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Byline Bancorp, Inc. Reports First Quarter 2019 Financial Results

April 25, 2019 4:15 PM

First Quarter 2019 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 $12.6 million, or $0.34 per diluted share, for the first quarter of 2019, compared with net income of $17.1 million, or $0.46 per diluted share, for the fourth quarter of 2018, and net income of $6.8 million, or $0.22 per diluted share, for the first quarter of 2018. The Company’s financial results include certain costs associated with its integration of First Evanston Bancorp, Inc. (“First Evanston”) and its bank subsidiary First Bank & Trust, and its pending acquisition of Oak Park River Forest Bankshares, Inc. Excluding these merger-related expenses, core system conversion expenses, and impairment charges on assets held for sale, adjusted net income1 was $14.0 million, or $0.38 per adjusted diluted share, for the first quarter of 2019, compared with $18.1 million, or $0.49 per adjusted diluted share, for the fourth quarter of 2018, and $6.1 million, or $0.21 per adjusted diluted share, for the first quarter of 2018. 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.

_______________

� � (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.
�

Alberto J. Paracchini, President and Chief Executive Officer of Byline, commented, “We are pleased to report another quarter of strong results driven by solid organic growth, stable asset quality and operating performance despite challenges in the operating environment.

“During the quarter, and thanks to our bankers and team members, we continued to experience healthy growth in our loan and deposit portfolio and eclipsed $5.0 billion in total assets. We also successfully completed a core system conversion during the quarter, an important milestone, which reflects positively on the hard work and dedication of our employees.

“We remain focused on executing our strategy of pursuing disciplined organic growth 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. Oak Park River Forest recently received its stockholders’ approval for the transaction, which we expect to close this quarter. Completing the acquisition and ensuring a smooth transition for customers and colleagues is a top priority for the remainder of 2019,” said Mr. Paracchini.

STATEMENTS OF OPERATIONS

Net Interest Income

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

� Three Months Ended
March 31, � December 31, � September 30, � June 30, � March 31,
(dollars in thousands) 2019 2018 2018 2018 2018
INTEREST AND DIVIDEND INCOME
Interest and fees on loans and leases $ 54,383 $ 56,646 $ 55,045 $ 39,627 $ 33,654
Interest on taxable securities 5,759 5,334 5,076 4,572 4,055
Interest on tax-exempt securities 343 355 337 229 174
Other interest and dividend income � 625 � 560 � 615 � 413 � 259

Total interest and dividend income

61,110 62,895 61,073 44,841 38,142
INTEREST EXPENSE
Deposits 8,076 7,115 5,971 3,745 2,498
Federal Home Loan Bank advances 2,099 1,719 1,723 1,360 1,358

Subordinated debentures and other borrowings

� 850 � 800 � 786 � 680 � 591
Total interest expense � 11,025 � 9,634 � 8,480 � 5,785 � 4,447
Net interest income $ 50,085 $ 53,261 $ 52,593 $ 39,056 $ 33,695

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
March 31, 2019 � December 31, 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 $ 66,765 $ 301 1.83% $ 91,852 $ 316 1.37%
Loans and leases(1) 3,533,973 54,383 6.24% 3,470,264 56,646 6.48%
Taxable securities 926,129 6,083 2.66% 886,349 5,578 2.50%
Tax-exempt securities(2) � 55,198 � � 343 2.52% � 56,649 � � 355 2.48%
Total interest-earning assets $ 4,582,065 � $ 61,110 5.41% $ 4,505,114 � $ 62,895 5.54%
Allowance for loan and lease losses (25,354 ) (24,215 )
All other assets � 406,995 � � 415,535 �
TOTAL ASSETS $ 4,963,706 � $ 4,896,434 �

LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits
Interest checking $ 293,049 $ 413 0.57% $ 308,821 $ 407 0.52%
Money market accounts 613,001 1,460 0.97% 653,141 1,505 0.91%
Savings 471,206 138 0.12% 489,486 157 0.13%
Time deposits � 1,195,417 � � 6,065 2.06% � 1,130,308 � � 5,046 1.77%

Total interest-bearing deposits

2,572,673 8,076 1.27% 2,581,756 7,115 1.09%
Federal Home Loan Bank advances 433,372 2,099 1.96% 360,891 1,719 1.89%
Other borrowed funds � 71,280 � � 850 4.84% � 65,226 � � 800 4.86%
Total borrowings � 504,652 � � 2,949 2.37% � 426,117 � � 2,519 2.35%
Total interest-bearing liabilities $ 3,077,325 $ 11,025 1.45% $ 3,007,873 $ 9,634 1.27%
Non-interest-bearing demand deposits 1,185,981 1,194,445
Other liabilities 41,244 54,231
Total stockholders’ equity � 659,156 � � 639,885 �

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 4,963,706 � $ 4,896,434 �
Net interest spread(3) 3.96% 4.27%
Net interest income $ 50,085 $ 53,261
Net interest margin(4) 4.43% 4.69%
�
Net loan accretion impact on margin $ 5,201 0.46% $ 6,351 0.56%

Net interest margin excluding loan accretion(6)

3.97% 4.13%
�
� � (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 first quarter of 2019 was $50.1 million, a decrease of $3.2 million, or 6.0%, from $53.3 million for the fourth quarter of 2018.

The decrease in net interest income was primarily due to:

Partially offset by:

Net interest margin for the first quarter of 2019 was 4.43%, a decrease of 26 basis points compared to 4.69% for the fourth quarter of 2018. Total net accretion income on acquired loans contributed 46 basis points to the net interest margin for the first quarter of 2019 compared to 56 basis points for the fourth quarter of 2018, a decrease of 10 basis points. Net interest margin excluding loan accretion decreased 16 basis points to 3.97% during the first quarter of 2019, compared to 4.13% for the fourth quarter of 2018.

The average cost of total deposits was 0.87% for the first quarter of 2019, an increase of 12 basis points compared to the fourth quarter of 2018, primarily due to increased rates on interest-bearing deposits. Additionally, there was growth in average time deposits of $65.1 million, partially offset by decreases in average money market accounts of $40.1 million, average interest checking of $15.8 million, and average savings of $18.3 million.

Provision for Loan and Lease Losses

The provision for loan and lease losses was $4.0 million for the first quarter of 2019, an increase of $117,000 compared to $3.9 million for the fourth quarter of 2018. The first quarter provision included allocations of $2.0 million for originated loans and leases, $1.6 million for acquired non-impaired loans, and $354,000 for acquired impaired loans. The increased provision during the first quarter of 2019 was primarily due to increases in the general reserves driven by newly originated loans and renewals of acquired non-impaired loans that are now reflected with originated loans, and specific impairments in the unguaranteed balance of the U.S. government guaranteed portfolio.

Non-interest Income

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

� Three Months Ended
March 31, � December 31, � September 30, � June 30, � March 31,
(dollars in thousands) � 2019 � � 2018 � � 2018 � � 2018 � � 2018 �
NON-INTEREST INCOME
Fees and service charges on deposits $ 1,770 $ 1,852 $ 1,825 $ 1,456 $ 1,312
Loan servicing revenue 2,539 2,667 2,622 2,533 2,450
Loan servicing asset revaluation (1,261 ) (2,862 ) (2,446 ) (2,074 ) (1,887 )
ATM and interchange fees 717 1,010 1,540 850 913

Net gains on sales of securities available-for-sale

— 160 — 4 —
Change in fair value of equity securities, net 499 — — — —
Net gains on sales of loans 6,233 9,337 5,015 9,723 7,476
Wealth management and trust income 595 679 674 192 —
Other non-interest income � 896 � � 1,447 � � 1,672 � � 1,527 � � 859 �
Total non-interest income $ 11,988 � $ 14,290 � $ 10,902 � $ 14,211 � $ 11,123 �

Non-interest income for the first quarter of 2019 was $12.0 million, a decrease of $2.3 million compared to $14.3 million for the fourth quarter of 2018.

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

Partially offset by:

During the first quarter of 2019, the Company sold $66.2 million of U.S. government guaranteed loans compared to $87.4 million during the fourth quarter of 2018, contributing to the decrease in net gains on sale of loans for the quarter. The decrease in sales is primarily due to the timing of loans closed becoming fully funded and the mix of loans sold. The fourth quarter of 2018 includes sales of $30.1 million of USDA loans while the first quarter of 2019 included $479,000.

Non-interest Expense

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

� Three Months Ended
March 31, � December 31, � September 30, � June 30, � March 31,
(dollars in thousands) � 2019 � 2018 � 2018 � 2018 � 2018 �
NON-INTEREST EXPENSE
Salaries and employee benefits $ 22,892 $ 21,548 $ 21,312 $ 19,244 $ 18,278
Occupancy expense, net 4,280 4,027 3,548 4,499 3,755
Equipment expense 669 641 617 558 603
Loan and lease related expenses 1,577 2,223 1,015 1,471 1,400
Legal, audit and other professional fees 2,066 2,746 2,358 4,418 1,851
Data processing 3,273 2,846 2,724 10,371 2,301

Net loss (gain) recognized on other real estate owned and other related expenses

196 48 (284 ) 472 (1 )
Regulatory assessments (59 ) 462 675 366 241

Other intangible assets amortization expense

1,773 1,834 1,898 1,130 767
Advertising and promotions 709 590 537 347 249
Telecommunications 464 391 435 466 418
Other non-interest expense � 2,839 � � 2,732 � 2,880 � � 2,137 � 1,752 �
Total non-interest expense $ 40,679 � $ 40,088 $ 37,715 � $ 45,479 $ 31,614 �

Non-interest expense for the first quarter of 2019 was $40.7 million, an increase of $591,000, or 1.5%, from $40.1 million for the fourth quarter of 2018.

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

Partially offset by:

The Company’s efficiency ratio was 62.68% for the first quarter of 2019, compared with 56.63% for the fourth quarter of 2018. Excluding merger-related expenses, core system conversion expenses, and impairment charges on assets held for sale, the Company’s adjusted efficiency ratio1 was 59.55% for the first quarter of 2019, compared with 54.76% for the fourth 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 $4.8 million during the first quarter of 2019, an effective tax rate of 27.6%, compared to $6.5 million during the fourth quarter of 2018, an effective tax rate of 27.4%, a decrease of $1.7 million. The decrease was primarily due to the decrease in net income recorded during the quarter.

STATEMENTS OF FINANCIAL CONDITION

Total assets were $5.0 billion at March�31, 2019, an increase of $67.4 million compared to $4.9 billion at December 31, 2018, and an increase of $1.5 billion compared to $3.5 billion at March 31, 2018.

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:

� March 31, 2019 � December 31, 2018 � March 31, 2018
(dollars in thousands) Amount � % of Total Amount � % of Total Amount � % of Total
Originated loans and leases
Commercial real estate $ 738,832 20.7% $ 652,234 18.6% $ 485,324 21.3%
Residential real estate 494,877 13.9% 466,309 13.3% 397,516 17.4%

Construction, land development, and other land

181,427 5.1% 144,128 4.1% 110,092 4.8%
Commercial and industrial 900,709 25.2% 803,508 22.9% 470,689 20.6%
Installment and other 11,082 0.3% 11,718 0.3% 3,645 0.2%
Leasing financing receivables � 160,607 � 4.5% � 159,901 � 4.6% � 151,468 � 6.7%
Total originated loans and leases $ 2,487,534 69.7% $ 2,237,798 63.8% $ 1,618,734 71.0%
Acquired impaired loans
Commercial real estate $ 141,199 4.0% $ 146,808 4.2% $ 157,956 7.0%
Residential real estate 106,764 3.0% 113,934 3.3% 139,858 6.1%

Construction, land development, and other land

3,111 0.1% 3,779 0.1% 5,156 0.2%
Commercial and industrial 11,963 0.3% 12,617 0.4% 8,055 0.4%
Installment and other � 374 � 0.0% � 404 � 0.0% � 449 � 0.0%
Total acquired impaired loans $ 263,411 7.4% $ 277,542 8.0% $ 311,474 13.7%
Acquired non-impaired loans and leases
Commercial real estate $ 382,252 10.7% $ 462,565 13.2% $ 197,589 8.7%
Residential real estate 97,395 2.8% 124,659 3.6% 30,785 1.3%

Construction, land development, and other land

29,121 0.8% 37,442 1.1% 1,822 0.1%
Commercial and industrial 277,146 7.8% 328,672 9.4% 89,985 3.9%
Installment and other 1,346 0.0% 1,596 0.0% 36 0.0%
Leasing financing receivables � 29,361 � 0.8% � 31,352 � 0.9% � 29,993 � 1.3%

Total acquired non-impaired loans and leases

$ 816,621 � 22.9% $ 986,286 � 28.2% $ 350,210 � 15.3%
Total loans and leases $ 3,567,566 100.0% $ 3,501,626 100.0% $ 2,280,418 100.0%
Allowance for loan and lease losses � (27,106 ) � (25,201 ) � (17,640 )

Total loans and leases, net of allowance for loan and lease losses

$ 3,540,460 � $ 3,476,425 � $ 2,262,778 �

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:

� March 31, � December 31, � September 30, � June 30, � March 31,
(dollars in thousands) � 2019 � � 2018 � � 2018 � � 2018 � � 2018 �
Non-performing assets:
Non-accrual loans and leases $ 28,539 $ 25,834 $ 28,643 $ 25,742 $ 23,626

Past due loans and leases 90 days or more and still accruing interest

— — 291 197 —
Accruing troubled debt restructured loans � 1,921 � � 1,813 � � 1,230 � � 1,238 � � 1,037 �
Total non-performing loans and leases 30,460 27,647 30,164 27,177 24,663
Other real estate owned � 4,799 � � 5,314 � � 4,891 � � 6,402 � � 10,466 �
Total non-performing assets $ 35,259 � $ 32,961 � $ 35,055 � $ 33,579 � $ 35,129 �

Total non-performing loans and leases as a percentage of total loans and leases

0.85 % 0.79 % 0.87 % 0.81 % 1.08 %

Total non-performing assets as a percentage of total assets

0.70 % 0.67 % 0.71 % 0.70 % 1.01 %

Allowance for loan and lease losses as a percentage of non-performing loans and leases

88.99 % 91.15 % 77.65 % 72.44 % 71.53 %
�

Non-performing assets guaranteed by U.S. government:

Non-accrual loans guaranteed $ 5,070 $ 4,245 $ 6,830 $ 6,810 $ 6,266

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 guaranteed 5,070 4,626 7,261 6,962 6,266
Other real estate owned guaranteed � — � � — � � — � � 298 � � 482 �
Total non-performing assets guaranteed $ 5,070 � $ 4,626 � $ 7,261 � $ 7,260 � $ 6,748 �

Total non-performing loans and leases not guaranteed as a percentage of total loans and leases

0.71 % 0.66 % 0.66 % 0.60 % 0.81 %

Total non-performing assets not guaranteed as a percentage of total assets

0.60 % 0.57 % 0.57 % 0.55 % 0.82 %

Variances in non-performing assets:

Non-performing assets included $5.1 million of U.S. government guaranteed balances at March�31, 2019 and $4.6 million at December 31, 2018, an increase of $444,000 primarily due to additional non-accrual loans.

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
March 31, � December 31, � September 30, � June 30, � March 31,
(dollars in thousands) � 2019 � � 2018 � � 2018 � � 2018 � � 2018 �

Allowance for loan and lease losses, beginning of period

$ 25,201 $ 23,424 $ 19,687 $ 17,640 $ 16,706
Provision for loan and lease losses 3,999 3,882 5,842 3,956 5,115

Net charge-offs of loans and leases

� (2,094 ) � (2,105 ) � (2,105 ) � (1,909 ) � (4,181 )

Allowance for loan and lease losses, end of period

$ 27,106 � $ 25,201 � $ 23,424 � $ 19,687 � $ 17,640 �
�

Allowance for loan and lease losses to period end total loans and leases held for investment

0.76 % 0.72 % 0.68 % 0.59 % 0.77 %

Net charge-offs (annualized) to average loans and leases outstanding during the period

0.24 % 0.24 % 0.25 % 0.29 % 0.75 %

Provision for loan and lease losses to net charge-offs during the period

1.91x

1.84x

2.77x

2.07x

1.22x

The allowance for loan and lease losses as a percentage of total loans and leases held for investment decreased from 0.77% at March 31, 2018, and increased from 0.72% at December 31, 2018, compared to 0.76% at March�31, 2019.

Net Charge-Offs

Net charge-offs during the first quarter of 2019 were $2.1 million, or 0.24% of average loans and leases, on an annualized basis, consistent with $2.1 million, or 0.24% of average loans and leases, during the fourth quarter of 2018, and a decrease from $4.2 million, or 0.75%, for the comparable quarter one year ago. This decrease was primarily due to a charge-off related to one commercial loan relationship.

Net charge-offs for the first quarter of 2019 included $1.7 million in the unguaranteed portion of U.S. government guaranteed loans while net charge-offs for the fourth quarter of 2018 included $1.8 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:

� March 31, � December 31, � September 30, � June 30, � March 31,
(dollars in thousands) 2019 2018 2018 2018 2018
Non-interest-bearing demand deposits $ 1,163,255 $ 1,192,873 $ 1,175,222 $ 1,193,057 $ 749,892
Interest-bearing checking accounts 305,393 296,339 317,145 287,330 196,802
Money market demand accounts 611,634 640,401 661,271 617,108 382,282
Other savings 468,524 476,418 476,879 487,130 439,277
Time deposits (below $250,000) 967,999 911,603 916,014 879,643 665,541
Time deposits ($250,000 and above) � 291,711 � 232,282 � 194,236 � 180,609 � 90,753
Total deposits $ 3,808,516 $ 3,749,916 $ 3,740,767 $ 3,644,877 $ 2,524,547

Total deposits were $3.8 billion at March�31, 2019, an increase of $58.6 million compared to December 31, 2018, primarily due to time deposit promotions. Non-interest-bearing deposits to total deposits decreased slightly from 31.8% at December 31, 2018 to 30.5% at March�31, 2019.

The increase in the current quarter was primarily due to:

Partially offset by:

Total borrowings and other liabilities were $532.7 million at March�31, 2019, a decrease of $9.3 million from $542.0 million at December 31, 2018, primarily due to a decrease in accrued expenses and other liabilities.

Stockholders’ Equity

Total stockholders’ equity was $668.7 million at March�31, 2019, an increase of $18.1 million from $650.7 million at December 31, 2018, primarily due to net income generated during the quarter. Stockholders’ equity increased $205.8 million from $462.9 million at March 31, 2018, 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 March�31, 2019:

� Actual �

Minimum Capital

Required

�

Required to be

Considered

Well Capitalized

March 31, 2019 Amount � Ratio Amount � Ratio Amount � Ratio
Total capital to risk weighted assets:
Company $ 569,432 14.28% $ 319,059 8.00% N/A N/A
Bank 540,451 13.55% 319,041 8.00% $ 398,801 10.00 %
Tier 1 capital to risk weighted assets:
Company $ 541,242 13.57% $ 239,294 6.00% N/A N/A
Bank 512,261 12.85% 239,281 6.00% $ 319,041 8.00 %

Common Equity Tier 1 (CET1) to risk weighted assets:

Company $ 484,304 12.14% $ 179,471 4.50% N/A N/A
Bank 512,261 12.85% 179,460 4.50% $ 259,221 6.50 %
Tier 1 capital to average assets:
Company $ 541,242 11.27% $ 192,060 4.00% N/A N/A
Bank 512,261 10.67% 192,071 4.00% $ 240,089 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, April 26, 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 May 10, 2019 by dialing (877) 344-7529; passcode: 10130060.

A slide presentation relating to the first quarter 2019 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 $5.0 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 common 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. 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. 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, cost savings, and other financial benefits of the proposed transaction might not be realized within the expected timeframes or might be less than projected; 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)

�
� March 31, � December 31, � September 30, � June 30, � March 31,
(dollars in thousands) � 2019 � � 2018 � � 2018 � � 2018 � � 2018 �
ASSETS
Cash and due from banks $ 50,026 $ 30,190 $ 25,162 $ 25,299 $ 17,396
Interest bearing deposits with other banks � 31,971 � � 91,670 � � 119,594 � � 127,417 � � 110,645 �
Cash and cash equivalents 81,997 121,860 144,756 152,716 128,041
Equity and other securities, at fair value 7,216 — — — —
Securities available-for-sale, at fair value 964,553 817,656 795,408 757,825 626,057
Securities held-to-maturity, at amortized cost 4,425 99,266 102,683 106,613 112,266
Restricted stock, at cost 19,202 19,202 19,202 18,977 17,177
Loans held for sale 510 19,827 8,737 5,822 8,219
Loans and leases:
Loans and leases 3,567,566 3,501,626 3,455,802 3,348,692 2,280,418
Allowance for loan and lease losses � (27,106 ) � (25,201 ) � (23,424 ) � (19,687 ) � (17,640 )
Net loans and leases 3,540,460 3,476,425 3,432,378 3,329,005 2,262,778
Servicing assets, at fair value 19,534 19,693 20,674 21,587 21,615
Accrued interest receivable 11,974 10,863 11,331 10,670 6,971
Premises and equipment, net 97,069 97,680 106,948 107,300 94,014
Assets held for sale 13,596 14,489 8,343 11,428 9,030
Other real estate owned, net 4,799 5,314 4,891 6,402 10,466
Goodwill 128,177 128,177 127,536 127,536 54,562
Other intangible assets, net 31,646 33,419 35,248 37,139 15,991
Bank-owned life insurance 6,087 5,961 5,923 5,886 5,838
Deferred tax assets, net 30,534 35,643 42,287 48,936 47,371
Due from counterparty 20,691 5,338 14,484 25,569 19,987
Other assets � 27,455 � � 31,761 � � 36,580 � � 31,869 � � 21,989 �
Total assets $ 5,009,925 � $ 4,942,574 � $ 4,917,409 � $ 4,805,280 � $ 3,462,372 �
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Non-interest-bearing demand deposits $ 1,163,255 $ 1,192,873 $ 1,175,222 $ 1,193,057 $ 749,892
Interest-bearing deposits:

NOW, savings accounts, and money market accounts

1,385,551 1,413,158 1,455,295 1,391,568 1,018,361
Time deposits � 1,259,710 � � 1,143,885 � � 1,110,250 � � 1,060,252 � � 756,294 �
Total deposits 3,808,516 3,749,916 3,740,767 3,644,877 2,524,547
Accrued interest payable 4,390 3,484 2,971 2,562 1,612
Line of credit — — — — —
Federal Home Loan Bank advances 425,000 425,000 425,000 420,000 380,000

Securities sold under agreements to repurchase

34,369 34,166 24,446 24,653 27,815

Junior subordinated debentures issued to capital trusts, net

36,912 36,768 36,615 36,452 27,800
Accrued expenses and other liabilities � 31,989 � � 42,568 � � 57,749 � � 60,330 � � 37,662 �
Total liabilities 4,341,176 4,291,902 4,287,548 4,188,874 2,999,436
STOCKHOLDERS’ EQUITY
Preferred stock 10,438 10,438 10,438 10,438 10,438
Common stock 362 361 361 360 293
Additional paid-in capital 548,005 546,849 545,827 544,686 392,932
Retained earnings 116,363 102,522 85,597 71,257 68,687

Accumulated other comprehensive loss, net of tax

� (6,419 ) � (9,498 ) � (12,362 ) � (10,335 ) � (9,414 )
Total stockholders’ equity � 668,749 � � 650,672 � � 629,861 � � 616,406 � � 462,936 �

Total liabilities and stockholders’ equity

$ 5,009,925 � $ 4,942,574 � $ 4,917,409 � $ 4,805,280 � $ 3,462,372 �
�

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

�
� Three Months Ended

(dollars in thousands, except share and per share data)

March 31,

2019

�

December 31,

2018

�

September 30,

2018

�

June 30,

2018

�

March 31,

2018

INTEREST AND DIVIDEND INCOME
Interest and fees on loans and leases $ 54,383 $ 56,646 $ 55,045 $ 39,627 $ 33,654
Interest on taxable securities 5,759 5,334 5,076 4,572 4,055
Interest on tax-exempt securities 343 355 337 229 174
Other interest and dividend income � 625 � � 560 � � 615 � � 413 � � 259 �
Total interest and dividend income 61,110 62,895 61,073 44,841 38,142
INTEREST EXPENSE
Deposits 8,076 7,115 5,971 3,745 2,498
Federal Home Loan Bank advances 2,099 1,719 1,723 1,360 1,358

Subordinated debentures and other borrowings

� 850 � � 800 � � 786 � � 680 � � 591 �
Total interest expense � 11,025 � � 9,634 � � 8,480 � � 5,785 � � 4,447 �
Net interest income 50,085 53,261 52,593 39,056 33,695
PROVISION FOR LOAN AND LEASE LOSSES � 3,999 � � 3,882 � � 5,842 � � 3,956 � � 5,115 �

Net interest income after provision for loan and lease losses

46,086 49,379 46,751 35,100 28,580
NON-INTEREST INCOME
Fees and service charges on deposits 1,770 1,852 1,825 1,456 1,312
Loan servicing revenue 2,539 2,667 2,622 2,533 2,450
Loan servicing asset revaluation (1,261 ) (2,862 ) (2,446 ) (2,074 ) (1,887 )
ATM and interchange fees 717 1,010 1,540 850 913

Net gains on sales of securities available-for-sale

— 160 — 4 —
Change in fair value of equity securities, net 499 — — — —
Net gains on sales of loans 6,233 9,337 5,015 9,723 7,476
Wealth management and trust income 595 679 674 192 —
Other non-interest income � 896 � � 1,447 � � 1,672 � � 1,527 � � 859 �
Total non-interest income 11,988 14,290 10,902 14,211 11,123
NON-INTEREST EXPENSE
Salaries and employee benefits 22,892 21,548 21,312 19,244 18,278
Occupancy expense, net 4,280 4,027 3,548 4,499 3,755
Equipment expense 669 641 617 558 603
Loan and lease related expenses 1,577 2,223 1,015 1,471 1,400
Legal, audit and other professional fees 2,066 2,746 2,358 4,418 1,851
Data processing 3,273 2,846 2,724 10,371 2,301

Net loss (gain) recognized on other real estate owned and other related expenses

196 48 (284 ) 472 (1 )
Regulatory assessments (59 ) 462 675 366 241
Other intangible assets amortization expense 1,773 1,834 1,898 1,130 767
Advertising and promotions 709 590 537 347 249
Telecommunications 464 391 435 466 418
Other non-interest expense � 2,839 � � 2,732 � � 2,880 � � 2,137 � � 1,752 �
Total non-interest expense � 40,679 � � 40,088 � � 37,715 � � 45,479 � � 31,614 �
INCOME BEFORE PROVISION FOR INCOME TAXES 17,395 23,581 19,938 3,832 8,089
PROVISION FOR INCOME TAXES � 4,798 � � 6,460 � � 5,402 � � 1,064 � � 1,321 �
NET INCOME 12,597 17,121 14,536 2,768 6,768
Dividends on preferred shares � 196 � � 196 � � 196 � � 198 � � 193 �
INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 12,401 � $ 16,925 � $ 14,340 � $ 2,570 � $ 6,575 �
EARNINGS PER COMMON SHARE
Basic $ 0.34 $ 0.47 $ 0.40 $ 0.08 $ 0.22
Diluted $ 0.34 $ 0.46 $ 0.39 $ 0.08 $ 0.22
�

BYLINE BANCORP, INC. AND SUBSIDIARIES

SELECTED FINANCIAL DATA (unaudited)

�
� As of or For the Three Months Ended

(dollars in thousands, except share and per share data)

