UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______to ______

Commission File Number 001-38139

Byline Bancorp, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	36-3012593
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification Number)

180 North LaSalle Street, Suite 300

Chicago, Illinois 60601

(Address of Principal Executive Offices)

(773) 244-7000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock	BY	New York Stock Exchange

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Common Stock, $0.01 par value, 44,385,204 shares outstanding as of October 30, 2024

BYLINE BANCORP, INC.

FORM 10-Q

September 30, 2024

INDEX

		Page
PART I.	FINANCIAL INFORMATION	3
Item 1.	Financial Statements. The Unaudited Interim Condensed Consolidated Financial Statements of Byline Bancorp, Inc.	3
	Notes to Unaudited Interim Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	47
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	80
Item 4.	Controls and Procedures	81
PART II.	OTHER INFORMATION	82
Item 1.	Legal Proceedings	82
Item 1A.	Risk Factors	82
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	82
Item 3.	Defaults Upon Senior Securities	82
Item 4.	Mine Safety Disclosures	82
Item 5.	Other Information	82
Item 6.	Exhibits	83

2

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)

(dollars in thousands, except share data)	September 30, 2024			December 31, 2023
ASSETS
Cash and due from banks	$	77,047		$	60,431
Interest bearing deposits with other banks		375,549			165,705
Cash and cash equivalents		452,596			226,136
Equity and other securities, at fair value		9,132			8,743
Securities available-for-sale, at fair value (amortized cost    at September 30, 2024—$1,635,419; December 31, 2023—$1,516,801)		1,502,108			1,342,480
Securities held-to-maturity, at amortized cost (fair value    at September 30, 2024—$603; December 31, 2023 —$1,149)		605			1,157
Restricted stock, at cost		22,743			16,304
Loans held for sale		19,955			18,005
Loans and leases:
Loans and leases		6,879,446			6,684,306
Allowance for credit losses - loans and leases		(98,860	)		(101,686	)
Net loans and leases		6,780,586			6,582,620
Servicing assets, at fair value		18,945			19,844
Premises and equipment, net		63,135			66,627
Goodwill and other intangible assets, net		199,443			203,478
Bank-owned life insurance		99,295			96,900
Deferred tax assets, net		37,737			50,058
Accrued interest receivable and other assets		218,036			249,615
Total assets	$	9,424,316		$	8,881,967
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Non-interest-bearing demand deposits	$	1,729,908		$	1,905,876
Interest-bearing deposits		5,767,979			5,271,123
Total deposits		7,497,887			7,176,999
Other borrowings		518,786			395,190
Subordinated notes, net		73,997			73,866
Junior subordinated debentures issued to capital trusts, net		70,783			70,452
Accrued interest payable and other liabilities		166,551			175,309
Total liabilities		8,328,004			7,891,816
COMMITMENTS AND CONTINGENT LIABILITIES (Note 14)
STOCKHOLDERS’ EQUITY
Preferred stock		—			—
Common stock		454			451
Additional paid-in capital		714,864			710,488
Retained earnings		507,576			429,036
Treasury stock, at cost		(47,904	)		(49,707	)
Accumulated other comprehensive loss, net of tax		(78,678	)		(100,117	)
Total stockholders’ equity		1,096,312			990,151
Total liabilities and stockholders’ equity	$	9,424,316		$	8,881,967

	September 30, 2024				December 31, 2023
	Preferred Shares		Common Shares		Preferred Shares		Common Shares
Par value	$	0.01	$	0.01	$	0.01	$	0.01
Shares authorized		25,000,000		150,000,000		25,000,000		150,000,000
Shares issued		—		46,180,735		—		45,714,241
Shares outstanding		—		44,384,706		—		43,764,056
Treasury shares		—		1,796,029		—		1,950,185

See accompanying Notes to Unaudited Interim Condensed Consolidated Financial Statements.

3

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(dollars in thousands, except share and per share data)	2024			2023			2024			2023
INTEREST AND DIVIDEND INCOME
Interest and fees on loans and leases	$	128,336		$	125,465		$	378,651		$	316,942
Interest on securities		11,260			8,415			31,508			21,574
Other interest and dividend income		6,840			2,710			16,167			5,348
Total interest and dividend income		146,436			136,590			426,326			343,864
INTEREST EXPENSE
Deposits		52,076			37,163			145,641			78,184
Other borrowings		3,919			3,981			12,203			14,110
Subordinated notes and debentures		2,986			2,994			8,960			7,234
Total interest expense		58,981			44,138			166,804			99,528
Net interest income		87,455			92,452			259,522			244,336
PROVISION FOR CREDIT LOSSES		7,475			8,803			20,163			24,418
Net interest income after provision    for credit losses		79,980			83,649			239,359			219,918
NON-INTEREST INCOME
Fees and service charges on deposits		2,591			2,372			7,566			6,725
Loan servicing revenue		3,174			3,369			9,754			10,126
Loan servicing asset revaluation		(2,183	)		(3,646	)		(5,354	)		(3,855	)
ATM and interchange fees		1,143			1,205			3,381			3,380
Change in fair value of equity securities, net		388			(313	)		390			230
Net gains on sales of loans		5,864			6,473			17,433			17,325
Wealth management and trust income		1,101			939			3,200			2,902
Other non-interest income		2,307			1,977			6,332			4,979
Total non-interest income		14,385			12,376			42,702			41,812
NON-INTEREST EXPENSE
Salaries and employee benefits		34,974			34,969			102,838			95,005
Occupancy and equipment expense, net		4,373			5,314			14,296			14,162
Impairment charge on assets held for sale		—			—			—			20
Loan and lease related expenses		703			836			2,129			2,287
Legal, audit and other professional fees		3,643			3,805			10,070			10,594
Data processing		4,215			6,472			12,396			14,527
Net (gain) loss recognized on other real estate    owned and other related expenses		74			111			(86	)		296
Other intangible assets amortization expense		1,345			1,551			4,035			4,461
Other non-interest expense		5,000			4,833			15,668			14,667
Total non-interest expense		54,327			57,891			161,346			156,019
INCOME BEFORE PROVISION FOR INCOME TAXES		40,038			38,134			120,715			105,711
PROVISION FOR INCOME TAXES		9,710			9,912			30,276			27,437
NET INCOME	$	30,328		$	28,222		$	90,439		$	78,274
EARNINGS PER COMMON SHARE
Basic	$	0.70		$	0.66		$	2.08		$	2.01
Diluted	$	0.69		$	0.65		$	2.07		$	1.98

See accompanying Notes to Unaudited Interim Condensed Consolidated Financial Statements.

4

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(dollars in thousands)	2024			2023			2024			2023
Net income	$	30,328		$	28,222		$	90,439		$	78,274
Securities available-for-sale
Unrealized holding gains (losses) arising during the period		53,138			(37,330	)		41,010			(36,553	)
Tax effect		(14,172	)		9,970			(10,937	)		9,763
Net of tax		38,966			(27,360	)		30,073			(26,790	)
Cash flow hedges
Unrealized holding gains (losses) arising during the period		(3,784	)		4,648			2,417			13,357
Reclassification adjustments for net gains included    in net income		(4,637	)		(4,562	)		(14,192	)		(10,381	)
Tax effect		2,246			(23	)		3,141			(795	)
Net of tax		(6,175	)		63			(8,634	)		2,181
Total other comprehensive income (loss)		32,791			(27,297	)		21,439			(24,609	)
Comprehensive income	$	63,119		$	925		$	111,878		$	53,665

See accompanying Notes to Unaudited Interim Condensed Consolidated Financial Statements.

5

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

					Additional									Accumulated Other			Total
(dollars in thousands,	Common Stock				Paid-In			Retained			Treasury			Comprehensive			Stockholders’
except share data)	Shares		Amount		Capital			Earnings			Stock			Income (Loss)			Equity
Balance, June 30, 2023		37,752,002	$	391	$	599,718		$	379,078		$	(50,383	)	$	(114,862	)	$	813,942
Net income		—		—		—			28,222			—			—			28,222
Other comprehensive loss,    net of tax		—		—		—			—			—			(27,297	)		(27,297	)
Issuance of common stock upon   exercise of stock options, net		29,766		—		347			—			—			—			347
Restricted stock activity, net		5,112		—		(113	)		—			54			—			(59	)
Issuance of common stock due to   business combination, net of   issuance costs		5,932,323		59		106,958			—			—			—			107,017
Cash dividends declared on    common stock ($0.09 per share)		—		—		—			(3,932	)		—			—			(3,932	)
Share-based compensation    expense		—		—		1,705			—			—			—			1,705
Balance, September 30, 2023		43,719,203	$