Byline Bancorp, Inc. Reports First Quarter 2025 Financial Results

First quarter net income of $28.2 million, $0.64 diluted earnings per share

Byline Bancorp, Inc. (NYSE:BY), today reported:

Roberto R. Herencia, Executive Chairman and CEO of Byline Bancorp, commented, "We advanced our strategic priorities in the first quarter, drove solid financial performance, and deepened relationships with commercial customers. On April 1st, we successfully closed our partnership with First Security Bancorp, Inc. and recently completed the core system conversion and integration. We are pleased with the credit ratings upgrade from Kroll, which highlights Byline's financial strength. Our focus remains on executing our strategy of becoming the preeminent commercial bank in Chicago."

Alberto J. Paracchini, President of Byline Bancorp, added, "First quarter results were highlighted by steady earnings and profitability, net interest margin expansion, stable deposit and loan growth, repayment of our term loan, and controlled expenses. As we navigate the current landscape, we believe our continued strong capital position reflects a well-managed balance sheet and strong risk management practices. I want to thank our employees for their continued hard work in serving our customers."

Credit Ratings Upgrade

On March 18, 2025, Kroll Bond Rating Agency, LLC ("KBRA") upgraded the credit ratings of both Byline Bancorp, Inc. and our subsidiary, Byline Bank. KBRA upgraded Byline Bancorp, Inc.'s senior unsecured debt rating to BBB+, the subordinated debt rating to BBB, and the short-term debt rating to K2. In addition, KBRA upgraded Byline Bank's deposit and senior unsecured debt ratings to A- and the subordinated debt rating to BBB+. KBRA affirmed the short-term deposit and debt ratings of K2 for Byline Bank. KBRA's outlook for Byline's long-term ratings were revised to Stable following the upgrade.

First Security Acquisition

On April 1, 2025, we completed our acquisition of First Security Bancorp, Inc., and its wholly-owned subsidiary, First Security Trust and Savings Bank. The transaction brings Byline's combined total assets to approximately $9.9 billion, with approximately $7.2 billion in loans and approximately $7.8 billion in deposits. The acquisition solidifies Byline as Chicago's preeminent commercial bank, with 46 branches throughout the Chicago and Milwaukee metropolitan areas, based on information as of March 31, 2025.

Board Declares Cash Dividend of $0.10 per Share

On April 22, 2025, the Company's Board of Directors declared a cash dividend of $0.10 per share. The dividend will be paid on May 20, 2025, to stockholders of record of the Company's common stock as of May 6, 2025.

STATEMENTS OF OPERATIONS HIGHLIGHTS

Net Interest Income

Net interest income for the first quarter of 2025 was $88.2 million, a decrease of $308,000, or 0.3%, from the fourth quarter of 2024. The decrease in net interest income was primarily due to lower interest income due to declining loan yields and two less calendar days, offset by lower interest expense mainly due to lower rates paid on interest-bearing deposits.

Tax-equivalent net interest margin⁽¹⁾ for the first quarter of 2025 was 4.08%, an increase of six basis points compared to the fourth quarter of 2024. Net loan accretion income positively contributed 12 basis points to the net interest margin for both the current and prior quarter.

The average cost of total deposits was 2.30% for the first quarter of 2025, a decrease of 18 basis points compared to the fourth quarter of 2024, mainly as a result of lower rates paid on deposits and a shift in the deposit mix. Average non-interest-bearing demand deposits were 23.4% of average total deposits for the current quarter compared to 23.8% during the prior quarter.

Provision for Credit Losses

The provision for credit losses was $9.2 million for the first quarter of 2025, an increase of $2.3 million compared to $6.9 million for the fourth quarter of 2024, mainly attributed to a larger allowance for government guaranteed collectively assessed loans based on changes in loss rates.

Non-interest Income

Non-interest income for the first quarter of 2025 was $14.9 million, a decrease of $1.3 million, or 8.0%, compared to $16.1 million for the fourth quarter of 2024. The decrease in total non-interest income was primarily due to a decrease in net gains on sales of loans, driven by lower volume and guaranteed balances. Net gains on sales of loans were $4.9 million for the current quarter, a decrease of $2.2 million, or 30.5% compared to the prior quarter. During the first quarter of 2025, we sold $70.2 million of U.S. government guaranteed loans compared to $88.9 million during the fourth quarter of 2024.

Non-interest Expense

Non-interest expense for the first quarter of 2025 was $56.4 million, a decrease of $1.0 million, or 1.7%, compared to $57.4 million for the fourth quarter of 2024. The decrease in non-interest expense was mainly due to a $1.0 million decrease in salaries and employee benefits resulting from a lower day count and lower incentive compensation, a $612,000 decrease in net loss recognized on other real estate owned and other related expenses mainly due to lower real estate taxes, and a $337,000 decrease in other non-interest expenses mainly due to a $946,000 decrease in advertising and promotion expense and decreases in other general expenses, offset by a $767,000 lower gain on sales of leased assets. These decreases were offset by an increase to data processing of $698,000 mainly due to merger-related data processing expenses.

Our efficiency ratio was 53.66%⁽¹⁾ for the first quarter of 2025, compared to 53.58% for the fourth quarter of 2024, an increase of 8 basis points. Our adjusted efficiency ratio was 53.04%⁽¹⁾ for the first quarter of 2025, compared to 53.37%⁽¹⁾ for the fourth quarter of 2024, a decrease of 33 basis points.

