,857 4.74 % � 66,280 � 2,864 4.32 %
Total borrowings � 425,792 � 9,017 2.12 % � 319,000 � 6,155 1.93 %
Total interest-bearing liabilities $ 2,628,804 $ 28,346 1.08 % $ 2,091,111 $ 13,891 0.66 %
Non-interest bearing demand deposits 1,002,955 744,797
Other liabilities 45,275 38,984
Total stockholders’ equity � 561,568 � 427,339
TOTAL LIABILITIES AND

STOCKHOLDERS’ EQUITY

$ 4,238,602 $ 3,302,231
Net interest spread(3) � 4.25 % � 3.92 %
Net interest income $ 178,605 $ 122,912
Net interest margin(4) � 4.60 % � 4.11 %
�
Net loan accretion impact on margin $ 20,550 � 0.53 % $ 8,647 � 0.29 %
Net interest margin excluding loan

accretion(6)

� 4.07 % � 3.82 %
� � � � (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 divided by total average earning assets.
(5) Average balances are average daily balances.
(6) 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.
�

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 Year Ended
(dollars in thousands,

except per share data)

December 31,

2018

� September 30,

2018

� June 30,

2018

� March 31,

2018

� December 31,

2017

December 31,

2018

� December 31,

2017

Net income (loss) and earnings per

share excluding significant items

Reported Net Income (Loss) $ 17,121 $ 14,536 $ 2,768 $ 6,768 $ (766 ) $ 41,193 $ 21,695
Significant items:
Incremental income tax benefit

of state tax rate change

— — — — — — (4,790 )
Incremental income tax (benefit)

expense attributed to federal

income tax reform

— — — (724 ) 7,154 (724 ) 7,154
Impairment charges on assets

held for sale

372 139 117 — — 628 951
Merger-related expense 266 150 1,517 123 1,272 2,056 1,272
Core system conversion expense 625 213 9,009 — — 9,847 —
Tax benefit on significant items � (297 ) � (112 ) � (2,832 ) � (34 ) � (395 ) � (3,275 ) � (781 )
Adjusted Net Income $ 18,087 $ 14,926 $ 10,579 $ 6,133 $ 7,265 $ 49,725 $ 25,501
Reported Diluted Earnings (Loss)

per Share

$ 0.46 $ 0.39 $ 0.08 $ 0.22 $ (0.03 ) $ 1.18 $ 0.38
Significant items:
Incremental income tax benefit

of state tax rate change

— — — — — — (0.17 )
Incremental income tax (benefit)

expense attributed to federal

income tax reform

— — — (0.02 ) 0.24 (0.02 ) 0.26
Impairment charges on assets

held for sale

0.01 — — — — 0.02 0.03
Merger-related expense 0.01 — 0.05 0.01 0.04 0.06 0.05
Core system conversion expense 0.02 0.01 0.28 — — 0.29 —
Tax benefit on significant items � (0.01 ) � — � (0.09 ) � — � (0.01 ) � (0.10 ) � (0.03 )
Adjusted Diluted Earnings per

Share

$ 0.49 $ 0.40 $ 0.32 $ 0.21 $ 0.24 $ 1.43 $ 0.52
�

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 Year Ended
(dollars in thousands, except share and per

share data, ratios annualized, where applicable)

December 31,

2018

� September 30,

2018

� June 30,

2018

� March 31,

2018

� December 31,

2017

December 31,

2018

� December 31,

2017

Adjusted non-interest expense:
Non-interest expense $ 40,364 $ 37,956 $ 45,770 $ 31,919 $ 30,358 $ 156,009 $ 119,523
Less: significant items
Impairment charges on assets held for sale 372 139 117 — — 628 951
Merger-related expense 266 150 1,517 123 1,272 2,056 1,272
Core system conversion expense 625 213 9,009 — — 9,847 —
Adjusted non-interest expense $ 39,101 $ 37,454 $ 35,127 $ 31,796 $ 29,086 $ 143,478 $ 117,300
Adjusted non-interest expense excluding

amortization of intangible assets:

Adjusted non-interest expense $ 39,101 $ 37,454 $ 35,127 $ 31,796 $ 29,086 $ 143,478 $ 117,300
Less: Amortization of intangible assets 1,834 1,898 1,130 767 767 5,629 3,074
Adjusted non-interest expense excluding

amortization of intangible assets

37,267 35,556 33,997 31,029 28,319 137,849 114,226
Pre-tax pre-provision net income:
Pre-tax income $ 23,581 $ 19,938 $ 3,832 $ 8,089 $ 11,085 $ 55,440 $ 40,794
Add: Provision for loan and lease losses 3,882 5,842 3,956 5,115 3,347 18,795 12,653
Pre-tax pre-provision net income $ 27,463 $ 25,780 $ 7,788 $ 13,204 $ 14,432 $ 74,235 $ 53,447
Adjusted pre-tax pre-provision net income:
Pre-tax pre-provision net income $ 27,463 $ 25,780 $ 7,788 $ 13,204 $ 14,432 $ 74,235 $ 53,447
Impairment charges on assets held for sale 372 139 117 — — 628 951
Merger-related expense 266 150 1,517 123 1,272 2,056 1,272
Core system conversion expense 625 213 9,009 — — 9,847 —
Adjusted pre-tax pre-provision net income $ 28,726 $ 26,282 $ 18,431 $ 13,327 $ 15,704 $ 86,766 $ 55,670
Total revenues:
Net interest income $ 53,261 $ 52,593 $ 39,056 $ 33,695 $ 32,151 $ 178,605 $ 122,912
Add: non-interest income 14,566 11,143 14,502 11,428 12,639 51,639 50,058
Total revenues $ 67,827 $ 63,736 $ 53,558 $ 45,123 $ 44,790 $ 230,244 $ 172,970
Tangible common stockholders' equity:
Total stockholders' equity $ 650,672 $ 629,861 $ 616,406 $ 462,936 $ 458,578 $ 650,672 $ 458,578
Less: Preferred stock 10,438 10,438 10,438 10,438 10,438 10,438 10,438
Less: Goodwill 127,536 127,536 127,536 54,562 54,562 127,536 54,562
Less: Core deposit intangibles and other intangibles 33,419 35,248 37,139 15,991 16,756 33,419 16,756
Tangible common stockholders' equity $ 479,279 $ 456,639 $ 441,293 $ 381,945 $ 376,822 $ 479,279 $ 376,822
Tangible assets:
Total assets $ 4,942,574 $ 4,917,409 $ 4,805,280 $ 3,462,372 $ 3,366,130 $ 4,942,574 $ 3,366,130
Less: Goodwill 127,536 127,536 127,536 54,562 54,562 127,536 54,562
Less: Core deposit intangibles and other intangibles 33,419 35,248 37,139 15,991 16,756 33,419 16,756
Tangible assets $ 4,781,619 $ 4,754,625 $ 4,640,605 $ 3,391,819 $ 3,294,812 $ 4,781,619 $ 3,294,812
Average tangible common stockholders' equity:
Average total stockholders' equity $ 639,885 $ 625,621 $ 518,547 $ 459,535 $ 463,301 $ 561,568 $ 427,339
Less: Average preferred stock 10,438 10,438 10,438 10,438 10,438 10,438 17,837
Less: Average goodwill 127,536 127,536 78,619 54,562 52,003 97,347 51,975
Less: Average core deposit intangibles and other

intangibles

34,564 36,444 22,998 16,417 17,186 27,679 18,360
Average tangible common stockholders' equity $ 467,347 $ 451,203 $ 406,492 $ 378,118 $ 383,674 $ 426,104 $ 339,167
Average tangible assets:
Average total assets $ 4,896,434 $ 4,809,939 $ 3,863,184 $ 3,362,071 $ 3,303,673 $ 4,238,602 $ 3,302,231
Less: Average goodwill 127,536 127,536 78,619 54,562 52,003 97,347 51,975
Less: Average core deposit intangibles and other intangibles 34,564 36,444 22,998 16,417 17,186 27,679 18,360
Average tangible assets $ 4,734,334 $ 4,645,959 $ 3,761,567 $ 3,291,092 $ 3,234,484 $ 4,113,576 $ 3,231,896
Tangible net income available (loss attributable)

to common stockholders:

Net income available (loss attributable) to

common stockholders

$ 16,925 $ 14,340 $ 2,570 $ 6,575 $ (962 ) $ 40,410 $ 10,418
Add: After-tax intangible asset amortization 1,322 1,370 815 553 455 4,061 1,825
Tangible net income available (loss attributable) to

common stockholders

$ 18,247 $ 15,710 $ 3,385 $ 7,128 $ (507 ) $ 44,471 $ 12,243
Adjusted Tangible net income available (loss

attributable) to common stockholders:

Tangible net income available (loss attributable) to

common stockholders

$ 18,247 $ 15,710 $ 3,385 $ 7,128 $ (507 ) $ 44,471 $ 12,243
Incremental income tax benefit of state tax rate

change

— — — — — — (4,790 )
Incremental income tax (benefit) expense

attributed to federal income tax reform

— — — (724 ) 7,154 (724 ) 7,154
Impairment charges on assets held for sale 372 139 117 — — 628 951
Merger-related expense 266 150 1,517 123 1,272 2,056 1,272
Core system conversion expense 625 213 9,009 — — 9,847 —
Tax benefit on significant items (297 ) (112 ) (2,832 ) (34 ) (395 ) (3,275 ) (781 )
Adjusted tangible net income available (loss

attributable) to common stockholders

$ 19,213 $ 16,100 $ 11,196 $ 6,493 $ 7,524 $ 53,003 $ 16,049
�

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 Year Ended
(dollars in thousands, except share and per

share data, ratios annualized, where applicable)

December 31,

2018

� September 30,

2018

� June 30,

2018

� March 31,

2018

� December 31,

2017

December 31,

2018

� December 31,

2017

Net interest margin:
Reported net interest margin 4.69 % 4.73 % 4.43 % 4.45 % 4.26 % 4.60 % 4.11 %
Effect of accretion income on acquired loans (0.56 )% (0.74 )% (0.41 )% (0.31 )% (0.30 )% (0.53 )% (0.29 )%
Net interest margin excluding accretion 4.13 % 3.99 % 4.02 % 4.14 % 3.96 % 4.07 % 3.82 %
Pre-tax pre-provision return on average assets:
Pre-tax pre-provision net income $ 27,463 $ 25,780 $ 7,788 $ 13,204 $ 14,432 $ 74,235 $ 53,447
Total average assets 4,896,434 4,809,939 3,863,184 3,362,071 3,303,673 4,238,602 3,302,231
Pre-tax pre-provision return on average assets 2.23 % 2.13 % 0.81 % 1.59 % 1.73 % 1.75 % 1.62 %
Adjusted Pre-tax pre-provision return on average

assets:

Adjusted pre-tax pre-provision net income $ 28,726 $ 26,282 $ 18,431 $ 13,327 $ 15,704 $ 86,766 $ 55,670
Total average assets 4,896,434 4,809,939 3,863,184 3,362,071 3,303,673 4,238,602 3,302,231
Adjusted pre-tax pre-provision return on average

assets

2.33 % 2.17 % 1.91 % 1.61 % 1.89 % 2.05 % 1.69 %
Non-interest income to total revenues:
Non-interest income $ 14,566 $ 11,143 $ 14,502 $ 11,428 $ 12,639 $ 51,639 $ 50,058
Total revenues 67,827 63,736 53,558 45,123 44,790 230,244 172,970
Non-interest income to total revenues 21.48 % 17.48 % 27.08 % 25.33 % 28.22 % 22.43 % 28.94 %
Adjusted non-interest expense to average assets:
Adjusted non-interest expense $ 39,101 $ 37,454 $ 35,127 $ 31,796 $ 29,086 $ 143,478 $ 117,300
Total average assets 4,896,434 4,809,939 3,863,184 3,362,071 3,303,673 4,238,602 3,302,231
Adjusted non-interest expense to average

assets

3.17 % 3.09 % 3.65 % 3.84 % 3.49 % 3.39 % 3.55 %
Adjusted efficiency ratio:
Adjusted non-interest expense excluding

amortization of intangible assets

$ 37,267 $ 35,556 $ 33,997 $ 31,029 $ 28,319 $ 137,849 $ 114,226
Total revenues 67,827 63,736 53,558 45,123 44,790 230,244 172,970
Adjusted efficiency ratio 54.95 % 55.78 % 63.48 % 68.77 % 63.23 % 59.87 % 66.04 %
Adjusted return on average assets:
Adjusted net income $ 18,087 $ 14,926 $ 10,579 $ 6,133 $ 7,265 $ 49,725 $ 25,501
Total average assets 4,896,434 4,809,939 3,863,184 3,362,071 3,303,673 4,238,602 3,302,231
Adjusted return on average assets 1.47 % 1.23 % 1.10 % 0.74 % 0.87 % 1.17 % 0.77 %
Adjusted return on average stockholders' equity:
Adjusted net income $ 18,087 $ 14,926 $ 10,579 $ 6,133 $ 7,265 $ 49,725 $ 25,501
Average stockholders' equity 639,885 625,621 518,547 459,535 463,301 561,568 427,339
Adjusted return on average stockholders' equity 11.21 % 9.47 % 8.18 % 5.41 % 6.22 % 8.85 % 5.97 %
Tangible common equity to tangible assets:
Tangible common equity $ 479,279 $ 456,639 $ 441,293 $ 381,945 $ 376,822 $ 479,279 $ 376,822
Tangible assets 4,781,619 4,754,625 4,640,605 3,391,819 3,294,812 4,781,619 3,294,812
Tangible common equity to tangible assets 10.02 % 9.60 % 9.51 % 11.26 % 11.51 % 10.02 % 11.51 %
Return on average tangible common stockholders'

equity:

Tangible net income available (loss attributable)

to common stockholders

$ 18,247 $ 15,710 $ 3,385 $ 7,128 $ (507 ) $ 44,471 $ 12,243
Average tangible common stockholders' equity 467,347 451,203 406,492 378,118 383,674 426,104 339,167
Return on average tangible common stockholders'

equity:

15.49 % 13.81 % 3.34 % 7.65 % (0.52 )% 10.44 % 3.61 %
Adjusted return on average tangible common

stockholders' equity:

Adjusted tangible net income available (loss

attributable) to common stockholders

$ 19,213 $ 16,100 $ 11,196 $ 6,493 $ 7,524 $ 53,003 $ 16,049
Average tangible common stockholders' equity 467,347 451,203 406,492 378,118 383,674 426,104 339,167
Adjusted return on average tangible common

stockholders' equity

16.31 % 14.16 % 11.05 % 6.96 % 7.78 % 12.44 % 4.73 %
Tangible book value per share:
Tangible common equity $ 479,279 $ 456,639 $ 441,293 $ 381,945 $ 376,822 $ 479,279 $ 376,822
Shares of common stock outstanding 36,343,239 36,279,600 36,218,955 29,404,048 29,317,298 36,343,239 29,317,298
Tangible book value per share $ 13.19 $ 12.59 $ 12.18 $ 12.99 $ 12.85 $ 13.19 $ 12.85

Investors:

Allyson Pooley/Tony Rossi

Financial Profiles, Inc.

[email protected]

Media:

Erin O’Neill

Director of Marketing

Byline Bank

773-475-2901

[email protected]

Source: Byline Bancorp, Inc.

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