March 31,

2019

�

December 31,

2018

�

September 30,

2018

�

June 30,

2018

�

March 31,

2018

Summary of Operations
Net interest income $ 50,085 $ 53,261 $ 52,593 $ 39,056 $ 33,695
Provision for loan and lease losses 3,999 3,882 5,842 3,956 5,115
Non-interest income 11,988 14,290 10,902 14,211 11,123
Non-interest expense � 40,679 � � 40,088 � � 37,715 � � 45,479 � � 31,614 �
Income before provision for income taxes 17,395 23,581 19,938 3,832 8,089
Provision for income taxes � 4,798 � � 6,460 � � 5,402 � � 1,064 � � 1,321 �
Net income 12,597 17,121 14,536 2,768 6,768
Dividends on preferred shares � 196 � � 196 � � 196 � � 198 � � 193 �
Net income available to common stockholders $ 12,401 � $ 16,925 � $ 14,340 � $ 2,570 � $ 6,575 �
�
Earnings per Common Share
Basic earnings per common share $ 0.34 $ 0.47 $ 0.40 $ 0.08 $ 0.22
Diluted earnings per common share $ 0.34 $ 0.46 $ 0.39 $ 0.08 $ 0.22
Adjusted diluted earnings per common share(2)(3)(4) $ 0.38 $ 0.49 $ 0.40 $ 0.32 $ 0.21
Weighted average common shares outstanding (basic) 36,169,477 36,116,189 36,042,914 31,614,973 29,291,179
Weighted average common shares outstanding (diluted) 36,876,574 36,398,144 36,958,209 32,568,396 29,913,633
Common shares outstanding 36,398,144 36,343,239 36,279,600 36,218,955 29,404,048
�
Key Ratios and Performance Metrics (annualized where applicable)
Net interest margin 4.43 % 4.69 % 4.73 % 4.43 % 4.45 %
Cost of deposits 0.87 % 0.75 % 0.64 % 0.52 % 0.41 %
Efficiency ratio(1) 62.68 % 56.63 % 56.41 % 83.26 % 68.83 %
Adjusted efficiency ratio(1)(2)(3) 59.55 % 54.76 % 55.62 % 63.28 % 68.55 %
Non-interest expense to average assets 3.32 % 3.25 % 3.11 % 4.72 % 3.81 %
Adjusted non-interest expense to average assets(2)(3) 3.17 % 3.15 % 3.07 % 3.62 % 3.80 %
Return on average stockholders' equity 7.75 % 10.61 % 9.22 % 2.14 % 5.97 %
Adjusted return on average stockholders' equity(2)(3)(4) 8.61 % 11.21 % 9.47 % 8.18 % 5.41 %
Return on average assets 1.03 % 1.39 % 1.20 % 0.29 % 0.82 %
Adjusted return on average assets(2)(3)(4) 1.14 % 1.47 % 1.23 % 1.10 % 0.74 %
Non-interest income to total revenues(2) 19.31 % 21.16 % 17.17 % 26.68 % 24.82 %
Pre-tax pre-provision return on average assets(2) 1.75 % 2.23 % 2.13 % 0.81 % 1.59 %
Adjusted pre-tax pre-provision return on average assets(2)(3) 1.91 % 2.33 % 2.17 % 1.91 % 1.61 %
Return on average tangible common stockholders' equity(2) 11.37 % 15.49 % 13.81 % 3.34 % 7.65 %
Adjusted return on average tangible common stockholders' equity(2)(3)(4) 12.54 % 16.31 % 14.16 % 11.05 % 6.96 %
Non-interest-bearing deposits to total deposits 30.54 % 31.81 % 31.42 % 32.73 % 29.70 %

Loans and leases held for sale and loans and lease held for investment to total deposits

93.69 % 93.91 % 92.62 % 92.03 % 90.66 %
Deposits to total liabilities 87.73 % 87.37 % 87.25 % 87.01 % 84.17 %
Deposits per branch $ 65,664 $ 63,558 $ 63,403 $ 61,778 $ 45,081
Tangible book value per common share(2) $ 13.70 $ 13.17 $ 12.59 $ 12.18 $ 12.99
�
Asset Quality Ratios

Non-performing loans and leases to total loans and leases held for investment, net before ALLL

0.85 % 0.79 % 0.87 % 0.81 % 1.08 %
ALLL to total loans and leases held for investment, net before ALLL 0.76 % 0.72 % 0.68 % 0.59 % 0.77 %

Net charge-offs to average total loans and leases held for investment, net before ALLL

0.24 % 0.24 % 0.25 % 0.29 % 0.75 %
Acquisition accounting adjustments(5) $ 29,341 $ 34,029 $ 42,375 $ 52,090 $ 28,058
�
Capital Ratios
Common equity to total assets 13.14 % 12.95 % 12.60 % 12.61 % 13.07 %
Tangible common equity to tangible assets(2) 10.28 % 10.01 % 9.60 % 9.51 % 11.26 %
Leverage ratio 11.27 % 11.05 % 10.78 % 10.57 % 12.14 %
Common equity tier 1 capital ratio 12.14 % 11.85 % 11.26 % 10.88 % 13.49 %
Tier 1 capital ratio 13.57 % 13.30 % 12.71 % 12.36 % 15.30 %
Total capital ratio 14.28 % 13.99 % 13.37 % 12.92 % 16.05 %
� � (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 March 31,
2019 � 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 $ 66,765 $ 301 1.83% $ 38,490 $ 80 0.85%
Loans and leases(1) 3,533,973 54,383 6.24% 2,275,274 33,654 6.00%
Taxable securities 926,129 6,083 2.66% 730,713 4,234 2.35%
Tax-exempt securities(2) � 55,198 � � 343 2.52% � 27,480 � � 174 2.57%
Total interest-earning assets $ 4,582,065 � $ 61,110 5.41% $ 3,071,957 � $ 38,142 5.04%
Allowance for loan and lease losses (25,354 ) (17,360 )
All other assets � 406,995 � � 307,474 �
TOTAL ASSETS $ 4,963,706 � $ 3,362,071 �

LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits
Interest checking $ 293,049 $ 413 0.57% $ 186,686 $ 38 0.08%
Money market accounts 613,001 1,460 0.97% 345,545 370 0.43%
Savings 471,206 138 0.12% 436,935 76 0.07%
Time deposits � 1,195,417 � � 6,065 2.06% � 733,753 � � 2,014 1.11%

Total interest-bearing deposits

2,572,673 8,076 1.27% 1,702,919 2,498 0.59%
Federal Home Loan Bank advances 433,372 2,099 1.96% 363,540 1,358 1.52%
Other borrowed funds � 71,280 � � 850 4.84% � 56,471 � � 591 4.25%
Total borrowings � 504,652 � � 2,949 2.37% � 420,011 � � 1,949 1.88%
Total interest-bearing liabilities $ 3,077,325 $ 11,025 1.45% $ 2,122,930 $ 4,447 0.85%
Non-interest-bearing demand deposits 1,185,981 743,827
Other liabilities 41,244 35,779
Total stockholders’ equity � 659,156 � � 459,535 �

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 4,963,706 � $ 3,362,071 �
Net interest spread(3) 3.96% 4.19%
Net interest income $ 50,085 $ 33,695
Net interest margin(4) 4.43% 4.45%
�
Net loan accretion impact on margin $ 5,201 0.46% $ 2,336 0.31%

Net interest margin excluding loan accretion(6)

3.97% 4.14%
� � (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

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)

�
� As of or For the Three Months Ended
(dollars in thousands, except per share data) March 31,

2019

� December 31,

2018

� September 30,

2018

� June 30,

2018

� March 31,

2018

Net income and earnings per share excluding significant items

Reported Net Income $ 12,597 $ 17,121 $ 14,536 $ 2,768 $ 6,768
Significant items:

Incremental income tax (benefit) attributed to federal income tax reform

— — — — (724 )
Impairment charges on assets held for sale 392 372 139 117 —
Merger-related expense 18 266 150 1,517 123
Core system conversion expense 1,530 625 213 9,009 —

Tax benefit on impairment charges and merger-related expenses

� (540 ) � (297 ) � (112 ) � (2,832 ) � (34 )
Adjusted Net Income $ 13,997 � $ 18,087 � $ 14,926 � $ 10,579 � $ 6,133 �
Reported Diluted Earnings per Share $ 0.34 $ 0.46 $ 0.39 $ 0.08 $ 0.22
Significant items:

Incremental income tax (benefit) attributed to federal income tax reform

— — — — (0.02 )
Impairment charges on assets held for sale 0.01 0.01 — — —
Merger-related expense — 0.01 — 0.05 0.01
Core system conversion expense 0.04 0.02 0.01 0.28 —

Tax benefit on impairment charges and merger-related expenses

� (0.01 ) � (0.01 ) � — � � (0.09 ) � — �
Adjusted Diluted Earnings per Share $ 0.38 � $ 0.49 � $ 0.40 � $ 0.32 � $ 0.21 �
�

BYLINE BANCORP, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited)

�
� As of or For the Three Months Ended

(dollars in thousands, except per share data, ratios annualized, where applicable)

March 31,

2019

� December 31,

2018

� September 30,

2018

� June 30,

2018

� March 31,

2018

Adjusted non-interest expense:
Non-interest expense $ 40,679 $ 40,088 $ 37,715 $ 45,479 $ 31,614
Less: Significant items
Impairment charges on assets held for sale 392 372 139 117 —
Merger-related expense 18 266 150 1,517 123
Core system conversion expense � 1,530 � � 625 � � 213 � � 9,009 � � — �
Adjusted non-interest expense $ 38,739 � $ 38,825 � $ 37,213 � $ 34,836 � $ 31,491 �

Adjusted non-interest expense excluding amortization of intangible assets:

Adjusted non-interest expense $ 38,739 $ 38,825 $ 37,213 $ 34,836 $ 31,491
Less: Amortization of intangible assets � 1,773 � � 1,834 � � 1,898 � � 1,130 � � 767 �

Adjusted non-interest expense excluding amortization of intangible assets

$ 36,966 � $ 36,991 � $ 35,315 � $ 33,706 � $ 30,724 �
Pre-tax pre-provision net income:
Pre-tax income $ 17,395 $ 23,581 $ 19,938 $ 3,832 $ 8,089
Add: Provision for loan and lease losses � 3,999 � � 3,882 � � 5,842 � � 3,956 � � 5,115 �
Pre-tax pre-provision net income $ 21,394 � $ 27,463 � $ 25,780 � $ 7,788 � $ 13,204 �
Adjusted pre-tax pre-provision net income:
Pre-tax pre-provision net income $ 21,394 $ 27,463 $ 25,780 $ 7,788 $ 13,204
Impairment charges on assets held for sale 392 372 139 117 —
Merger-related expense 18 266 150 1,517 123
Core system conversion expense � 1,530 � � 625 � � 213 � � 9,009 � � — �
Adjusted pre-tax pre-provision net income $ 23,334 � $ 28,726 � $ 26,282 � $ 18,431 � $ 13,327 �
Total revenues:
Net interest income $ 50,085 $ 53,261 $ 52,593 $ 39,056 $ 33,695
Add: Non-interest income � 11,988 � � 14,290 � � 10,902 � � 14,211 � � 11,123 �
Total revenues $ 62,073 � $ 67,551 � $ 63,495 � $ 53,267 � $ 44,818 �
Tangible common stockholders' equity:
Total stockholders' equity $ 668,749 $ 650,672 $ 629,861 $ 616,406 $ 462,936
Less: Preferred stock 10,438 10,438 10,438 10,438 10,438
Less: Goodwill 128,177 128,177 127,536 127,536 54,562
Less: Core deposit intangibles and other intangibles � 31,646 � � 33,419 � � 35,248 � � 37,139 � � 15,991 �
Tangible common stockholders' equity $ 498,488 � $ 478,638 � $ 456,639 � $ 441,293 � $ 381,945 �
Tangible assets:
Total assets $ 5,009,925 $ 4,942,574 $ 4,917,409 $ 4,805,280 $ 3,462,372
Less: Goodwill 128,177 128,177 127,536 127,536 54,562
Less: Core deposit intangibles and other intangibles � 31,646 � � 33,419 � � 35,248 � � 37,139 � � 15,991 �
Tangible assets $ 4,850,102 � $ 4,780,978 � $ 4,754,625 � $ 4,640,605 � $ 3,391,819 �
Average tangible common stockholders' equity:
Average total stockholders' equity $ 659,156 $ 639,885 $ 625,621 $ 518,547 $ 459,535
Less: Average preferred stock 10,438 10,438 10,438 10,438 10,438
Less: Average goodwill 128,177 127,543 127,536 78,619 54,562
Less: Average core deposit intangibles and other intangibles � 32,747 � � 34,564 � � 36,444 � � 22,998 � � 16,417 �
Average tangible common stockholders' equity $ 487,794 � $ 467,340 � $ 451,203 � $ 406,492 � $ 378,118 �
Average tangible assets:
Average total assets $ 4,963,706 $ 4,896,434 $ 4,809,939 $ 3,863,184 $ 3,362,071
Less: Average goodwill 128,177 127,543 127,536 78,619 54,562
Less: Average core deposit intangibles and other intangibles � 32,747 � � 34,564 � � 36,444 � � 22,998 � � 16,417 �
Average tangible assets $ 4,802,782 � $ 4,734,327 � $ 4,645,959 � $ 3,761,567 � $ 3,291,092 �
Tangible net income available to common stockholders:
Net income available to common stockholders $ 12,401 $ 16,925 $ 14,340 $ 2,570 $ 6,575
Add: After-tax intangible asset amortization � 1,279 � � 1,323 � � 1,369 � � 816 � � 553 �
Tangible net income available to common stockholders $ 13,680 � $ 18,248 � $ 15,709 � $ 3,386 � $ 7,128 �

Adjusted Tangible net income available to common stockholders:

Tangible net income available to common stockholders $ 13,680 $ 18,248 $ 15,709 $ 3,386 $ 7,128

Incremental income tax (benefit) attributed to federal income tax reform

— — — — (724 )
Impairment charges on assets held for sale 392 372 139 117 —
Merger-related expense 18 266 150 1,517 123
Core system conversion expense 1,530 625 213 9,009 —
Tax benefit on significant items � (540 ) � (297 ) � (112 ) � (2,832 ) � (34 )

Adjusted tangible net income available to common stockholders

$ 15,080 � $ 19,214 � $ 16,099 � $ 11,197 � $ 6,493 �
�

BYLINE BANCORP, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited)

�
� As of or For the Three Months Ended

(dollars in thousands, except share and per share data, ratios annualized, where applicable)

March 31,

2019

� December 31,

2018

� September 30,

2018

� June 30,

2018

� March 31,

2018

Net interest margin:
Reported net interest margin 4.43 % 4.69 % 4.73 % 4.43 % 4.45 %
Effect of accretion income on acquired loans � (0.46 )% � (0.56 )% � (0.74 )% � (0.41 )% � (0.31 )%
Net interest margin excluding accretion � 3.97 % � 4.13 % � 3.99 % � 4.02 % � 4.14 %
Pre-tax pre-provision return on average assets:
Pre-tax pre-provision net income $ 21,394 $ 27,463 $ 25,780 $ 7,788 $ 13,204
Average total assets 4,963,706 4,896,434 4,809,939 3,863,184 3,362,071
Pre-tax pre-provision return on average assets 1.75 % 2.23 % 2.13 % 0.81 % 1.59 %
Adjusted pre-tax pre-provision return on average assets:
Adjusted pre-tax pre-provision net income $ 23,334 $ 28,726 $ 26,282 $ 18,431 $ 13,327
Average total assets 4,963,706 4,896,434 4,809,939 3,863,184 3,362,071
Adjusted pre-tax pre-provision return on average assets 1.91 % 2.33 % 2.17 % 1.91 % 1.61 %
Non-interest income to total revenues:
Non-interest income $ 11,988 $ 14,290 $ 10,902 $ 14,211 $ 11,123
Total revenues 62,073 67,551 63,495 53,267 44,818
Non-interest income to total revenues 19.31 % 21.16 % 17.17 % 26.68 % 24.82 %
Adjusted non-interest expense to average assets:
Adjusted non-interest expense $ 38,739 $ 38,825 $ 37,213 $ 34,836 $ 31,491
Average total assets 4,963,706 4,896,434 4,809,939 3,863,184 3,362,071
Adjusted non-interest expense to average assets 3.17 % 3.15 % 3.07 % 3.62 % 3.80 %
Adjusted efficiency ratio:

Adjusted non-interest expense excluding amortization of intangible assets

$ 36,966 $ 36,991 $ 35,315 $ 33,706 $ 30,724
Total revenues 62,073 67,551 63,495 53,267 44,818
Adjusted efficiency ratio 59.55 % 54.76 % 55.62 % 63.28 % 68.55 %
Adjusted return on average assets:
Adjusted net income $ 13,997 $ 18,087 $ 14,926 $ 10,579 $ 6,133
Average total assets 4,963,706 4,896,434 4,809,939 3,863,184 3,362,071
Adjusted return on average assets 1.14 % 1.47 % 1.23 % 1.10 % 0.74 %
Adjusted return on average stockholders' equity:
Adjusted net income $ 13,997 $ 18,087 $ 14,926 $ 10,579 $ 6,133
Average stockholders' equity 659,156 639,885 625,621 518,547 459,535
Adjusted return on average stockholders' equity 8.61 % 11.21 % 9.47 % 8.18 % 5.41 %
Tangible common equity to tangible assets:
Tangible common equity $ 498,488 $ 478,638 $ 456,639 $ 441,293 $ 381,945
Tangible assets 4,850,102 4,780,978 4,754,625 4,640,605 3,391,819
Tangible common equity to tangible assets 10.28 % 10.01 % 9.60 % 9.51 % 11.26 %
Return on average tangible common stockholders' equity:
Tangible net income available to common stockholders $ 13,680 $ 18,248 $ 15,709 $ 3,386 $ 7,128
Average tangible common stockholders' equity 487,794 467,340 451,203 406,492 378,118

Return on average tangible common stockholders' equity

11.37 % 15.49 % 13.81 % 3.34 % 7.65 %

Adjusted return on average tangible common stockholders' equity:

Adjusted tangible net income available to common stockholders $ 15,080 $ 19,214 $ 16,099 $ 11,197 $ 6,493
Average tangible common stockholders' equity 487,794 467,340 451,203 406,492 378,118

Adjusted return on average tangible common stockholders' equity

12.54 % 16.31 % 14.16 % 11.05 % 6.96 %
Tangible book value per share:
Tangible common equity $ 498,488 $ 478,638 $ 456,639 $ 441,293 $ 381,945
Common shares outstanding 36,398,144 36,343,239 36,279,600 36,218,955 29,404,048
Tangible book value per share $ 13.70 $ 13.17 $ 12.59 $ 12.18 $ 12.99

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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