Income Taxes

We recorded income tax expense of $9.2 million during the first quarter of 2025, compared to $10.0 million during the fourth quarter of 2024. The effective tax rates were 24.6% and 24.9% for the first quarter of 2025 and fourth quarter of 2024, respectively.

STATEMENTS OF FINANCIAL CONDITION HIGHLIGHTS

Assets

Total assets were $9.6 billion as of March 31, 2025, an increase of $88.2 million, or 0.9%, compared to $9.5 billion at December 31, 2024. The increase for the current quarter was mainly due to an increase in securities available-for-sale of $122.4 million primarily from purchases and an increase in net loans and leases of $116.6 million driven by increases to the commercial and industrial loan portfolio. These were offset by a decrease in cash and cash equivalents of $141.8 million, due to purchases of securities and lower balances held with the Federal Reserve Bank.

Asset and Credit Quality

The ACL was $100.4 million as of March 31, 2025, an increase of $2.4 million, or 2.5%, from $98.0 million at December 31, 2024, mainly due to growth in the loan and lease portfolio and higher allowance on commercial and industrial loans. Net charge-offs of loans and leases during the first quarter of 2025 were $6.6 million, or 0.39% of average loans and leases, on an annualized basis. This was a decrease of $1.1 million compared to net charge-offs of $7.8 million, or 0.45% of average loans and leases, during the fourth quarter of 2024. The decrease in charge-offs for the quarter was primarily in the government guaranteed loan portfolio.

Non-performing assets were $59.9 million, or 0.62% of total assets, as of March 31, 2025, a decrease of $7.4 million from $67.2 million, or 0.71% of total assets, at December 31, 2024. The decrease was primarily due to charge-off and resolution of non-performing assets. The government guaranteed portion of non-performing loans included in non-performing assets was $9.4 million at March 31, 2025, compared to $9.9 million at December 31, 2024, a decrease of $438,000.

Deposits and Other Liabilities

Total deposits increased $94.7 million to $7.6 billion at March 31, 2025 compared to $7.5 billion at December 31, 2024. The increase in deposits in the current quarter was mainly due to increases in money market accounts and interest-bearing business checking accounts, both due to deposit shift and new depositors, offset by decreases to time deposits mainly due to decreased brokered time deposits.

Total borrowings and other liabilities were $900.3 million at March 31, 2025, a decrease of $46.1 million from $946.4 million at December 31, 2024. The decrease was primarily driven by decreased Federal Home Loan Bank advances.

Stockholders' Equity

Total stockholders' equity was $1.1 billion at March 31, 2025, an increase of $39.6 million, or 3.6%, from December 31, 2024, primarily due to an increase to retained earnings from net income and a decrease in accumulated other comprehensive loss due to a decrease in the unrealized losses on securities available-for-sale. During the first quarter of 2025, we purchased 26,000 shares of our common stock under our share repurchase plan, at an average price of $26.41 per share.

Conference Call, Webcast and Slide Presentation

We will host a conference call and webcast at 9:00 a.m. Central Time on Friday, April 25, 2025, to discuss our quarterly financial results. Analysts and investors may participate in the question-and-answer session. The call can be accessed via telephone at (833) 470-1428; passcode 400191. A recorded replay can be accessed through May 9, 2025, by dialing (866) 813-9403; passcode: 172708.

A slide presentation relating to our first quarter 2025 results will be accessible prior to the conference call. The slide presentation and webcast of the conference call can be accessed on our investor relations website at www.bylinebancorp.com.

About Byline Bancorp, Inc.

Headquartered in Chicago, Byline Bancorp, Inc. is the parent company of Byline Bank, a full service commercial bank serving small- and medium-sized businesses, financial sponsors, and consumers. Byline Bank has approximately $9.6 billion in assets and operates 46 branch locations throughout the Chicago and Milwaukee metropolitan areas. Byline Bank offers a broad range of commercial and community banking products and services including small ticket equipment leasing solutions and is one of the top Small Business Administration lenders in the United States.

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 judgment and analysis, which may or may not prove to be correct, and which are subject to uncertainties and contingencies outside the control of Byline and its respective affiliates, directors, employees and other representatives, which could cause actual results to differ materially from those presented in this communication.

No representations, warranties or guarantees are or will be made by Byline as to the reliability, accuracy or completeness of any forward-looking statements contained in this communication or that such forward-looking statements are or will remain based on reasonable assumptions. You should not place undue reliance on any forward-looking statements contained in this communication.

Certain risks and important factors that could affect Byline's future results are identified in our Annual Report on Form 10-K and other reports we file with the Securities and Exchange Commission, including among other things under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024. 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)

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

BYLINE BANCORP, INC. AND SUBSIDIARIES

SELECTED FINANCIAL DATA (unaudited)

 BYLINE BANCORP, INC. AND SUBSIDIARIES

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

 BYLINE BANCORP, INC. AND SUBSIDIARIES

SELECTED BALANCE SHEET TABLES AND FINANCIAL RATIOS (unaudited)

The following table presents our allocation of originated, purchased credit deteriorated (PCD), and acquired non-credit-deteriorated loans and leases at the dates indicated: