[10-Q] Byline Bancorp, Inc. Quarterly Earnings Report
Corning Inc. (GLW) – Form 144 filing
An unidentified insider has notified the SEC of an intent to sell up to 82,103 common shares through J.P. Morgan Securities on or after 08/07/2025. At the stated aggregate market value of $5.25 million, the proposed sale equates to roughly 0.01 % of Corning’s 856.6 million shares outstanding. The stock was acquired via compensation grants received on 04/15/2022 (35,423 sh) and 04/14/2023 (46,680 sh). No sales have been reported by this individual during the past three months.
The filer certifies awareness of no undisclosed adverse information and affirms Rule 144 compliance; a Rule 10b5-1 trading plan may govern the transaction. This notice signals intent only—actual execution could vary in timing or amount.
Corning Inc. (GLW) – Comunicazione Form 144
Un insider non identificato ha informato la SEC dell’intenzione di vendere fino a 82.103 azioni ordinarie tramite J.P. Morgan Securities a partire dal 08/07/2025. Al valore di mercato complessivo indicato di 5,25 milioni di dollari, la vendita proposta corrisponde a circa lo 0,01 % delle 856,6 milioni di azioni in circolazione di Corning. Le azioni sono state acquisite tramite compensi ricevuti in data 15/04/2022 (35.423 azioni) e 14/04/2023 (46.680 azioni). Negli ultimi tre mesi non sono state segnalate vendite da parte di questo individuo.
Il dichiarante certifica di non essere a conoscenza di informazioni negative non divulgate e conferma la conformità alla Regola 144; la transazione potrebbe essere regolata da un piano di trading secondo la Regola 10b5-1. Questa comunicazione indica solo l’intenzione di vendita, pertanto l’effettiva esecuzione potrebbe variare in termini di tempistiche o quantità.
Corning Inc. (GLW) – Presentación del Formulario 144
Un insider no identificado ha notificado a la SEC su intención de vender hasta 82,103 acciones ordinarias a través de J.P. Morgan Securities a partir del 07/08/2025. Al valor de mercado agregado declarado de 5,25 millones de dólares, la venta propuesta equivale aproximadamente al 0,01 % de las 856,6 millones de acciones en circulación de Corning. Las acciones fueron adquiridas mediante concesiones de compensación recibidas el 15/04/2022 (35.423 acciones) y el 14/04/2023 (46.680 acciones). No se han reportado ventas por esta persona en los últimos tres meses.
El declarante certifica no tener conocimiento de información adversa no divulgada y afirma cumplir con la Regla 144; la transacción podría estar regida por un plan de negociación según la Regla 10b5-1. Este aviso solo indica la intención, por lo que la ejecución real podría variar en tiempo o cantidad.
코닝 주식회사 (GLW) – Form 144 제출
신원이 확인되지 않은 내부자가 2025년 8월 7일 이후 J.P. Morgan Securities를 통해 최대 82,103주의 보통주를 매도할 의사를 SEC에 통지했습니다. 명시된 총 시장 가치는 525만 달러로, 제안된 매도는 코닝의 총 발행 주식수 8억 5,660만주의 약 0.01%에 해당합니다. 해당 주식은 2022년 4월 15일(35,423주)과 2023년 4월 14일(46,680주)에 보상으로 취득되었습니다. 이 개인은 지난 3개월 동안 매도 내역이 보고되지 않았습니다.
신고자는 미공개 부정적 정보가 없음을 확인하며, Rule 144 준수를 인정합니다; 거래는 Rule 10b5-1 거래 계획에 따라 이루어질 수 있습니다. 이 통지는 단지 의도 표명일 뿐 실제 거래 시기나 규모는 달라질 수 있습니다.
Corning Inc. (GLW) – Dépôt du formulaire 144
Un initié non identifié a informé la SEC de son intention de vendre jusqu’à 82 103 actions ordinaires via J.P. Morgan Securities à compter du 07/08/2025. À la valeur marchande totale indiquée de 5,25 millions de dollars, la vente proposée représente environ 0,01 % des 856,6 millions d’actions en circulation de Corning. Les actions ont été acquises par des attributions de rémunération reçues le 15/04/2022 (35 423 actions) et le 14/04/2023 (46 680 actions). Aucune vente n’a été signalée par cette personne au cours des trois derniers mois.
Le déclarant certifie ne pas être au courant d’informations négatives non divulguées et affirme respecter la règle 144 ; une transaction pourrait être régie par un plan de négociation conforme à la règle 10b5-1. Cet avis ne signale qu’une intention – l’exécution réelle peut varier en termes de calendrier ou de quantité.
Corning Inc. (GLW) – Form 144 Einreichung
Ein nicht identifizierter Insider hat der SEC die Absicht gemeldet, bis zu 82.103 Stammaktien über J.P. Morgan Securities am oder nach dem 07.08.2025 zu verkaufen. Zum angegebenen Gesamtmarktwert von 5,25 Millionen US-Dollar entspricht der geplante Verkauf etwa 0,01 % der ausstehenden 856,6 Millionen Corning-Aktien. Die Aktien wurden durch Vergütungszuteilungen am 15.04.2022 (35.423 Aktien) und 14.04.2023 (46.680 Aktien) erworben. In den letzten drei Monaten wurden keine Verkäufe dieser Person gemeldet.
Der Einreicher bestätigt, keine nicht offengelegten negativen Informationen zu kennen und bestätigt die Einhaltung der Regel 144; die Transaktion könnte durch einen Handelsplan gemäß Regel 10b5-1 geregelt sein. Diese Mitteilung signalisiert lediglich die Absicht – die tatsächliche Ausführung kann zeitlich oder mengenmäßig abweichen.
- None.
- Insider intends to sell 82,103 GLW shares valued at $5.3 M, which some investors may view as a mild negative signal despite its small proportion of shares outstanding.
Insights
TL;DR: Small insider sale (~0.01 % of float) worth $5.3 M; unlikely to move GLW price materially.
The filing discloses a modest disposal relative to Corning’s market capitalization and share count. Because the shares stem from routine stock-based compensation and the filer has had no recent sales, the transaction appears to be ordinary liquidity management rather than a strategic shift. Volume is immaterial versus GLW’s average daily trading volume, so market impact should be negligible. Investors typically monitor clusters or unusually large insider sales; this single filing does not meet that threshold.
TL;DR: Routine Form 144; no red flags in governance or disclosure practices.
The filer followed disclosure rules, identifying acquisition dates, grant nature, and broker. Certification that no material non-public information is held, plus possible use of a Rule 10b5-1 plan, reduces governance risk. Absence of aggregate sales in the prior three months supports the view that insider trading windows are respected. Overall, governance implications are neutral.
Corning Inc. (GLW) – Comunicazione Form 144
Un insider non identificato ha informato la SEC dell’intenzione di vendere fino a 82.103 azioni ordinarie tramite J.P. Morgan Securities a partire dal 08/07/2025. Al valore di mercato complessivo indicato di 5,25 milioni di dollari, la vendita proposta corrisponde a circa lo 0,01 % delle 856,6 milioni di azioni in circolazione di Corning. Le azioni sono state acquisite tramite compensi ricevuti in data 15/04/2022 (35.423 azioni) e 14/04/2023 (46.680 azioni). Negli ultimi tre mesi non sono state segnalate vendite da parte di questo individuo.
Il dichiarante certifica di non essere a conoscenza di informazioni negative non divulgate e conferma la conformità alla Regola 144; la transazione potrebbe essere regolata da un piano di trading secondo la Regola 10b5-1. Questa comunicazione indica solo l’intenzione di vendita, pertanto l’effettiva esecuzione potrebbe variare in termini di tempistiche o quantità.
Corning Inc. (GLW) – Presentación del Formulario 144
Un insider no identificado ha notificado a la SEC su intención de vender hasta 82,103 acciones ordinarias a través de J.P. Morgan Securities a partir del 07/08/2025. Al valor de mercado agregado declarado de 5,25 millones de dólares, la venta propuesta equivale aproximadamente al 0,01 % de las 856,6 millones de acciones en circulación de Corning. Las acciones fueron adquiridas mediante concesiones de compensación recibidas el 15/04/2022 (35.423 acciones) y el 14/04/2023 (46.680 acciones). No se han reportado ventas por esta persona en los últimos tres meses.
El declarante certifica no tener conocimiento de información adversa no divulgada y afirma cumplir con la Regla 144; la transacción podría estar regida por un plan de negociación según la Regla 10b5-1. Este aviso solo indica la intención, por lo que la ejecución real podría variar en tiempo o cantidad.
코닝 주식회사 (GLW) – Form 144 제출
신원이 확인되지 않은 내부자가 2025년 8월 7일 이후 J.P. Morgan Securities를 통해 최대 82,103주의 보통주를 매도할 의사를 SEC에 통지했습니다. 명시된 총 시장 가치는 525만 달러로, 제안된 매도는 코닝의 총 발행 주식수 8억 5,660만주의 약 0.01%에 해당합니다. 해당 주식은 2022년 4월 15일(35,423주)과 2023년 4월 14일(46,680주)에 보상으로 취득되었습니다. 이 개인은 지난 3개월 동안 매도 내역이 보고되지 않았습니다.
신고자는 미공개 부정적 정보가 없음을 확인하며, Rule 144 준수를 인정합니다; 거래는 Rule 10b5-1 거래 계획에 따라 이루어질 수 있습니다. 이 통지는 단지 의도 표명일 뿐 실제 거래 시기나 규모는 달라질 수 있습니다.
Corning Inc. (GLW) – Dépôt du formulaire 144
Un initié non identifié a informé la SEC de son intention de vendre jusqu’à 82 103 actions ordinaires via J.P. Morgan Securities à compter du 07/08/2025. À la valeur marchande totale indiquée de 5,25 millions de dollars, la vente proposée représente environ 0,01 % des 856,6 millions d’actions en circulation de Corning. Les actions ont été acquises par des attributions de rémunération reçues le 15/04/2022 (35 423 actions) et le 14/04/2023 (46 680 actions). Aucune vente n’a été signalée par cette personne au cours des trois derniers mois.
Le déclarant certifie ne pas être au courant d’informations négatives non divulguées et affirme respecter la règle 144 ; une transaction pourrait être régie par un plan de négociation conforme à la règle 10b5-1. Cet avis ne signale qu’une intention – l’exécution réelle peut varier en termes de calendrier ou de quantité.
Corning Inc. (GLW) – Form 144 Einreichung
Ein nicht identifizierter Insider hat der SEC die Absicht gemeldet, bis zu 82.103 Stammaktien über J.P. Morgan Securities am oder nach dem 07.08.2025 zu verkaufen. Zum angegebenen Gesamtmarktwert von 5,25 Millionen US-Dollar entspricht der geplante Verkauf etwa 0,01 % der ausstehenden 856,6 Millionen Corning-Aktien. Die Aktien wurden durch Vergütungszuteilungen am 15.04.2022 (35.423 Aktien) und 14.04.2023 (46.680 Aktien) erworben. In den letzten drei Monaten wurden keine Verkäufe dieser Person gemeldet.
Der Einreicher bestätigt, keine nicht offengelegten negativen Informationen zu kennen und bestätigt die Einhaltung der Regel 144; die Transaktion könnte durch einen Handelsplan gemäß Regel 10b5-1 geregelt sein. Diese Mitteilung signalisiert lediglich die Absicht – die tatsächliche Ausführung kann zeitlich oder mengenmäßig abweichen.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
OR
For the transition period from ______to ______
Commission File Number
(Exact Name of Registrant as Specified in Its Charter)
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(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.
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).
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.
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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:
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Trading Symbol |
Name of each exchange on which registered |
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,
BYLINE BANCORP, INC.
FORM 10-Q
June 30, 2025
INDEX
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Page |
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PART I. |
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FINANCIAL INFORMATION |
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3 |
Item 1. |
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Financial Statements. The Unaudited Interim Condensed Consolidated Financial Statements of Byline Bancorp, Inc. |
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3 |
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Notes to Unaudited Interim Condensed Consolidated Financial Statements |
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10 |
Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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48 |
Item 3. |
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Quantitative and Qualitative Disclosures about Market Risk |
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82 |
Item 4. |
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Controls and Procedures |
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83 |
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PART II. |
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OTHER INFORMATION |
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84 |
Item 1. |
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Legal Proceedings |
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84 |
Item 1A. |
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Risk Factors |
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84 |
Item 2. |
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Unregistered Sales of Equity Securities and Use of Proceeds |
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84 |
Item 3. |
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Defaults Upon Senior Securities |
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84 |
Item 4. |
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Mine Safety Disclosures |
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84 |
Item 5. |
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Other Information |
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84 |
Item 6. |
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Exhibits |
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85 |
2
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
BYLINE BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
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(dollars in thousands, except share data) |
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June 30, |
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December 31, |
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ASSETS |
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Cash and due from banks |
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$ |
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$ |
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Interest bearing deposits with other banks |
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Cash and cash equivalents |
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Equity and other securities, at fair value |
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Securities available-for-sale, at fair value (amortized cost |
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Securities held-to-maturity, at amortized cost (fair value at December 31, 2024 —$ |
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Restricted stock, at cost |
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Loans held for sale |
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Loans and leases: |
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Loans and leases |
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Allowance for credit losses - loans and leases |
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Net loans and leases |
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Servicing assets, at fair value |
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Premises and equipment, net |
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Other real estate owned |
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Goodwill and other intangible assets, net |
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Bank-owned life insurance |
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Deferred tax assets, net |
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Accrued interest receivable and other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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LIABILITIES |
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Non-interest-bearing demand deposits |
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$ |
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$ |
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Interest-bearing deposits |
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Total deposits |
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Other borrowings |
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Subordinated notes, net |
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Junior subordinated debentures issued to capital trusts, net |
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Accrued interest payable and other liabilities |
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Total liabilities |
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STOCKHOLDERS’ EQUITY |
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Preferred stock |
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Common stock |
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Additional paid-in capital |
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Retained earnings |
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Treasury stock, at cost |
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Accumulated other comprehensive loss, net of tax |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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June 30, 2025 |
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December 31, 2024 |
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Preferred |
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Common |
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Preferred |
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Common |
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Par value |
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$ |
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$ |
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$ |
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$ |
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Shares authorized |
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Shares issued |
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Shares outstanding |
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Treasury shares |
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See accompanying Notes to Unaudited Interim Condensed Consolidated Financial Statements.
3
BYLINE BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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(dollars in thousands, except share and per share data) |
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2025 |
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2024 |
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2025 |
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2024 |
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INTEREST AND DIVIDEND INCOME |
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Interest and fees on loans and leases |
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$ |
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$ |
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$ |
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$ |
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Interest on securities |
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Other interest and dividend income |
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Total interest and dividend income |
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INTEREST EXPENSE |
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Deposits |
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Other borrowings |
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Subordinated notes and debentures |
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Total interest expense |
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Net interest income |
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PROVISION FOR CREDIT LOSSES |
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Net interest income after provision |
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NON-INTEREST INCOME |
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Fees and service charges on deposits |
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Loan servicing revenue |
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Loan servicing asset revaluation |
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( |
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( |
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( |
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( |
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ATM and interchange fees |
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Net losses on sales of securities available-for-sale |
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( |
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( |
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Change in fair value of equity securities, net |
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( |
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Net gains on sales of loans |
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Wealth management and trust income |
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Other non-interest income |
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Total non-interest income |
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NON-INTEREST EXPENSE |
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Salaries and employee benefits |
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Occupancy and equipment expense, net |
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Loan and lease related expenses |
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|
|
|
|
|
|
|
|
|
||||
Legal, audit and other professional fees |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Data processing |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net gain recognized on other real estate owned |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other intangible assets amortization expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other non-interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total non-interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
INCOME BEFORE PROVISION FOR INCOME TAXES |
|
|
|
|
|
|
|
|
|
|
|
|
||||
PROVISION FOR INCOME TAXES |
|
|
|
|
|
|
|
|
|
|
|
|
||||
NET INCOME |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
EARNINGS PER COMMON SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Diluted |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
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 |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
(dollars in thousands) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Securities available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized holding gains (losses) arising during the period |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Reclassification adjustments for net losses included |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Tax effect |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Net of tax |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Cash flow hedges |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized holding gains arising during the period |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reclassification adjustments for net gains included |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Tax effect |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total other comprehensive income (loss) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Comprehensive income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
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 |
|
|
Total |
|
|||||||
(dollars in thousands, |
|
Common Stock |
|
|
Paid-In |
|
|
Retained |
|
|
Treasury |
|
|
Comprehensive |
|
|
Stockholders’ |
|
||||||||||
except share data) |
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Earnings |
|
|
Stock |
|
|
Income (Loss) |
|
|
Equity |
|
|||||||
Balance, March 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Other comprehensive loss, |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Issuance of common stock upon |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Restricted stock activity, net |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
||
Issuance of common stock in |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Cash dividends declared on |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Balance, June 30, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
|
|
|
Accumulated |
|
|
Total |
|
|||||||
(dollars in thousands, |
|
Common Stock |
|
|
Paid-In |
|
|
Retained |
|
|
Treasury |
|
|
Comprehensive |
|
|
Stockholders’ |
|
|||||||||
except share data) |
|
Shares |
|
Amount |
|
|
Capital |
|
|
Earnings |
|
|
Stock |
|
|
Income (Loss) |
|
|
Equity |
|
|||||||
Balance, January 1, 2024 |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
Net income |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Other comprehensive loss, |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Issuance of common stock upon |
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Restricted stock activity, net |
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Issuance of common stock in |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Cash dividends declared on |
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
Share-based compensation |
|
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Balance, June 30, 2024 |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
6
BYLINE BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
|
|
|
|
|
|
Additional |
|
|
|
|
|
|
|
|
Accumulated |
|
|
Total |
|
|||||||
(dollars in thousands, |
Common Stock |
|
|
Paid-In |
|
|
Retained |
|
|
Treasury |
|
|
Comprehensive |
|
|
Stockholders’ |
|
|||||||||
except share data) |
Shares |
|
Amount |
|
|
Capital |
|
|
Earnings |
|
|
Stock |
|
|
Income (Loss) |
|
|
Equity |
|
|||||||
Balance, March 31, 2025 |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
Net income |
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Other comprehensive income, |
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Issuance of common stock upon |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Restricted stock activity, net |
|
( |
) |
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
Issuance of common stock in |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Issuance of common stock |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Cash dividends declared on |
|
— |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Repurchases of common stock |
|
( |
) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Share-based compensation |
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Balance, June 30, 2025 |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
|
|
|
|
|
|
Additional |
|
|
|
|
|
|
|
|
Accumulated |
|
|
Total |
|
|||||||
(dollars in thousands, |
Common Stock |
|
|
Paid-In |
|
|
Retained |
|
|
Treasury |
|
|
Comprehensive |
|
|
Stockholders’ |
|
|||||||||
except share data) |
Shares |
|
Amount |
|
|
Capital |
|
|
Earnings |
|
|
Stock |
|
|
Income (Loss) |
|
|
Equity |
|
|||||||
Balance, January 1, 2025 |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
Net income |
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Other comprehensive income, |
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Issuance of common stock upon |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Restricted stock activity, net |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
||
Issuance of common stock in |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Issuance of common stock |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Cash dividends declared on |
|
— |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Repurchases of common stock |
|
( |
) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Share-based compensation |
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Balance, June 30, 2025 |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
See accompanying Notes to Unaudited Interim Condensed Consolidated Financial Statements.
7
BYLINE BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
Six Months Ended |
|
|||||
|
June 30, |
|
|||||
(dollars in thousands) |
2025 |
|
|
2024 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
||
Net income |
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash from operating activities: |
|
|
|
|
|
||
Provision for credit losses |
|
|
|
|
|
||
Impairment loss on premises and equipment |
|
|
|
|
|
||
Impairment loss on operating lease right-of-use asset |
|
|
|
|
|
||
Depreciation and amortization of premises and equipment |
|
|
|
|
|
||
Net accretion of securities |
|
( |
) |
|
|
( |
) |
Net change in fair value of equity securities |
|
( |
) |
|
|
( |
) |
Net losses on sales of securities available-for-sale |
|
|
|
|
|
||
Net gains on sales of and disposal of premises and equipment |
|
( |
) |
|
|
( |
) |
Net gains on sales of loans |
|
( |
) |
|
|
( |
) |
Net gains on sales of leases |
|
( |
) |
|
|
|
|
Originations of U.S. government guaranteed loans |
|
( |
) |
|
|
( |
) |
Proceeds from U.S. government guaranteed loans sold |
|
|
|
|
|
||
Accretion of premiums and discounts on acquired loans, net |
|
( |
) |
|
|
( |
) |
Net change in servicing assets |
|
|
|
|
|
||
Net gains on sales and valuation adjustments of other real estate owned |
|
( |
) |
|
|
( |
) |
Net amortization of other acquisition accounting adjustments |
|
|
|
|
|
||
Amortization of subordinated debt issuance cost |
|
|
|
|
|
||
Accretion of junior subordinated debentures discount |
|
|
|
|
|
||
Share-based compensation expense |
|
|
|
|
|
||
Deferred tax (benefit) provision |
|
( |
) |
|
|
|
|
Increase in cash surrender value of bank owned life insurance |
|
( |
) |
|
|
( |
) |
Gain on death benefit on bank owned life insurance |
|
( |
) |
|
|
|
|
Changes in assets and liabilities: |
|
|
|
|
|
||
Accrued interest receivable and other assets |
|
|
|
|
|
||
Accrued interest payable and other liabilities |
|
|
|
|
|
||
Net cash provided by operating activities |
|
|
|
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
||
Purchases of securities available-for-sale |
|
( |
) |
|
|
( |
) |
Proceeds from maturities and calls of securities available-for-sale |
|
|
|
|
|
||
Proceeds from paydowns of securities available-for-sale |
|
|
|
|
|
||
Proceeds from sales of securities available-for-sale |
|
|
|
|
|
||
Proceeds from maturities and calls of securities held-to-maturity |
|
|
|
|
|
||
Redemptions (purchases) of Federal Home Loan Bank stock, net |
|
|
|
|
( |
) |
|
Proceeds from leases sold |
|
|
|
|
|
||
Net change in loans and leases |
|
( |
) |
|
|
( |
) |
Purchases of premises and equipment |
|
( |
) |
|
|
( |
) |
Proceeds from sales of premises and equipment |
|
|
|
|
|
||
Proceeds from sales of assets held for sale |
|
|
|
|
|
||
Proceeds from sales of other real estate owned |
|
|
|
|
|
||
Proceeds from bank owned life insurance death benefit |
|
|
|
|
|
||
Net cash received in acquisition of business |
|
|
|
|
|
||
Net cash used in investing activities |
|
( |
) |
|
|
( |
) |
See accompanying Notes to Unaudited Interim Condensed Consolidated Financial Statements.
8
BYLINE BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(UNAUDITED)
|
Six Months Ended |
|
|||||
|
June 30, |
|
|||||
(dollars in thousands) |
2025 |
|
|
2024 |
|
||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
||
Net increase in deposits |
$ |
|
|
$ |
|
||
Repayments of line of credit |
|
|
|
|
( |
) |
|
Repayments of term loan |
|
( |
) |
|
|
( |
) |
Proceeds from short-term borrowings |
|
|
|
|
|
||
Repayments of short-term borrowings |
|
( |
) |
|
|
( |
) |
Proceeds from BTFP advances |
|
|
|
|
|
||
Net increase (decrease) in securities sold under agreements to repurchase |
|
|
|
|
( |
) |
|
Dividends paid on common stock |
|
( |
) |
|
|
( |
) |
Proceeds from issuance of common stock |
|
|
|
|
|
||
Repurchases of common stock |
|
( |
) |
|
|
|
|
Net cash provided by financing activities |
|
( |
) |
|
|
|
|
NET CHANGE IN CASH AND CASH EQUIVALENTS |
|
( |
) |
|
|
|
|
CASH AND CASH EQUIVALENTS, beginning of period |
|
|
|
|
|
||
CASH AND CASH EQUIVALENTS, end of period |
$ |
|
|
$ |
|
||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
|
|
|
|
|
||
Cash paid during the period for interest |
$ |
|
|
$ |
|
||
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND |
|
|
|
|
|
||
Transfer of loans to other real estate owned |
$ |
|
|
$ |
|
||
Right-of-use assets exchanged for operating lease liabilities |
$ |
|
|
$ |
|
||
Common share withholding |
$ |
|
|
$ |
|
||
Due from counterparties |
$ |
|
|
$ |
|
||
Total assets acquired from acquisition |
$ |
|
|
$ |
|
||
Value ascribed to goodwill |
$ |
|
|
$ |
|
||
Total liabilities assumed from acquisition |
$ |
|
|
$ |
|
||
Common stock issued due to acquisition of business |
$ |
|
|
$ |
|
||
Common dividend declared, not paid |
$ |
( |
) |
|
$ |
( |
) |
See accompanying Notes to Unaudited Interim Condensed Consolidated Financial Statements.
9
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
Note 1—Basis of Presentation
These unaudited interim condensed consolidated financial statements include the accounts of Byline Bancorp, Inc., a Delaware corporation (the "Company," "Byline," "we," "us," "our"), a bank holding company whose principal activity is the ownership and management of its Illinois state chartered subsidiary bank, Byline Bank (the "Bank"), based in Chicago, Illinois.
These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission ("SEC"). In preparing these financial statements, the Company has evaluated events and transactions subsequent to June 30, 2025 for potential recognition or disclosure. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. Certain information in footnote disclosures normally included in financial statements prepared in accordance with GAAP has been condensed or omitted pursuant to the rules and regulations of the SEC and the accounting standards for interim financial statements. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Consolidated Financial Statements as of December 31, 2024 and 2023.
The Company has
In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 855, "Subsequent Events," the Company’s management has evaluated subsequent events for potential recognition or disclosure through the date of the issuance of these Condensed Consolidated financial statements.
On August 7, 2025, the Company issued $
Note 2—Accounting Pronouncements Recently Adopted or Issued
The following reflect recent accounting pronouncements that have been adopted or are pending adoption by the Company.
Adopted Accounting Pronouncements
Income Taxes – Improvements to Income Tax Disclosures (Topic 740) –In December 2023, the FASB issued ASU 2023-09 to provide additional transparency into an entity’s income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The standard requires that public business entities disclose, on an annual basis, specific categories in the rate reconciliation and additional information for reconciling items meeting a certain quantitative threshold. The amendments also require that entities disclose on an annual basis: 1) income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes and 2) the income taxes paid (net of refunds received) disaggregated by individual jurisdictions exceeding 5% of total income taxes paid (net of refunds received). The amendments are effective for public business entities for annual periods beginning after December 15, 2024. The Company has evaluated the disclosure requirements of this update and has concluded it will only impact certain limited annual disclosures with no material impact to the consolidated financial statements.
Issued Accounting Pronouncements Pending Adoption
Income Statement (Topic 220) – In November 2024, the FASB issued ASU 2024-03, Income Statement (Topic 220) – Reporting Comprehensive Income – Expense Disaggregation Disclosures, to address requests from investors for more detailed information about certain expense types. The standard requires that public business entities disclose disaggregated information about specific relevant natural expense categories underlying certain income statement expense line items. The ASU requires entities to disaggregate relevant expense caption presented on the face of the income statement within continuing operations into expense categories such as employee compensation, depreciation, and intangible asset amortization. The amendments are effective for public business entities for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Entities are required to adopt prospectively. In January 2025, the FASB issued ASU 2025-01 to amend the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning
10
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
after December 15, 2027. The Company is evaluating the accounting and disclosure requirements of this update and does not expect them to have a material effect on the consolidated financial statements.
Note 3—Acquisition of a Business
On
At the effective time of the merger, each share of First Security's common stock was converted into the right to receive
The transaction resulted in goodwill of $
Merger-related expenses, including salaries and employee benefits of $
Merger-related expenses, including salaries and employee benefits of $
There were
The acquisition was accounted for using the acquisition method of accounting in accordance with ASC Topic 805. Assets acquired, liabilities assumed, and consideration exchanged were recorded at their respective acquisition date fair values. Determining the fair value of assets and liabilities involves significant judgment regarding methods and assumptions used to calculate estimated fair values. All of the fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information regarding the closing date fair values become available.
11
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
The following table presents a summary of the preliminary estimates of the fair values of assets acquired and liabilities assumed as of the acquisition date:
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
|
|
Securities available-for-sale |
|
|
|
|
Loans |
|
|
|
|
Other real estate owned |
|
|
|
|
Other intangible assets |
|
|
|
|
Bank-owned life insurance |
|
|
|
|
Deferred tax assets, net |
|
|
|
|
Other assets |
|
|
|
|
Total assets acquired |
|
|
|
|
Liabilities |
|
|
|
|
Deposits |
|
|
|
|
Accrued expenses and other liabilities |
|
|
|
|
Total liabilities assumed |
|
|
|
|
Net assets acquired |
|
$ |
|
|
Consideration paid |
|
|
|
|
Common stock ( |
|
|
|
|
Cash paid |
|
|
|
|
Total consideration paid |
|
|
|
|
Goodwill |
|
$ |
|
|
The following table presents the fair value and gross contractual amounts receivable of acquired non-credit-deteriorated loans from the acquisition, and their respective expected contractual cash flows as of the acquisition date:
Fair value |
|
$ |
|
|
Gross contractual amounts receivable |
|
|
|
|
Estimate of contractual cash flows not expected to be collected(1) |
|
|
|
|
Estimate of contractual cash flows expected to be collected |
|
|
|
(1)
The following table provides the unaudited pro forma information for the results of operations for the three and six months ended June 30, 2024 and for the six months ended June 30, 2025, as if the acquisition had occurred on January 1, 2024. The pro forma results combine the historical results of First Security into the Company’s Consolidated Statements of Operations, including the impact of certain acquisition accounting adjustments, which includes loan discount accretion, intangible assets amortization, and deposit premium accretion. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results that would have been obtained had the acquisition actually occurred on January 1, 2024. No assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, provision for credit losses, expense efficiencies or asset dispositions. Recognized acquisition-related expenses and other adjustments related to the timing of expenses, are included in net income in the following table:
|
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
||||||
|
|
June 30, |
|
|
June 30, |
|
||||||
(dollars in thousands, other than per share, unaudited) |
|
2024 |
|
|
2025 |
|
|
2024 |
|
|||
Total revenues (net interest income and non-interest income) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Net income |
|
|
|
|
|
|
|
|
|
|||
Earnings per share—basic |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Earnings per share—diluted |
|
|
|
|
|
|
|
|
|
|||
The operating results of the Company include the operating results generated by the acquired assets and assumed liabilities of First Security for the period from April 1, 2025 through June 30, 2025. Revenues and earnings of the acquired
12
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
company since the acquisition date have not been disclosed as it is not practicable as First Security was merged into the Company and separate financial information is not readily available.
Note 4—Securities
The following tables summarize the amortized cost and fair values of securities available-for-sale and securities held-to-maturity as of the dates shown and the corresponding amounts of gross unrealized gains and losses:
June 30, 2025 |
|
Amortized |
|
|
Gross |
|
|
Gross |
|
|
Basis Adjustments(1) |
|
|
Fair |
|
|||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. Treasury Notes |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||
U.S. Government agencies |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Obligations of states, municipalities, and |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|||
Residential mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Agency |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|||
Non-agency |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|||
Commercial mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Agency |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|||
Corporate securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Asset-backed securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||
(1)
December 31, 2024 |
|
Amortized |
|
|
Gross |
|
|
Gross |
|
|
Basis Adjustments |
|
|
Fair |
|
|||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. Treasury Notes |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||
U.S. Government agencies |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Obligations of states, municipalities, and |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Residential mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Agency |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Non-agency |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Commercial mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Agency |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Corporate securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Asset-backed securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||
December 31, 2024 |
|
Amortized |
|
|
Gross |
|
|
Gross |
|
|
Fair |
|
||||
Held-to-maturity |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Obligations of states, municipalities, and political |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
There were
The Company hedges the fair value of certain fixed-rate investment securities.
13
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
Gross unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of the dates presented, are summarized as follows:
|
|
|
|
Less than 12 Months |
|
|
12 Months or Longer |
|
|
Total |
|
||||||||||||||||
June 30, 2025 |
|
Number of |
|
Fair |
|
|
Unrealized |
|
|
Fair |
|
|
Unrealized |
|
|
Fair |
|
|
Unrealized |
|
|||||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
U.S. Treasury Notes |
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||||
U.S. Government agencies |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Obligations of states, |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Residential mortgage-backed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Agency |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Non-agency |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Commercial mortgage-backed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Agency |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Corporate securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||||
Asset-backed securities |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Total |
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||||
|
|
|
|
Less than 12 Months |
|
|
12 Months or Longer |
|
|
Total |
|
||||||||||||||||
December 31, 2024 |
|
Number of |
|
Fair |
|
|
Unrealized |
|
|
Fair |
|
|
Unrealized |
|
|
Fair |
|
|
Unrealized |
|
|||||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
U.S. Treasury Notes |
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||||
U.S. Government agencies |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Obligations of states, |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Residential mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Agency |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Non-agency |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Commercial mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Agency |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Corporate securities |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
Asset-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||||
Total |
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||||
14
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
Certain securities have fair values less than amortized cost and, therefore, contain unrealized losses. The Company evaluated the securities which had unrealized losses for potential credit losses and determined there were none. There were
Accrued interest receivable on securities totaled $
The Company anticipates full recovery of amortized cost with respect to these securities by maturity. The Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell them before recovery of their amortized cost basis, which may be at maturity.
The proceeds from all sales and calls of securities available-for-sale, and the associated gains and losses were as follows for the periods presented:
|
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Proceeds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Gross gains |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross losses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Securities posted and pledged as collateral for the following purpose or beneficiary as of the following dates:
Purpose or beneficiary |
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||
Public fund deposits |
|
$ |
|
|
$ |
|
||
Customer repurchase agreements |
|
|
|
|
|
|
||
Letters of credit |
|
|
|
|
|
|
||
Federal Reserve Bank |
|
|
|
|
|
|
||
Total pledged securities |
|
$ |
|
|
$ |
|
||
At June 30, 2025 and December 31, 2024, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than
At June 30, 2025, the amortized cost and fair value of debt securities are shown by contractual maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.
|
|
Amortized |
|
|
Fair |
|
||
Available-for-sale |
|
|
|
|
|
|
||
Due in one year or less |
|
$ |
|
|
$ |
|
||
Due from one to five years |
|
|
|
|
|
|
||
Due from five to ten years |
|
|
|
|
|
|
||
Due after ten years |
|
|
|
|
|
|
||
Mortgage-backed securities |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
15
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
Note 5—Loan and Lease Receivables and Allowance for Credit Losses
Loan and Lease Receivables
Outstanding loan and lease receivables as of the dates presented were categorized as follows:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
Commercial real estate |
|
$ |
|
|
$ |
|
||
Residential real estate |
|
|
|
|
|
|
||
Construction, land development, and other land |
|
|
|
|
|
|
||
Commercial and industrial |
|
|
|
|
|
|
||
Installment and other |
|
|
|
|
|
|
||
Lease financing receivables |
|
|
|
|
|
|
||
Total loans and leases |
|
|
|
|
|
|
||
Net unamortized deferred fees and costs |
|
|
|
|
|
|
||
Initial direct costs |
|
|
|
|
|
|
||
Allowance for credit losses - loans and leases |
|
|
( |
) |
|
|
( |
) |
Net loans and leases |
|
$ |
|
|
$ |
|
||
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
Lease financing receivables |
|
|
|
|
|
|
||
Net minimum lease payments |
|
$ |
|
|
$ |
|
||
Unguaranteed residual values |
|
|
|
|
|
|
||
Unearned income |
|
|
( |
) |
|
|
( |
) |
Total lease financing receivables |
|
|
|
|
|
|
||
Initial direct costs |
|
|
|
|
|
|
||
Lease financial receivables before allowance for |
|
$ |
|
|
$ |
|
||
Total loans and leases consist of originated loans and leases, purchased credit deteriorated ("PCD") and acquired non-credit-deteriorated loans and leases. Fair value adjustments for acquired loans are included in total loans and leases. At June 30, 2025 and December 31, 2024, total loans and leases included the guaranteed amount of U.S. government guaranteed loans of $
The minimum annual lease payments for lease financing receivables as of June 30, 2025 are summarized as follows:
|
|
Minimum Lease |
|
|
Remainder of 2025 |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
|
Originated loans and leases represent originations excluding loans initially acquired in a business combination. However, once an acquired loan reaches its maturity date, and is re-underwritten and renewed, it is internally classified as an originated loan. PCD loans are those acquired from a business combination with evidence of credit quality deterioration and are accounted for under ASC Topic 326. Acquired non-credit-deteriorated loans and leases represent loans and leases acquired with an outstanding balance from a business combination without more than insignificant evidence of credit quality
16
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
deterioration and are accounted for under ASC Topic 310-20.
June 30, 2025 |
|
Originated |
|
|
Purchased Credit Deteriorated |
|
|
Acquired |
|
|
Total |
|
||||
Commercial real estate |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Construction, land development, and other land |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial and industrial |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Installment and other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Lease financing receivables |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total loans and leases |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
December 31, 2024 |
|
Originated |
|
|
Purchased Credit Deteriorated |
|
|
Acquired |
|
|
Total |
|
||||
Commercial real estate |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Construction, land development, and other land |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial and industrial |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Installment and other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Lease financing receivables |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total loans and leases |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
PCD loans—
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||
|
|
Unpaid |
|
|
Carrying |
|
|
Unpaid |
|
|
Carrying |
|
||||
Commercial real estate |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Construction, land development, and other land |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial and industrial |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Installment and other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total purchased credit deteriorated loans |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following table is a reconciliation of acquired First Security PCD loans between their purchase price and their par value at the time of the acquisition. Refer to Note 3—Acquisition of a Business for further information.
Fair value of loans at acquisition |
|
$ |
|
|
Allowance for credit losses - loans and leases, at acquisition |
|
|
|
|
Non-credit discount/premium at acquisition |
|
|
|
|
Par value of acquired PCD loans at acquisition |
|
$ |
|
17
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
Acquired non-credit-deteriorated loans and leases—
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||
|
|
Unpaid |
|
|
Carrying |
|
|
Unpaid |
|
|
Carrying |
|
||||
Commercial real estate |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Construction, land development, and other land |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial and industrial |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Installment and other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Lease financing receivables |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total acquired non-credit-deteriorated |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Company hedges interest rates on certain loans using interest rate swaps through which the Company pays variable amounts and receives fixed amounts. Refer to Note 16—Derivative Instruments and Hedge Activities for additional discussion.
Allowance for Credit Losses
Loans and leases considered for inclusion in the allowance for credit losses include acquired non-credit-deteriorated loans and leases, purchased credit deteriorated loans, and originated loans and leases.
The Bank’s credit risk rating methodology assigns risk ratings from 1 to 10, where a higher rating represents higher risk. Risk ratings for all loans of $
Pass—Ratings 1‑4 define the risk levels of borrowers and guarantors that offer a minimal to an acceptable level of risk.
Watch—A watch asset (rating of 5) has credit exposure that presents higher than average risk and warrants greater than routine attention by Bank personnel due to conditions affecting the borrower, the borrower’s industry or the economic environment.
Special Mention—A special mention asset (rating of 6) has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date.
Substandard Accrual—A substandard accrual asset (rating of 7) has well‑defined weakness or weaknesses in cash flow and collateral coverage resulting in a distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. This classification may be used in limited cases, where despite credit severity, the borrower is current on payments and there is an agreed plan for credit remediation.
Substandard Non‑Accrual—A substandard asset (rating of 8) has well‑defined weakness or weaknesses in cash flow and collateral coverage resulting in the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
Doubtful—A doubtful asset (rating of 9) has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.
Loss—A loss asset (rating of 10) is considered uncollectible and of such little value that its continuance as a realizable asset is not warranted.
Revolving loans that are converted to term loans are treated as new originations and are presented by year of origination. Generally, existing term loans that are re-underwritten are reflected in the table in the year of renewal. During the six months ended June 30, 2025, there were $
18
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
The following tables summarize the risk rating categories of the loans and leases considered for inclusion in the allowance for credit losses - loans and leases calculation, as of the dates presented, and includes the gross charge-offs for the six months ended June 30, 2025 and year ended December 31, 2024:
|
|
Term loans amortized cost by origination year |
|
|
Revolving |
|
|
Total |
|
|||||||||||||||||||||||
June 30, 2025 |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
Prior |
|
|
Loans |
|
|
Loans |
|
||||||||
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Watch |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Substandard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Gross charge-offs, six months |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Residential Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Watch |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Substandard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Gross charge-offs, six months |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Construction, Land Development, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Watch |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Substandard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Gross charge-offs, six months |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Watch |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Substandard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Gross charge-offs, six months |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Installment and Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Watch |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Substandard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Gross charge-offs, six months |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Lease Financing Receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Watch |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Substandard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Gross charge-offs, six months |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Total Loans and Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Risk Rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Watch |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Substandard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Gross charge-offs, six months |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
19
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
|
|
Term loans amortized cost by origination year |
|
|
Revolving |
|
|
Total |
|
|||||||||||||||||||||||
December 31, 2024 |
|
2024 |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
Prior |
|
|
Loans |
|
|
Loans |
|
||||||||
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Watch |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Substandard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Gross charge-offs, year ended |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Residential Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Watch |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Substandard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Gross charge-offs, year ended |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Construction, Land Development, & Land |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Watch |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Substandard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Gross charge-offs, year ended |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Watch |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Substandard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Gross charge-offs, year ended |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Installment and Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Watch |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Substandard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Gross charge-offs, year ended |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Lease Financing Receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Watch |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Substandard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Gross charge-offs, year ended |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Total Loans and Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Watch |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special Mention |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Substandard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Gross charge-offs, year ended |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
At June 30, 2025 and at December 31, 2024, there were no loans or leases which were risk rated Doubtful or Loss.
20
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
The following tables summarize contractual delinquency information of the loans and leases considered for inclusion in the allowance for credit losses - loans and leases calculation as of the dates presented:
June 30, 2025 |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
Prior |
|
|
Revolving |
|
|
Total |
|
||||||||
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
30-59 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
60-89 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 90 Accruing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-accrual |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Residential Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
30-59 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
60-89 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 90 Accruing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-accrual |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Construction, Land Development, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
30-59 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
60-89 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 90 Accruing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-accrual |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
30-59 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
60-89 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 90 Accruing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-accrual |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Installment and Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
30-59 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
60-89 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 90 Accruing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-accrual |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Lease Financing Receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
30-59 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
60-89 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 90 Accruing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-accrual |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Total Loans and Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
30-59 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
60-89 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 90 Accruing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-accrual |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
21
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
December 31, 2024 |
|
2024 |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
Prior |
|
|
Revolving |
|
|
Total |
|
||||||||
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
30-59 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
60-89 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 90 Accruing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-accrual |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Residential Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
30-59 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
60-89 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 90 Accruing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-accrual |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Construction, Land Development, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
30-59 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
60-89 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 90 Accruing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-accrual |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
30-59 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
60-89 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 90 Accruing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-accrual |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Installment and Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
30-59 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
60-89 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 90 Accruing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-accrual |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Lease Financing Receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
30-59 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
60-89 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 90 Accruing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-accrual |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Loans and Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
30-59 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
60-89 Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 90 Accruing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-accrual |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Past Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Total non-accrual loans without an allowance included $
Total non-accrual loans without an allowance included $
22
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
recognized $
The following table summarize the balance and activity within the allowance for credit losses - loans and leases, the components of the allowance for credit losses - loans and leases by loans and leases individually and collectively evaluated for impairment, and corresponding loan and lease balances by type for the periods presented:
June 30, 2025 |
|
Commercial |
|
|
Residential |
|
|
Construction, |
|
|
Commercial |
|
|
Installment |
|
|
Lease |
|
|
Total |
|
|||||||
Allowance for credit losses - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Three months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Beginning balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Adjustment for acquired PCD loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Provision/(recapture) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Charge-offs |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Recoveries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Ending balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Six months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Beginning balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Adjustment for acquired PCD loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Provision/(recapture) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Charge-offs |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Recoveries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Ending balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Ending balance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Individually evaluated |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Collectively evaluated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total allowance for credit losses - |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Loans and leases ending balance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Individually evaluated for |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Collectively evaluated for |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total loans and leases |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
23
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
The following table summarize the balance and activity within the allowance for credit losses - loans and leases, the components of the allowance for credit losses - loans and leases by loans and leases individually and collectively evaluated for impairment, loans acquired with deteriorated credit quality, and corresponding loan and lease balances by type for the periods presented:
June 30, 2024 |
|
Commercial |
|
|
Residential |
|
|
Construction, |
|
|
Commercial |
|
|
Installment |
|
|
Lease |
|
|
Total |
|
|||||||
Allowance for credit losses - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Three months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Beginning balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Provision/(recapture) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Charge-offs |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Recoveries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Ending balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Six months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Beginning balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Provision |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Charge-offs |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Recoveries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Ending balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Ending balance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Individually evaluated |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Collectively evaluated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total allowance for credit losses - |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Loans and leases ending balance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Individually evaluated for |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Collectively evaluated for |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total loans and leases |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
24
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
The Company increased the allowance for credit losses - loans and leases by $
For loans individually evaluated for impairment, the Company increased the allowance for credit losses - loans and leases by $
For loans and leases collectively evaluated for impairment, the allowance for credit losses increased by $
The increase in the allowance for credit losses - loans and leases was mainly due to the PCD adjustment related to the First Security acquisition, increases in the collectively assessed portfolio, growth in the loan and lease portfolio, and worsening macroeconomic conditions.
The following table presents loans to borrowers experiencing financial difficulty and with modified terms for the periods presented:
Three Months Ended |
|
Payment Delay |
|
|
Term Modification |
|
|
Total Modified by Class |
|
|
% of Class of Loans and Leases |
|
||||
Commercial and industrial |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
% |
||||
Total modified loans |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Six Months Ended |
|
Payment Delay |
|
|
Term Modification |
|
|
Total Modified by Class |
|
|
% of Class of Loans and Leases |
|
||||
Commercial and industrial |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
% |
||||
Total modified loans |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
% |
||||
The financial effect of the payment delay presented above reflects a six-month deferral of principal payments. The financial effect of the term modification presented above reflects a twelve month extension of maturity date and other miscellaneous term adjustments.
Three and Six Months Ended |
|
Term Modification |
|
|
Total Modified by Class |
|
|
% of Class of Loans and Leases |
|
|||
Commercial real estate |
|
$ |
|
|
$ |
|
|
|
% |
|||
Commercial and industrial |
|
|
|
|
|
|
|
|
% |
|||
Total loans and leases |
|
$ |
|
|
$ |
|
|
|
% |
|||
The financial effect of the loan modifications presented above for the three and six months ended June 30, 2024, reflects a three-months weighted average extension of maturity date.
The following table presents the amortized costs basis of loans that had a payment default as of the dates presented, and were modified in the twelve months prior to default:
25
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
June 30, 2025 |
|
Term Modification |
|
|
Combination Term Modification and Interest Rate Reduction |
|
|
Total Modified by Class |
|
|
% of Class of Loans and Leases |
|
||||
Commercial real estate |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
% |
||||
Commercial and industrial |
|
|
|
|
|
|
|
|
|
|
|
% |
||||
Total modified loans |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
June 30, 2024 |
|
Term Modification |
|
|
Combination Term Modification and Interest Rate Reduction |
|
|
Total Modified by Class |
|
|
% of Class of Loans and Leases |
|
||||
Commercial real estate |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
% |
||||
Total modified loans |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
% |
||||
Modified loans are either collectively assessed based on portfolio risk segment and risk rating or individually assessed for loans exceeding $
There was $
The following table presents the amortized cost basis of collateral-dependent loans and leases, which are individually evaluated to determine expected credit losses as of the dates presented:
June 30, 2025 |
|
Commercial Construction |
|
|
Residential Construction |
|
|
Non-owner Occupied Commercial |
|
|
Owner-Occupied Commercial |
|
|
Single Family Residence (1st Lien) |
|
|
Single Family Residence (2nd Lien) |
|
|
Business Assets |
|
|
Total |
|
||||||||
Commercial real estate |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Construction, land |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial and industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2024 |
|
Commercial Construction |
|
|
Residential Construction |
|
|
Non-owner Occupied Commercial |
|
|
Owner-Occupied Commercial |
|
|
Single Family Residence (1st Lien) |
|
|
Single Family Residence (2nd Lien) |
|
|
Business Assets |
|
|
Total |
|
||||||||
Commercial real estate |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial and industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
The following table presents the change in the balance of the allowance for credit losses - unfunded commitments as of the periods presented:
|
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Beginning balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Adjustment for acquired loans |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Provision/(recapture) for unfunded commitments |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Ending balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
26
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
Note 6—Servicing Assets
Activity for servicing assets and the related changes in fair value for the periods presented was as follows:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Beginning balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Additions, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Changes in fair value |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Ending balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Loans serviced for others are not included in the Condensed Consolidated Statements of Financial Condition. The unpaid principal balances of these loans serviced for others as of the dates presented were as follows:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
Loan portfolios serviced for: |
|
|
|
|
|
|
||
SBA guaranteed loans |
|
$ |
|
|
$ |
|
||
USDA guaranteed loans |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Loan servicing revenue totaled $
Loan servicing asset revaluation, which represents the changes in fair value of servicing assets, resulted in a downward valuation adjustment of $
The fair value of servicing rights is highly sensitive to changes in underlying assumptions. Changes in secondary market premiums and prepayment speed assumptions have the most significant impact on the fair value of servicing rights. Generally, as interest rates rise on variable rate loans, loan prepayments increase due to an increase in refinance activity, which may result in a decrease in the fair value of servicing assets. Measurement of fair value is limited to the conditions existing and the assumptions used as of a particular point in time, and those assumptions may change over time. Refer to Note 15—Fair Value Measurement for further details.
Note 7—Other Real Estate Owned
Other real estate owned ("OREO") is included in accrued interest receivable and other assets in the Company's Condensed Consolidated Statements of Financial Condition.
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Beginning balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Acquisitions of OREO through business combination |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net additions/(reductions) to OREO |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Proceeds from sales of OREO |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Gains on sales of OREO |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Valuation adjustments |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Ending balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
At June 30, 2025 and December 31, 2024, the balance of real estate owned did not include any foreclosed residential real estate properties recorded as a result of obtaining physical possession of the property.
27
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
At June 30, 2025 and December 31, 2024, there was $
There were
Note 8—Leases
The Company enters into leases in the normal course of business primarily for its banking facilities and branches. The Company’s operating leases have varying maturity dates through year end
Leases are classified at the lease commencement date. Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.
The following table summarizes the amount and balance sheet line item for our operating lease right-of-use asset and liability as of the dates presented:
|
|
Balance Sheet Line Item |
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||
Operating lease right-of-use asset |
|
Accrued interest receivable and other assets |
|
$ |
|
|
$ |
|
||
Operating lease liability |
|
Accrued interest payable and other liabilities |
|
|
|
|
|
|
||
The Company uses its incremental borrowing rate at lease commencement to calculate the present value of lease payments when the rate implicit in a lease is not known. The Company’s incremental borrowing rate is based on the Federal Home Loan Bank ("FHLB") regular advance rate, adjusted for the lease term and other factors. At June 30, 2025, the weighted average discount rate of operating leases was
The following table presents components of total lease costs included as a component of occupancy expense on the Condensed Consolidated Statements of Operations for the periods presented:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Operating lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Short-term lease cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Variable lease cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less: Sublease income |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total lease cost, net |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Operating cash flows paid for operating lease amounts included in the measure of lease liabilities were $
During the six months ended June 30, 2024, the Company recorded $
28
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
The future minimum lease payments for operating leases, subsequent to June 30, 2025, as recorded on the Condensed Consolidated Statements of Financial Condition, are summarized as follows:
|
|
Operating Lease |
|
|
Remainder of 2025 |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
Thereafter |
|
|
|
|
Total undiscounted lease payments |
|
|
|
|
Less: Imputed interest |
|
|
( |
) |
Net lease liabilities |
|
$ |
|
|
The total amount of minimum rentals to be received in the future on these subleases is approximately $
Note 9—Goodwill, Core Deposit Intangible and Other Intangible Assets
The following tables summarize the changes in the Company’s goodwill, core deposit intangible assets, and customer relationship intangible assets for the periods presented:
|
|
For the Three Months Ended June 30, |
|
|||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||||||||||
|
|
Goodwill |
|
|
Core |
|
|
Customer Relationship |
|
|
Goodwill |
|
|
Core |
|
|
Customer Relationship |
|
||||||
Beginning balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Additions |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
Amortization |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Ending balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Accumulated amortization |
|
N/A |
|
|
$ |
|
|
$ |
|
|
N/A |
|
|
$ |
|
|
$ |
|
||||||
Weighted average remaining |
|
N/A |
|
|
|
|
|
|
N/A |
|
|
|
|
|
||||||||||
|
|
For the Six Months Ended June 30, |
|
|||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||||||||||
|
|
Goodwill |
|
|
Core |
|
|
Customer Relationship |
|
|
Goodwill |
|
|
Core |
|
|
Customer Relationship |
|
||||||
Beginning balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Additions |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
Amortization |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Ending balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Accumulated amortization |
|
N/A |
|
|
$ |
|
|
$ |
|
|
N/A |
|
|
$ |
|
|
$ |
|
||||||
Weighted average remaining |
|
N/A |
|
|
|
|
|
|
N/A |
|
|
|
|
|
||||||||||
29
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
The Company added additional goodwill and core deposit intangible assets in conjunction with the First Security acquisition. Please refer to Note 3—Acquisition of a Business for further details.
The following table presents the estimated amortization expense for core deposit intangible and customer relationship intangible assets remaining at June 30, 2025:
|
|
Estimated |
|
|
Remainder of 2025 |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
|
Note 10—Income Taxes
The Company uses an estimated annual effective tax rate method in computing its interim tax provision. This effective tax rate is based on forecasted annual pre-tax income, permanent tax differences and statutory tax rates.
The effective tax rate for the six months ended June 30, 2025 and 2024 was
Net deferred tax assets increased to $
During the second quarter 2024, Illinois House Bill 4951 was enacted, which amends numerous Illinois tax law provisions, including a temporary limitation on Net Loss Deduction ("NLD") usage. For tax years 2024, 2025, and 2026, C Corporations are limited to applying a maximum of $
During July 2025, H.R. 1 was signed into law. The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic R&D expenditures, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense. These changes were not reflected in the income tax provision for the period ended June 30, 2025, as enactment occurred after the balance sheet date. The Company is currently evaluating the impact on future periods.
Note 11—Deposits
The composition of deposits was as follows as of the dates presented:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
Non-interest-bearing demand deposits |
|
$ |
|
|
$ |
|
||
Interest-bearing checking accounts |
|
|
|
|
|
|
||
Money market demand accounts |
|
|
|
|
|
|
||
Other savings |
|
|
|
|
|
|
||
Time deposits (below $250,000) |
|
|
|
|
|
|
||
Time deposits ($250,000 and above) |
|
|
|
|
|
|
||
Total deposits |
|
$ |
|
|
$ |
|
||
30
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
At June 30, 2025, the scheduled maturities of time deposits were:
|
|
Scheduled Maturities |
|
|
Remainder of 2025 |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
|
The Company hedges interest rates on certain money market accounts using interest rate swaps through which the Company receives variable amounts and pays fixed amounts. Refer to Note 16—Derivative Instruments and Hedge Activities for additional discussion.
Note 12—Other Borrowings
The following is a summary of the Company’s other borrowings as of the dates presented:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
Federal Home Loan Bank advances |
|
$ |
|
|
$ |
|
||
Securities sold under agreements to repurchase |
|
|
|
|
|
|
||
Term loan |
|
|
|
|
|
|
||
Line of credit |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Byline Bank has the capacity to borrow funds from the discount window of the Federal Reserve System. As of June 30, 2025 and December 31, 2024, there were
On January 17, 2024, the Company entered into a Letter Agreement with the FRB of Chicago that allowed the Bank to access the Bank Term Funding Program ("BTFP"). On January 22, 2024, the Company opened an advance of $
At June 30, 2025, the Company had one $
Securities sold under agreements to repurchase represent a demand deposit product offered to customers that sweep balances in excess of the Federal Deposit Insurance Corporation insurance limit into overnight repurchase agreements. The Company pledges securities as collateral for the repurchase agreements. Refer to Note 4—Securities for additional discussion.
31
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
On October 13, 2016, we entered into a $
On May 21, 2025, we entered into the Second Amendment to the Second Amended and Restated Term Loan and Revolving Credit Agreement with the lender, which is effective May 25, 2025, and provides for: (1) the renewal of the revolving line-of-credit facility of up to $
The variable term loan was paid in full in January 2025, and
The following table presents short-term credit lines, subject to collateral requirements, available for use as of the dates presented:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
Federal Home Loan Bank line |
|
$ |
|
|
$ |
|
||
Federal Reserve Bank of Chicago discount window line |
|
|
|
|
|
|
||
Available federal funds lines |
|
|
|
|
|
|
||
The Company hedges interest rates on borrowed funds using interest rate swaps through which the Company receives variable amounts and pays fixed amounts. Refer to Note 16—Derivative Instruments and Hedge Activities for additional discussion.
Note 13—Subordinated Notes and Junior Subordinated Debentures
Subordinated Notes
In 2020, the Company issued $
On August 7, 2025, the Company issued $
Junior subordinated debentures
Each of the junior subordinated debentures was issued to an underlying statutory trust (the "Trusts"), which issued trust preferred securities and used the proceeds from the issuance of the trust preferred securities to purchase the junior subordinated debentures of the Company. The debentures represent the sole asset of the Trusts. The Trusts are not consolidated with the Company. Accordingly, the Company reports the subordinated debentures held by the Trusts as liabilities. The Company owns all of the common securities of each trust and pays interest on each quarterly. The junior subordinated debentures qualify, and are treated as, Tier 1 regulatory capital of the Company subject to regulatory limitations. The trust preferred securities issued by each trust rank equally with the common securities in right of payment, except that if an event of
32
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
default under the indenture governing the notes has occurred and is continuing, the preferred securities will rank senior to the common securities in right of payment.
As of the dates presented, the Company’s junior subordinated debentures by issuance were as follows:
|
|
|
|
Aggregate Principal Amount |
|
|
|
|
|
|||||
Name of Trust |
|
Stated Maturity |
|
June 30, 2025 |
|
|
December 31, 2024 |
|
|
Contractual Rate June 30, 2025 |
|
Interest Rate Spread(1) |
||
Metropolitan Statutory Trust I(2) |
|
|
$ |
|
|
$ |
|
|
|
|||||
First Evanston Bancorp Trust I(3) |
|
|
|
|
|
|
|
|
|
|||||
AmeriMark Capital Trust I(4) |
|
|
|
|
|
|
|
|
|
|||||
Inland Bancorp Trust II(4) |
|
|
|
|
|
|
|
|
|
|||||
Inland Bancorp Trust III(4) |
|
|
|
|
|
|
|
|
|
|||||
Inland Bancorp Trust IV(4) |
|
|
|
|
|
|
|
|
|
|||||
Inland Bancorp Trust V(4) |
|
|
|
|
|
|
|
|
|
|||||
Total liability, at par |
|
|
|
|
|
|
|
|
|
|
|
|
||
Discount |
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Total liability, at carrying value |
|
|
|
$ |
|
|
$ |
|
|
|
|
|
||
(1)
(2)
(3)
(4)
Note 14—Commitments and Contingent Liabilities
Legal contingencies—In the ordinary course of business, the Company and Bank have various outstanding commitments and contingent liabilities that are not recognized in the accompanying consolidated financial statements. In addition, the Company may be a defendant in certain claims and legal actions arising in the ordinary course of business. In the opinion of management, after consultation with legal counsel, the ultimate disposition of these matters is currently not expected to have a material adverse effect on the Company’s Consolidated Financial Statements.
Operating lease commitments—Refer to Note 8—Leases for discussion of operating lease commitments.
Commitments to extend credit—The Company is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Condensed Consolidated Statements of Financial Condition. The contractual or notional amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.
The Company’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit and letters of credit is represented by the contractual or notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for funded instruments. The Company does not anticipate any material losses as a result of the commitments and letters of credit. Refer to Note 5—Loans and Lease Receivables and Allowance for Credit Losses for additional discussion on the reserve for unfunded commitments.
The following table summarizes the contract or notional amount of outstanding loan and lease commitments at the dates presented:
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||||||||||
|
|
Fixed Rate |
|
|
Variable Rate |
|
|
Total |
|
|
Fixed Rate |
|
|
Variable Rate |
|
|
Total |
|
||||||
Commitments to extend credit |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Letters of credit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is
33
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
based on management’s credit evaluation of the counterparty. Collateral is primarily obtained in the form of commercial and residential real estate (including income producing commercial properties).
Letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, bond financing and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.
Commitments to make loans are generally made for periods of
Note 15—Fair Value Measurement
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In addition, the Company has the ability to obtain fair values for markets that are not accessible.
These types of inputs create the following fair value hierarchy:
Level 1—Quoted prices in active markets for identical assets or liabilities.
Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available. The Company’s own data used to develop unobservable inputs may be adjusted for market considerations when reasonably available.
The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to assets and liabilities.
The Company used the following methods and significant assumptions to estimate fair value for certain assets measured and carried at fair value on a recurring basis:
Securities available-for-sale—The Company obtains fair value measurements from an independent pricing service. Management reviews the procedures used by the third party, including significant inputs used in the fair value calculations. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. When market quotes are not readily accessible or available, alternative approaches are utilized, such as matrix or model pricing.
The Company’s methodology for pricing non-rated bonds focuses on three distinct inputs: equivalent rating, yield and other pricing terms. To determine the rating for a given non-rated municipal bond, the Company references a publicly issued bond by the same issuer if available as well as other additional key metrics to support the credit worthiness. Typically, pricing for these types of bonds would require a higher yield than a similar rated bond from the same issuer. A reduction in price is applied to the rating obtained from the comparable bond, as the Company believes if liquidated, a non-rated bond would be valued less than a similar bond with a verifiable rating. The reduction applied by the Company is one notch lower (i.e. a "AA" rating for a comparable bond would be reduced to "AA-" for the Company’s valuation). In 2025 and 2024, all of the ratings derived by the Company were "BBB-" or better with and without comparable bond proxies. All of the ratings of non-Agency backed bonds derived by the Company were investment grade. The fair value measurement of municipal bonds is sensitive to the rating input, as a higher rating typically results in an increased valuation. The remaining pricing inputs used in the bond valuation are observable. Based on the rating determined, the Company obtains a corresponding current market yield curve available to market participants. Other terms including coupon, maturity date, redemption price, number of coupon payments per year, and accrual method are obtained from the individual bond term sheets.
Equity and other securities—The Company utilizes the same fair value measurement methodology for equity and other securities as detailed in the securities available-for-sale portfolio above. The fair value of equity securities subject to
34
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
contractual sale restrictions is measured on the basis of the market price of similar unrestricted equity securities. The fair value is only adjusted for the effect of the restrictions when the restriction of the sale is a characteristic of the equity itself and not based on the holder of the security.
Servicing assets—Fair value is based on a loan-by-loan basis taking into consideration the original term to maturity, the current age of the loan and the remaining term to maturity. The valuation methodology utilized for the servicing assets begins with generating estimated future cash flows for each servicing asset, based on their unique characteristics and market-based assumptions for prepayment speeds and costs to service. The present value of the future cash flows are then calculated utilizing market-based discount rate assumptions.
Derivative instruments—Interest rate derivatives are valued by a third party, using models that primarily use market observable inputs, such as yield curves, and are validated by comparison with valuations provided by the respective counterparties. Derivative financial instruments are included in accrued interest receivable and other assets, and accrued interest payable and other liabilities in the Condensed Consolidated Statements of Financial Condition.
The following tables summarize the Company’s financial assets and liabilities that were measured at fair value on a recurring basis at the dates presented:
|
|
|
|
|
Fair Value Measurements Using |
|
||||||||||
June 30, 2025 |
|
Fair Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Securities available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury Notes |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
U.S. Government agencies |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Obligations of states, municipalities, and political |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Mortgage-backed securities; residential |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Agency |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Non-Agency |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Mortgage-backed securities; commercial |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Agency |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Corporate securities |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Asset-backed securities |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Equity and other securities, at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mutual funds |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Equity securities |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
Servicing assets |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|||
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|||
35
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
|
|
|
|
|
Fair Value Measurements Using |
|
||||||||||
December 31, 2024 |
|
Fair Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Securities available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury Notes |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
U.S. Government agencies |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Obligations of states, municipalities, and political |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Mortgage-backed securities; residential |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Agency |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Non-Agency |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Mortgage-backed securities; commercial |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Agency |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Corporate securities |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Asset-backed securities |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Equity and other securities, at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mutual funds |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Equity securities |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
Servicing assets |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|||
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|||
The following table presents additional information about financial assets measured at fair value on recurring basis for which the Company used significant unobservable inputs (Level 3):
|
Six Months Ended June 30, |
|
|||||||||||||
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
Investment Securities |
|
|
Servicing Assets |
|
||||||||||
Balance, beginning of period |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Additions, net |
|
|
|
|
|
|
|
|
|
|
|
||||
Change in fair value |
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Balance, end of period |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Company did
The following table presents additional information about the unobservable inputs used in the fair value measurements on recurring basis that were categorized within Level 3 of the fair value hierarchy as of June 30, 2025:
Financial Instruments |
|
Valuation Technique |
|
Unobservable Inputs |
|
Range of |
|
Weighted |
|
|
Impact to |
|
Single issuer trust preferred |
|
Discounted cash flow |
|
|
|
|
% |
|
||||
|
Discounted cash flow |
|
Prepayment speeds |
|
|
|
% |
|
||||
|
|
|
|
Discount rate |
|
|
|
% |
|
|||
|
|
|
|
Expected weighted |
|
|
|
|
||||
The Company used the following methods and significant assumptions to estimate fair value for certain assets measured and carried at fair value on a
Individually evaluated loans—The Company individually evaluates loans that do not share similar risk characteristics, including non-accrual loans. Specific allowance for credit losses is measured based on a discounted cash flow of ongoing operations, discounted at the loan's original effective interest rate, or a calculation of the fair value of the underlying
36
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
collateral less estimated selling costs. Valuations of individually assessed loans that are collateral dependent are supported by third party appraisals in accordance with the Bank's credit policy. Accordingly, individually evaluated loans are classified as Level 3.
Assets held for sale—Assets held for sale consist of former branch locations and real estate previously purchased for expansion. Assets are considered held for sale when management has approved to sell the assets following a branch closure or other events. The properties are being actively marketed and transferred to assets held for sale based on the lower of carrying value or its fair value, less estimated costs to sell. The Company records assets held for sale on the Condensed Consolidated Statements of Financial Condition within accrued interest receivable and other assets.
Other real estate owned—Certain assets held within other real estate owned represent real estate or other collateral that has been adjusted to its estimated fair value, less cost to sell, as a result of transferring from the loan portfolio at the time of foreclosure or repossession and based on management’s periodic impairment evaluation. From time to time, non-recurring fair value adjustments to other real estate owned are recorded to reflect partial write-downs based on an observable market price or current appraised value of property.
|
|
|
|
|
Fair Value Measurements Using |
|
||||||||||
June 30, 2025 |
|
Fair Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Non-recurring |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Individually evaluated loans |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial real estate |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Residential real estate |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Construction, land development, and other land |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Commercial and industrial |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Assets held for sale |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Other real estate owned |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
|
|
|
|
|
Fair Value Measurements Using |
|
||||||||||
December 31, 2024 |
|
Fair Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Non-recurring |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Individually evaluated loans |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial real estate |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Residential real estate |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Commercial and industrial |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Assets held for sale |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Other real estate owned |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
The following methods and assumptions were used by the Company in estimating fair values of other assets and liabilities for disclosure purposes:
Cash and cash equivalents and interest bearing deposits with other banks—For these short-term instruments, the carrying amount is a reasonable estimate of fair value.
Securities held-to-maturity—The Company obtains fair value measurements from an independent pricing service. Management reviews the procedures used by the third party, including significant inputs used in the fair value calculations. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. When market quotes are not readily accessible or available, alternative approaches are utilized, such as matrix or model pricing.
Restricted stock—The fair value has been determined to approximate cost.
Loans held for sale—The fair value of loans held for sale are based on quoted market prices, where available, and determined by discounted estimated cash flows using interest rates approximating the Company’s current origination rates for similar loans adjusted to reflect the inherent credit risk.
37
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
Loan and lease receivables, net—For certain variable rate loans that reprice frequently and with no significant changes in credit risk, fair value is estimated at carrying value. The fair value of other types of loans is estimated using an exit price notion. It is estimated by discounting future cash flows, using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.
Deposits—The fair value of demand deposits, savings accounts, and certain money market deposits is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated by discounting future cash flows, using rates currently offered for deposits of similar remaining maturities.
Federal Home Loan Bank advances—The fair value of FHLB advances is estimated by discounting the agreements based on maturities using rates currently offered for FHLB advances of similar remaining maturities adjusted for prepayment penalties that would be incurred if the borrowings were paid off on the measurement date.
Securities sold under agreements to repurchase—The carrying amount approximates fair value due to maturities of less than ninety days.
Term Loan—The carrying amount approximates fair value given the variable interest rate and repricing of interest.
Subordinated notes—The fair value is based on available market prices.
Junior subordinated debentures—The fair value of junior subordinated debentures, in the form of trust preferred securities, is determined using rates currently available to the Company for debt with similar terms and remaining maturities.
Accrued interest receivable and payable—The carrying amount approximates fair value.
Commitments to extend credit and letters of credit—The fair values of these off-balance sheet commitments to extend credit and commercial and letters of credit are not considered practicable to estimate because of the lack of quoted market prices and the inability to estimate fair value without incurring excessive costs.
The estimated fair values of financial instruments not carried at fair value and levels within the fair value hierarchy are as follows:
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|||||||||||
|
|
Fair Value |
|
|
2025 |
|
|
2024 |
|
|||||||||||
|
|
Hierarchy |
|
|
Carrying |
|
|
Estimated |
|
|
Carrying |
|
|
Estimated |
|
|||||
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and due from banks |
|
|
1 |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest bearing deposits with other banks |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Securities held-to-maturity |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Restricted stock |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loans held for sale |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loans and lease receivables, net (less individually |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accrued interest receivable |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-interest-bearing deposits |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest-bearing deposits |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accrued interest payable |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Federal Home Loan Bank advances |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Securities sold under repurchase agreement |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Term loan |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subordinated notes |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Junior subordinated debentures |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
38
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
Note 16—Derivative Instruments and Hedge Activities
As required by ASC 815, the Company records all derivatives on the Condensed Consolidated Statements of Financial Condition at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. The Company records derivative assets and derivative liabilities on the Condensed Consolidated Statements of Financial Condition within accrued interest receivable and other assets and accrued interest payable and other liabilities, respectively.
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||||||||||
|
|
|
|
|
Fair Value |
|
|
|
|
|
Fair Value |
|
||||||||||||
|
|
Notional |
|
|
Other |
|
|
Other |
|
|
Notional |
|
|
Other |
|
|
Other |
|
||||||
Derivatives designated as hedging instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swaps designated as cash flow |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|||||
Interest rate swaps designated as fair value hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivatives not designated as hedging instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other interest rate derivatives |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||||
Other credit derivatives |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||||
Total derivatives |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||||
Interest rate swaps designated as cash flow hedges—Cash flow hedges of interest payments associated with certain financial instruments had notional amounts totaling $
As of June 30, 2025, pay-fixed interest rate swaps are comprised of five effective hedges. The receive-fixed interest rate swaps are comprised of four effective hedges with notional amounts comprised of $
For derivatives designated and that qualify as cash flow hedges of interest rate risk, the unrealized gain or loss on the derivatives is recorded in accumulated other comprehensive income (loss) and subsequently reclassified into interest income or expense in the same period during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest income or expense as interest payments are made on the hedged instruments. Interest recorded on these swap transactions included $
Accumulated other comprehensive income (loss) also includes the amortization of the remaining balance related to terminated interest rate swaps designated as cash flow hedges, which are over the original life of the cash flow hedge. In March 2023, the Company terminated interest rate swaps designated as cash flow hedges totaling $
39
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
The following table reflects the cash flow hedges as of June 30, 2025:
Notional amounts |
|
$ |
|
|
Derivative assets fair value |
|
|
|
|
Derivative liabilities fair value |
|
|
|
|
Weighted average remaining maturity |
|
|
||
Receive rates are determined at the time the swaps become effective. As of June 30, 2025, the weighted average pay rates of the five effective pay-fixed hedges for $
The following table reflects the net gains (losses) recorded in accumulated other comprehensive income (loss) and the Condensed Consolidated Statements of Operations relating to the cash flow and fair value derivative instruments for the periods presented:
|
|
June 30, 2025 |
|
|
June 30, 2024 |
|
||||||||||||||||||
|
|
Amount of |
|
|
Amount of |
|
|
Amount of |
|
|
Amount of |
|
|
Amount of |
|
|
Amount of |
|
||||||
Interest rate swaps - three months ended |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Interest rate swaps - six months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swaps designated as fair value hedges—A fair value hedge associated with certain fixed-rate investment securities had notional amounts totaling $
The following table reflects the fair value hedge as of June 30, 2025:
Notional amounts |
|
$ |
|
|
Derivative assets fair value |
|
|
|
|
Derivative liabilities fair value |
|
|
|
|
Weighted average remaining maturity |
|
|
||
At June 30, 2025, the amortized cost basis of the closed portfolios of available-for-sale securities used in this hedging relationship was $
Other interest rate derivatives—Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate movements and other identified risks but do not meet the strict hedge accounting requirements and/or the Company has not elected to apply hedge accounting. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings.
The total combined notional amount was $
40
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
These instruments are inherently subject to market risk and credit risk. Market risk is associated with changes in interest rates and credit risk relates to the Company’s risk of loss when the counterparty to a derivative contract fails to perform according to the terms of the agreement. Market and credit risks are managed and monitored as part of the Company’s overall asset-liability management process. The credit risk related to derivatives entered into with certain qualified borrowers is managed through the Company’s loan underwriting process. The Company’s loan underwriting process also approves the Bank’s swap counterparty used to mirror the borrowers’ swap. The Company has a bilateral agreement with each swap counterparty that provides that fluctuations in derivative values are to be fully collateralized with either cash or securities.
The following table reflects other interest rate derivatives as of June 30, 2025:
Notional amounts |
|
$ |
|
|
Derivative assets fair value |
|
|
|
|
Derivative liabilities fair value |
|
|
|
|
Weighted average pay rates |
|
|
% |
|
Weighted average receive rates |
|
|
% |
|
Weighted average remaining maturity |
|
|
||
Other derivatives—The Company has entered into risk participation agreements with counterparty banks to assume a portion of the credit risk related to borrower transactions. As of June 30, 2025 and December 31, 2024, the notional amount of risk participated in was $
The Company has agreements with its derivative counterparties that contain a cross-default provision under which if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. The Company also has agreements with certain derivative counterparties that contain a provision where if the Company fails to maintain its status as a well or adequately capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations resulted in a net asset position.
The following table reflects amounts included in non-interest income in the Condensed Consolidated Statements of Operations relating to derivative instruments that are not designated in a hedging relationship for the periods presented:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Other interest rate derivatives |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Other credit derivatives |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
41
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
The Company records interest rate derivatives subject to master netting agreements at their gross value and does not offset derivative asset and liabilities on the Condensed Consolidated Statements of Financial Condition.
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||
|
|
Derivative |
|
|
Derivative |
|
|
Derivative |
|
|
Derivative |
|
||||
Gross amounts recognized |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Less: Amounts offset in the Condensed Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net amount presented in the Condensed Consolidated |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Gross amounts not offset in the Condensed Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Offsetting derivative positions |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Collateral posted |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Net credit exposure |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
As of June 30, 2025, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $
Note 17 – Share-Based Compensation
In June 2017, the Company's Board of Directors adopted, and the Company's stockholder approved, the 2017 Omnibus Incentive Compensation Plan (the "Omnibus Plan"). The Omnibus Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights and other equity-based, equity-related or cash-based awards. A total of
The Company primarily grants time-based restricted share awards that vest over a to
During 2025, the Company granted
The following table discloses the changes in restricted shares for the six months ended June 30, 2025:
|
|
Omnibus Plan |
|
|||||
|
|
Number of Shares |
|
|
Weighted Average |
|
||
Beginning balance, January 1, 2025 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Incremental performance shares issued and vested |
|
|
|
|
|
|
||
Vested |
|
|
( |
) |
|
|
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
Ending balance outstanding at June 30, 2025 |
|
|
|
|
$ |
|
||
42
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
A total of
The Company recognizes share-based compensation based on the estimated fair value of the restricted stock at the grant date. Share-based compensation expense is included in non-interest expense in the Condensed Consolidated Statements of Operations.
|
|
Performance Based Grants |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Risk-free interest rate |
|
|
% |
|
|
% |
||
Expected term (years) |
|
|
|
|
||||
Expected stock price volatility |
|
|
|
|
||||
Weighted average grant date fair value |
|
$ |
|
|
$ |
|
||
|
|
Six Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Total share-based compensation - restricted stock |
|
$ |
|
|
$ |
|
||
Income tax benefit |
|
|
|
|
|
|
||
Unrecognized compensation expense |
|
|
|
|
|
|
||
Weighted average remaining amortization period |
|
|
|
|
||||
The fair value of the unvested restricted stock awards at June 30, 2025 was $
In October 2014, the Company adopted the Byline Bancorp, Inc. Equity Incentive Plan ("BYB Plan"). The maximum number of shares available for grants under this plan was
The types of stock options granted under the BYB Plan were Time Options and Performance Options. The exercise price of each option was equal to the fair value of the stock as of the date of grant. These option awards had vesting periods ranging from to
The fair values of the stock options were determined using the Black-Scholes-Merton model for Time Options and a Monte Carlo simulation model for Performance Options.
The following table discloses the activity in shares subject to options and the weighted average exercise prices, in actual dollars, for the six months ended June 30, 2025:
|
|
BYB Plan |
|
|||||||||||||
|
|
Number of Shares |
|
|
Weighted Average Exercise Price |
|
|
Intrinsic |
|
|
Weighted Average Remaining Contractual Term (in Years) |
|
||||
Beginning balance, January 1, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
|
|
||||
Exercised |
|
|
( |
) |
|
|
|
|
$ |
|
|
|
|
|||
Expired |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Ending balance outstanding at June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
|
— |
|
|||
Exercisable at June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
|
— |
|
|||
A total of
43
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
were $
Pursuant to the terms of the Agreement and Plan of Merger with First Evanston and its subsidiaries, dated as of November 27, 2017 (the "First Evanston Merger Agreement"), each outstanding First Evanston option held by a participant in the First Evanston Bancorp, Inc. Stock Incentive Plan (the "FEB Plan") ceased to represent a right to acquire shares of First Evanston common stock and was assumed and converted automatically into a fully vested and exercisable adjusted option to purchase shares of Byline common stock (each an "Adjusted Option"). In accordance with the First Evanston Merger Agreement, the number of shares of Byline common stock to which each such Adjusted Option relates is equal to the product (rounded down to the nearest whole share of Byline common stock) of: (a) the number of shares of First Evanston common stock subject to the First Evanston option immediately prior to May 31, 2018, multiplied by (b)
The following table discloses the activity in shares subject to options under the FEB Plan and the weighted average exercise prices, in actual dollars, for the six months ended June 30, 2025:
|
|
FEB Plan |
|
|||||||||||||
|
|
Number of Shares |
|
|
Weighted Average Exercise Price |
|
|
Intrinsic |
|
|
Weighted Average Remaining Contractual Term (in Years) |
|
||||
Beginning balance, January 1, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
|
|
||||
Exercised |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Expired |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Ending balance outstanding at June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
|
|
||||
Exercisable at June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
|
|
||||
Under the FEB plan,
Note 18—Earnings per Share
A reconciliation of the numerators and denominators for earnings per common share computations is presented below. Incremental shares represent outstanding stock options for which the exercise price is less than the average market price of the Company’s common stock during the periods presented. Options to purchase
The following represent the calculation of basic and diluted earnings per share for the periods presented:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Weighted-average common stock outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average common stock outstanding (basic) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Incremental shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average common stock outstanding (dilutive) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings per common share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Diluted earnings per common share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
44
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
Note 19—Stockholders’ Equity
A summary of the Company’s preferred and common stock at the dates presented is as follows:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
Preferred stock |
|
|
|
|
|
|
||
Par value |
|
$ |
|
|
$ |
|
||
Shares authorized |
|
|
|
|
|
|
||
Shares issued |
|
|
|
|
|
|
||
Shares outstanding |
|
|
|
|
|
|
||
Common stock, voting |
|
|
|
|
|
|
||
Par value |
|
$ |
|
|
$ |
|
||
Shares authorized |
|
|
|
|
|
|
||
Shares issued |
|
|
|
|
|
|
||
Shares outstanding |
|
|
|
|
|
|
||
Treasury shares |
|
|
|
|
|
|
||
On December 6, 2023, we announced that our Board of Directors approved a stock repurchase program authorizing the purchase of up to an aggregate of
On December 5, 2024, we announced that our Board of Directors approved a new stock repurchase program authorizing the purchase of up to an aggregate of
We purchased
On April 1, 2025 we issued
On June 12, 2025, the Estate of Daniel L. Goodwin (the "Estate") and Equity Shares Investors, LLC, an affiliate of the Estate (the "Selling Stockholders"), completed their sale of
The Company did not receive any proceeds from the sale of the Shares by the Selling Stockholders. In addition, the Company purchased
Repurchased shares are recorded as treasury shares on the trade date using the treasury stock method, and the cash paid is recorded as treasury stock. Treasury stock acquired is recorded at cost and is carried as a reduction of stockholders’ equity in the Condensed Consolidated Statements of Financial Condition.
For the three months ended June 30, 2025 and 2024, cash dividends were declared and paid to stockholders of record of our common stock of $
45
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
Note 20—Consolidated Statements of Changes in Accumulated Other Comprehensive Income (Loss)
The following table summarizes the changes in accumulated other comprehensive income (loss) for the dates presented:
(dollars in thousands) |
|
Unrealized Gains (Losses) |
|
|
Unrealized Gains (Losses) |
|
|
Total Accumulated |
|
|||
Balance March 31, 2024 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Other comprehensive loss, net of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance, June 30, 2024 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|||
Balance, January 1, 2024 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Other comprehensive loss, net of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance, June 30, 2024 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|||
Balance, March 31, 2025 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Other comprehensive income (loss), net of tax |
|
|
( |
) |
|
|
|
|
|
|
||
Balance, June 30, 2025 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|||
Balance, January 1, 2025 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Other comprehensive income (loss), net of tax |
|
|
( |
) |
|
|
|
|
|
|
||
Balance, June 30, 2025 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Note 21—Segment Information
The Company has
The Company’s chief operating decision makers are the .
46
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
The accounting policies of the banking operations are the same as those described in Note 1–Business and Summary of Significant Accounting Policies. Additional information about these policies can be found in Note 1 of our audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024, which we filed with the SEC on February 28, 2025. All operations are domestic.
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Interest and dividend income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Reconciliation of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total consolidated revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Segment net interest income and noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Provision for credit losses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Salaries and employee benefits |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Data processing |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other segment items(1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Segment net income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reconciliation of profit or loss: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustments and reconciling items |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consolidated net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reconciliation of assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total assets for reportable segment |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Adjustments and reconciling items |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total consolidated assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
47
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following is a discussion and analysis of Byline Bancorp, Inc.’s financial condition and results of operations and should be read in conjunction with our Unaudited Interim Condensed Consolidated Financial Statements and notes thereto included elsewhere in this report. The words "the Company," "we," "Byline," "management," "our" and "us" refer to Byline Bancorp, Inc. and its consolidated subsidiaries, unless we indicate otherwise. In addition to historical information, this discussion contains forward looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the sections entitled "Special Note Regarding Forward Looking Statements" and "Risk Factors". Byline assumes no obligation to update any of these forward looking statements.
Forward-Looking Statements
Statements contained in this report and in other documents we file with or furnish to the Securities and Exchange Commission ("SEC") that are not historical facts may constitute "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Any statements about our expectations, beliefs, plans, strategies, predictions, forecasts, objectives or assumptions of future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as "anticipates," "believes," "expects," "can," "could," "may," "predicts," "potential," "opportunity," "should," "will," "estimate," "plans," "projects," "continuing," "ongoing," "expects," "seeks," "intends" and similar words or phrases. Accordingly, these statements involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual strategies, actions or results to differ materially from those expressed in such statements, and are not guarantees of future results or other events or performance. Because forward-looking statements are necessarily only estimates of future strategies, actions or results, based on management’s current expectations, assumptions and estimates on the date hereof, and there can be no assurance that actual strategies, actions or results will not differ materially from expectations, readers are cautioned not to place undue reliance on such statements.
Our ability to predict results or the actual effects of future plans, strategies or events is inherently uncertain. Factors which could cause actual results or conditions to differ materially from those reflected in forward-looking statements include:
48
These risks and uncertainties should be considered in evaluating any forward-looking statements, and undue reliance should not be placed on such statements. Forward looking statements speak only as of the date they are made. You should also consider the risks, assumptions and uncertainties set forth in the "Risk Factors" section in our Annual Report on Form 10-K for the year ended December 31, 2024 that was filed with the SEC on February 28, 2025, as well as those set forth in the reports we file with the SEC. We assume no obligation to update any of these statements in light of new information, future events or otherwise unless required under the federal securities laws.
Overview
Our Business
We are a bank holding company headquartered in Chicago, Illinois, and conduct all our business activities through our subsidiary, Byline Bank, a full service commercial bank, and Byline Bank’s subsidiaries. Through Byline Bank, we offer a broad range of banking products and services to small and medium sized businesses, commercial real estate and financial sponsors and to consumers who generally live or work near our branches. We also offer online account opening to consumer and business customers through our website and provide trust and wealth management services to our customers. In addition to our traditional commercial banking business, we provide small ticket equipment leasing solutions through Byline Financial Group, a wholly-owned subsidiary of Byline Bank, headquartered in Bannockburn, Illinois, with sales offices in Illinois, and sales representatives in Illinois, Michigan, and New York. We participate in U.S. government guaranteed lending programs and originate U.S. government guaranteed loans. Byline Bank is a leading originator of SBA loans and was the most active 7(a) lender in Illinois for the fiscal year ended June 30, 2025.
Our results of operations depend substantially on net interest income, which is the difference between interest income on interest-earning assets, consisting primarily of interest income on loans and lease receivables, including accretion income on loans, investment securities and other short-term investments, and interest expense on interest-bearing liabilities, consisting primarily of deposits and borrowings. Our results of operations are also dependent upon our generation of non-interest income, consisting primarily of income from fees and service charges on deposits, loan servicing revenue, wealth management and trust income, ATM and interchange fees, and net gains on sales of investment securities and loans. Other factors contributing to our results of operations include our provision for credit losses, provision for income taxes, and non-interest expenses, such as salaries and employee benefits, occupancy and equipment expenses, and other miscellaneous operating costs.
First Security Bancorp, Inc. Acquisition
On April 1, 2025, we completed our acquisition (the "First Security acquisition") of First Security Bancorp, Inc. ("First Security") under the terms of a definitive merger agreement. As a result of the merger, First Security's wholly-owned bank subsidiary, First Security Trust and Savings Bank, was merged with and into Byline Bank. Refer to Note 3—Acquisition of a Business for additional discussion.
Critical Accounting Policies and Significant Estimates
Our accounting and reporting policies conform to accounting principles generally accepted in the United States of America ("GAAP") and to general practices within the banking industry. To prepare financial statements and interim financial statements in conformity with GAAP, management makes estimates, assumptions and judgments based on available information. These estimates, assumptions and judgments affect the amounts reported in the financial statements and accompanying notes, which are based on information available as of the date of the financial statements. As this information changes, actual results could differ from the estimates, assumptions and judgments
49
reflected in the financial statements. In particular, management has identified several accounting policies that, due to the estimates, assumptions and judgments inherent in those policies, are critical in understanding our financial statements.
These critical accounting policies and estimates include (i) determination of the allowance for credit losses, (ii) the valuation of intangible assets such as goodwill, and assessment of impairment, (iii) fair value estimations, and (iv) the determination and assessment of impairment for other intangible assets.
The following is a discussion of the critical accounting policies and significant estimates that require us to make complex and subjective judgments. Additional information about these policies can be found in Note 1 of our audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024, which we filed with the SEC on February 28, 2025.
Allowance for credit losses
The allowance for credit losses ("ACL") represents management’s estimate of current expected credit losses over the life of a financial asset carried at amortized cost at an appropriate level based upon management’s evaluation of the adequacy of collectively and individually evaluated loss reserves.
The ACL is maintained at a level that management believes is appropriate to provide for current expected credit losses as of the dates of the Consolidated Statements of Financial Condition, and we have established methodologies for the determination of its adequacy. The methodologies are set forth in a formal policy and take into consideration relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. We increase our ACL by recording provisions for current expected credit losses against our income and decrease by charge‑offs, net of recoveries.
The evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. While management uses available information to recognize losses on loans and leases, changes in economic or other conditions may necessitate revision of the estimate in future periods.
For each portfolio, management estimates expected credit losses over the life of each loan and lease utilizing lifetime or cumulative loss rate methodology. The lifetime loss rates are estimated by analyzing a combination of internal and external data related to historical performance of each loan and lease pool over a complete economic cycle. Loss rates are based on historical averages for each loan and lease pool, adjusted to reflect the impact of a forward-looking forecast of certain macroeconomic variables, primarily unemployment rates, which management considers to be both reasonable and supportable. Various economic scenarios are considered and weighted to arrive at the forecast that most reflects management’s expectation of future conditions. After a one-year forecast period, a one-year reversion period adjusts loss experience to the historical average on a straight-line basis.
Management also considers qualitative risk factor adjustments that are intended to capture internal and external trends not reflected in historical loss history. Each risk factor is assigned an allowance level based on management’s judgment as to the expected impact of each risk factor on each loan and lease portfolio and is monitored quarterly. All loans and leases of $500,000 or greater with an internal risk rating of substandard or below, or on nonaccrual status, are individually evaluated for impairment on a quarterly basis.
The Company also maintains an allowance for credit losses on off-balance sheet credit exposures for unfunded loan commitments. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life based on management’s consideration of past events, current conditions, and reasonable and supportable economic forecasts. Management tracks the level and trends in unused commitments and takes into consideration the same factors as those considered for purposes of the allowance for credit losses on outstanding loans.
Goodwill
Goodwill represents the excess of the purchase consideration over the fair value of net assets acquired in connection with our recapitalization and acquisitions using the acquisition method of accounting. Goodwill is not amortized but is periodically evaluated for impairment under the provisions of ASC Topic 350, Intangibles—Goodwill and Other ("ASC 350").
Impairment testing is performed using either a qualitative or quantitative approach at the reporting unit level. Our goodwill is allocated to Byline Bank, which is our only applicable reporting unit for the purposes of testing goodwill for impairment. We have selected November 30 as the date to perform the annual goodwill impairment test. Additionally, we perform a goodwill impairment evaluation on an interim basis when events or circumstances indicate impairment potentially exists.
Other intangible assets
Other intangible assets primarily consist of core deposit intangible assets and customer relationship intangible. In valuing intangible assets, we consider variables such as servicing costs, attrition rates and market discount rates. Intangible assets are reviewed annually, or more frequently when events or changes in circumstances occur that indicate that their carrying values may not be recoverable. If the recoverable amount of the intangible asset is determined to be less than its carrying value, we would then measure the amount of impairment based on an estimate of the fair value at that time. We also evaluate whether the events or circumstances have occurred that warrant a revision to the remaining useful lives of intangible assets. In cases where a revision is deemed appropriate, the remaining carrying amounts of the
50
intangible assets are amortized over the revised remaining useful life. Core deposit intangibles are currently amortized over an approximate ten-year period and customer intangibles are amortized over a twelve-year period.
Fair value of Financial Instruments
ASC Topic 820, Fair Value Measurement, defines fair value as the price that would be received to sell a financial asset or paid to transfer a financial liability in an orderly transaction between market participants at the measurement date.
The degree of management judgment involved in determining the fair value of assets and liabilities is dependent upon the availability of quoted market prices or observable market parameters. For financial instruments that trade actively and have quoted market prices or observable market parameters, there is minimal subjectivity involved in measuring fair value. When observable market prices and parameters are not available, management judgment is necessary to estimate fair value. In addition, changes in market conditions may reduce the availability of quoted prices or observable data. For example, reduced liquidity in the capital markets or changes in secondary market activities could result in observable market inputs becoming unavailable. Therefore, when market data is not available, we would use valuation techniques requiring more management judgment to estimate the appropriate fair value measurement.
See Note 15 of our Unaudited Interim Condensed Consolidated Financial Statements as of June 30, 2025, included in this report, for a complete discussion of our use of fair value of financial assets and liabilities and their related measurement practices.
Recently Issued Accounting Pronouncements
Refer to Note 2 of our Unaudited Interim Condensed Consolidated Financial Statements as of June 30, 2025, which is included in this report, for a description of recent accounting pronouncements, including the effective dates of adoption and anticipated effects on our results of operations and financial condition.
Primary Factors Used to Evaluate Our Business
As a financial institution, we manage and evaluate various aspects of both our results of operations and our financial condition. We evaluate the levels and trends of the line items included in our consolidated financial statements as well as various financial ratios that are commonly used in our industry. We analyze these ratios and financial trends against our own historical performance, our budgeted performance, and the final condition and performance of comparable financial institutions in our region. Comparison of our financial performance against other financial institutions is impacted by the accounting for acquired non‑credit-deteriorated and purchased credit deteriorated loans.
Results of Operations
Overview
Our results of operations depend substantially on net interest income, which is the difference between interest income on interest-earning assets, consisting primarily of interest income on loans and lease receivables, including accretion income on loans, investment securities and other short-term investments, and interest expense on interest-bearing liabilities, consisting primarily of deposits and borrowings. Our results of operations are also dependent upon our generation of non-interest income, consisting primarily of income from fees and service charges on deposits, loan servicing revenue, wealth management and trust income, ATM and interchange fees, and net gains on sales of investment securities and loans. Other factors contributing to our results of operations include our provisions for credit losses, provision for income taxes, and non-interest expenses, such as salaries and employee benefits, occupancy and equipment expenses, and other miscellaneous operating costs.
51
Selected Financial Data
|
|
As of or for the Three Months Ended |
|
|
As of or For the Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
(dollars in thousands, except share and per share data) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Summary of Operations |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common Share Data |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings per common share |
|
$ |
0.66 |
|
|
$ |
0.68 |
|
|
$ |
1.31 |
|
|
$ |
1.39 |
|
Diluted earnings per common share |
|
$ |
0.66 |
|
|
$ |
0.68 |
|
|
$ |
1.30 |
|
|
$ |
1.37 |
|
Adjusted diluted earnings per share(1)(3) |
|
$ |
0.75 |
|
|
$ |
0.68 |
|
|
$ |
1.39 |
|
|
$ |
1.37 |
|
Weighted-average common shares outstanding (basic) |
|
|
45,306,240 |
|
|
|
43,361,516 |
|
|
|
44,551,490 |
|
|
|
43,309,802 |
|
Weighted-average common shares outstanding (diluted) |
|
|
45,484,392 |
|
|
|
43,741,840 |
|
|
|
44,804,849 |
|
|
|
43,738,130 |
|
Common shares outstanding |
|
|
45,866,649 |
|
|
|
44,180,829 |
|
|
|
45,866,649 |
|
|
|
44,180,829 |
|
Cash dividends per common share |
|
$ |
0.10 |
|
|
$ |
0.09 |
|
|
$ |
0.20 |
|
|
$ |
0.18 |
|
Dividend payout ratio on common stock |
|
|
15.15 |
% |
|
|
13.24 |
% |
|
|
15.38 |
% |
|
|
13.14 |
% |
Book value per common share |
|
$ |
26.00 |
|
|
$ |
23.38 |
|
|
$ |
26.00 |
|
|
$ |
23.38 |
|
Tangible book value per common share(1) |
|
$ |
21.56 |
|
|
$ |
18.84 |
|
|
$ |
21.56 |
|
|
$ |
18.84 |
|
Key Ratios and Performance Metrics (annualized |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net interest margin |
|
|
4.18 |
% |
|
|
3.98 |
% |
|
|
4.13 |
% |
|
|
3.99 |
% |
Net interest margin, fully taxable equivalent (1)(4) |
|
|
4.19 |
% |
|
|
3.99 |
% |
|
|
4.14 |
% |
|
|
4.00 |
% |
Average cost of deposits |
|
|
2.27 |
% |
|
|
2.63 |
% |
|
|
2.28 |
% |
|
|
2.60 |
% |
Efficiency ratio(2) |
|
|
52.61 |
% |
|
|
52.19 |
% |
|
|
53.11 |
% |
|
|
52.06 |
% |
Adjusted efficiency ratio(1)(2)(3) |
|
|
48.20 |
% |
|
|
52.19 |
% |
|
|
50.54 |
% |
|
|
51.97 |
% |
Non-interest income to total revenues(1) |
|
|
13.11 |
% |
|
|
12.93 |
% |
|
|
13.74 |
% |
|
|
14.13 |
% |
Non-interest expense to average assets |
|
|
2.48 |
% |
|
|
2.34 |
% |
|
|
2.49 |
% |
|
|
2.37 |
% |
Adjusted non-interest expense to average assets(1)(3) |
|
|
2.28 |
% |
|
|
2.34 |
% |
|
|
2.37 |
% |
|
|
2.36 |
% |
Return on average stockholders' equity |
|
|
10.24 |
% |
|
|
11.83 |
% |
|
|
10.28 |
% |
|
|
12.04 |
% |
Adjusted return on average stockholders' equity(1)(3) |
|
|
11.51 |
% |
|
|
11.83 |
% |
|
|
11.03 |
% |
|
|
12.07 |
% |
Return on average assets |
|
|
1.25 |
% |
|
|
1.31 |
% |
|
|
1.25 |
% |
|
|
1.33 |
% |
Adjusted return on average assets(1)(3) |
|
|
1.41 |
% |
|
|
1.31 |
% |
|
|
1.34 |
% |
|
|
1.33 |
% |
Pre-tax pre-provision return on average assets(1) |
|
|
2.12 |
% |
|
|
2.03 |
% |
|
|
2.09 |
% |
|
|
2.07 |
% |
Adjusted pre-tax pre-provision return on average assets(1)(3) |
|
|
2.32 |
% |
|
|
2.03 |
% |
|
|
2.21 |
% |
|
|
2.07 |
% |
Return on average tangible common stockholders' equity(1) |
|
|
12.83 |
% |
|
|
15.27 |
% |
|
|
12.87 |
% |
|
|
15.57 |
% |
Adjusted return on average tangible common |
|
|
14.37 |
% |
|
|
15.27 |
% |
|
|
13.78 |
% |
|
|
15.61 |
% |
Non-interest-bearing deposits to total deposits |
|
|
22.70 |
% |
|
|
23.99 |
% |
|
|
22.70 |
% |
|
|
23.99 |
% |
Loans and leases held for sale and loans and leases |
|
|
94.15 |
% |
|
|
93.98 |
% |
|
|
94.15 |
% |
|
|
93.98 |
% |
Deposits to total liabilities |
|
|
91.59 |
% |
|
|
85.42 |
% |
|
|
91.59 |
% |
|
|
85.42 |
% |
Deposits per branch |
|
$ |
173,566 |
|
|
$ |
159,721 |
|
|
$ |
173,566 |
|
|
$ |
159,721 |
|
Asset Quality Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-performing loans and leases to total loans and leases |
|
|
0.92 |
% |
|
|
0.93 |
% |
|
|
0.92 |
% |
|
|
0.93 |
% |
Non-performing assets to total assets |
|
|
0.75 |
% |
|
|
0.67 |
% |
|
|
0.75 |
% |
|
|
0.67 |
% |
ACL to total loans and leases held for investment, |
|
|
1.47 |
% |
|
|
1.45 |
% |
|
|
1.47 |
% |
|
|
1.45 |
% |
Net charge-offs to average total loans and leases |
|
|
0.43 |
% |
|
|
0.56 |
% |
|
|
0.41 |
% |
|
|
0.47 |
% |
Capital Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common equity to total assets |
|
|
12.27 |
% |
|
|
10.72 |
% |
|
|
12.27 |
% |
|
|
10.72 |
% |
Tangible common equity to tangible assets(1) |
|
|
10.39 |
% |
|
|
8.82 |
% |
|
|
10.39 |
% |
|
|
8.82 |
% |
Leverage ratio |
|
|
11.92 |
% |
|
|
11.08 |
% |
|
|
11.92 |
% |
|
|
11.08 |
% |
Common equity tier 1 capital ratio |
|
|
11.85 |
% |
|
|
10.84 |
% |
|
|
11.85 |
% |
|
|
10.84 |
% |
Tier 1 capital ratio |
|
|
12.83 |
% |
|
|
11.86 |
% |
|
|
12.83 |
% |
|
|
11.86 |
% |
Total capital ratio |
|
|
14.87 |
% |
|
|
13.86 |
% |
|
|
14.87 |
% |
|
|
13.86 |
% |
(1) Represents a non-GAAP financial measure. See "Reconciliations of non-GAAP Financial Measures" for a reconciliation to the most directly comparable GAAP financial measure.
(2) Represents non-interest expense less amortization of intangible assets divided by net interest income and non-interest income.
(3) Calculation excludes merger-related expenses, secondary public offering of common stock expenses and impairment of right-of-use assets.
(4) Interest income and rates include the effects of a tax equivalent adjustment to adjust tax-exempt investment income on tax-exempt investment securities to a fully taxable basis, assuming a federal income tax rate of 21%.
52
We reported consolidated net income of $30.1 million for the three months ended June 30, 2025 compared to net income of $29.7 million for the three months ended June 30, 2024, an increase of $411,000. The increase in net income was attributable to a $9.4 million increase in net interest income and a $1.6 million increase in non-interest income, offset by a $6.4 million increase in non-interest expense, and a $5.9 million increase in provision for credit losses. Net income was $0.66 per basic and per diluted common share for the three months ended June 30, 2025, compared to $0.68 per basic and per diluted common share for the three months ended June 30, 2024.
The increase in net interest income was mainly a result of lower rates paid on deposits. The increase in non-interest income was mainly due to an increase in other non-interest income mainly from swap activity. The increase in non-interest expense was primarily due to increases in salaries and employee benefits driven by merger-related costs and merit increases.
Our annualized return on average assets was 1.25% for the three months ended June 30, 2025 compared to 1.31% for the three months ended June 30, 2024. Our annualized return on average stockholders’ equity was 10.24% for the three months ended June 30, 2025 compared to 11.83% for the three months ended June 30, 2024. Our efficiency ratio was 52.61% for the three months ended June 30, 2025 compared to 52.19% for the three months ended June 30, 2024. Our adjusted efficiency ratio was 48.20% for the three months ended June 30, 2025, compared to 52.19% for the three months ended June 30, 2024.
We reported consolidated net income of $58.3 million for the six months ended June 30, 2025 compared to net income of $60.1 million for the six months ended June 30, 2024, a decrease of $1.8 million. The decrease in net income was primarily attributable to a $9.0 million increase in non-interest expense and an increase of $8.4 million in provision for credit losses, offset by a $12.1 million increase in net interest income and a $2.5 million decrease in the provision for income taxes. Net income was $1.31 per basic and $1.30 per diluted common share for the six months ended June 30, 2025, compared to $1.39 per basic and $1.37 per diluted common share for the six months ended June 30, 2024.
The increase in non-interest expense during the six months ended June 30, 2025 was mostly due to an increase in salaries and employee benefits mainly related to the First Security acquisition. The increase in provision for credit losses was mainly due to the First Security acquisition and weakening macroeconomic conditions. The increase in net interest income during the six months ended June 30, 2025 was mainly a result of decrease in costs of total interest-bearing liabilities.
Our annualized return on average assets was 1.25% for the six months ended June 30, 2025 compared to 1.33% for the six months ended June 30, 2024. Our annualized return on average stockholders’ equity was 10.28% for the six months ended June 30, 2025 compared to 12.04% for the six months ended June 30, 2024. Our efficiency ratio was 53.11% for the six months ended June 30, 2025 compared to 52.06% for the six months ended June 30, 2024. Our adjusted efficiency ratio was 50.54% for the six months ended June 30, 2025 compared to 51.97% for the six months ended June 30, 2024.
Net Interest Income
Net interest income, representing interest income less interest expense, is a significant contributor to our revenues and earnings. We generate interest income from interest and dividends on interest-earning assets, which include loans, leases and investment securities we own. We incur interest expense from interest paid on interest-bearing liabilities, which include interest-bearing deposits, subordinated debt, Federal Home Loan Bank ("FHLB") advances, junior subordinated debentures and other borrowings. To evaluate net interest income, we measure and monitor (i) yields on our loans and other interest-earning assets, (ii) the costs of our deposits and other funding sources, (iii) our net interest spread, and (iv) our net interest margin. Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest margin is calculated as the annualized net interest income divided by average interest-earning assets. Because non-interest-bearing sources of funds, such as non-interest-bearing deposits and stockholders’ equity, also fund interest-earning assets, net interest margin includes the benefit of these non-interest-bearing sources.
We also recognize income from the accretable discounts associated with the purchase of interest-earning assets. Because of our recapitalization and acquisitions, we derive a portion of our interest income from the accretable discounts on purchase credit deteriorated and acquired non-credit-deteriorated loans. The accretion is generally recognized over the life of the loan. This accretion will continue to have an impact on our net interest income as long as loans acquired with a discount at acquisition represent a meaningful portion of our interest-earning assets. As of June 30, 2025 and December 31, 2024, purchased credit deteriorated loans accounted for under ASC Topic 326 represented 1.8% of our total loan and lease portfolio.
Changes in the market interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, as well as the volume and types of interest-earning assets, interest-bearing and non-interest-bearing liabilities, are usually the largest drivers of periodic changes in net interest spread, net interest margin and net interest income. In addition, our interest income includes the accretion of the discounts on our acquired loans, which will also affect our net interest spread, net interest margin and net interest income.
53
The following tables present, for the periods indicated, information about (i) average balances, the total dollar amount of interest income from interest-earning assets and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rates; (iii) net interest income; (iv) the interest rate spread; and (v) the net interest margin. Yields have been calculated on a pre-tax basis (dollars in thousands).
|
|
Three Months Ended June 30, |
|
|||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||||||||||
|
|
Average |
|
|
Interest |
|
|
Average |
|
|
Average |
|
|
Interest |
|
|
Average |
|
||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents |
|
$ |
182,140 |
|
|
$ |
1,655 |
|
|
|
3.64 |
% |
|
$ |
305,873 |
|
|
$ |
3,315 |
|
|
|
4.36 |
% |
Loans and leases(1) |
|
|
7,220,834 |
|
|
|
128,199 |
|
|
|
7.12 |
% |
|
|
6,807,934 |
|
|
|
126,523 |
|
|
|
7.47 |
% |
Taxable securities |
|
|
1,650,463 |
|
|
|
13,806 |
|
|
|
3.36 |
% |
|
|
1,473,000 |
|
|
|
10,869 |
|
|
|
2.97 |
% |
Tax-exempt securities(2) |
|
|
154,719 |
|
|
|
1,098 |
|
|
|
2.85 |
% |
|
|
156,655 |
|
|
|
1,091 |
|
|
|
2.80 |
% |
Total interest-earning assets |
|
$ |
9,208,156 |
|
|
$ |
144,758 |
|
|
|
6.31 |
% |
|
$ |
8,743,462 |
|
|
$ |
141,798 |
|
|
|
6.52 |
% |
Allowance for credit losses - loans and leases |
|
|
(106,278 |
) |
|
|
|
|
|
|
|
|
(103,266 |
) |
|
|
|
|
|
|
||||
All other assets |
|
|
531,939 |
|
|
|
|
|
|
|
|
|
500,540 |
|
|
|
|
|
|
|
||||
TOTAL ASSETS |
|
$ |
9,633,817 |
|
|
|
|
|
|
|
|
$ |
9,140,736 |
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest checking |
|
$ |
820,341 |
|
|
$ |
3,551 |
|
|
|
1.74 |
% |
|
$ |
717,513 |
|
|
$ |
4,096 |
|
|
|
2.30 |
% |
Money market accounts |
|
|
2,905,465 |
|
|
|
22,749 |
|
|
|
3.14 |
% |
|
|
2,270,231 |
|
|
|
19,978 |
|
|
|
3.54 |
% |
Savings |
|
|
506,874 |
|
|
|
139 |
|
|
|
0.11 |
% |
|
|
514,192 |
|
|
|
194 |
|
|
|
0.15 |
% |
Time deposits |
|
|
1,810,909 |
|
|
|
17,941 |
|
|
|
3.97 |
% |
|
|
1,951,448 |
|
|
|
23,335 |
|
|
|
4.81 |
% |
Total interest-bearing deposits |
|
|
6,043,589 |
|
|
|
44,380 |
|
|
|
2.95 |
% |
|
|
5,453,384 |
|
|
|
47,603 |
|
|
|
3.51 |
% |
Other borrowings |
|
|
298,916 |
|
|
|
1,396 |
|
|
|
1.87 |
% |
|
|
521,545 |
|
|
|
4,439 |
|
|
|
3.42 |
% |
Federal funds purchased |
|
|
— |
|
|
|
— |
|
|
|
0.00 |
% |
|
|
1,401 |
|
|
|
21 |
|
|
|
6.05 |
% |
Subordinated notes and debentures |
|
|
145,175 |
|
|
|
2,781 |
|
|
|
7.68 |
% |
|
|
144,548 |
|
|
|
2,980 |
|
|
|
8.29 |
% |
Total borrowings |
|
|
444,091 |
|
|
|
4,177 |
|
|
|
3.77 |
% |
|
|
667,494 |
|
|
|
7,440 |
|
|
|
4.48 |
% |
Total interest-bearing liabilities |
|
$ |
6,487,680 |
|
|
$ |
48,557 |
|
|
|
3.00 |
% |
|
$ |
6,120,878 |
|
|
$ |
55,043 |
|
|
|
3.62 |
% |
Non-interest-bearing demand deposits |
|
|
1,802,639 |
|
|
|
|
|
|
|
|
|
1,817,133 |
|
|
|
|
|
|
|
||||
Other liabilities |
|
|
164,944 |
|
|
|
|
|
|
|
|
|
193,923 |
|
|
|
|
|
|
|
||||
Total stockholders’ equity |
|
|
1,178,554 |
|
|
|
|
|
|
|
|
|
1,008,802 |
|
|
|
|
|
|
|
||||
TOTAL LIABILITIES AND |
|
$ |
9,633,817 |
|
|
|
|
|
|
|
|
$ |
9,140,736 |
|
|
|
|
|
|
|
||||
Net interest spread(3) |
|
|
|
|
|
|
|
|
3.31 |
% |
|
|
|
|
|
|
|
|
2.90 |
% |
||||
Net interest income, fully taxable equivalent |
|
|
|
|
$ |
96,201 |
|
|
|
|
|
|
|
|
$ |
86,755 |
|
|
|
|
||||
Net interest margin, fully taxable equivalent(2)(4) |
|
|
|
|
|
|
|
|
4.19 |
% |
|
|
|
|
|
|
|
|
3.99 |
% |
||||
Reconciliation to reported net interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Less: Tax-equivalent adjustment |
|
|
|
|
|
231 |
|
|
|
0.01 |
% |
|
|
|
|
|
229 |
|
|
|
0.01 |
% |
||
Net interest income |
|
|
|
|
$ |
95,970 |
|
|
|
|
|
|
|
|
$ |
86,526 |
|
|
|
|
||||
Net interest margin(4) |
|
|
|
|
|
|
|
|
4.18 |
% |
|
|
|
|
|
|
|
|
3.98 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net loan accretion impact on margin |
|
|
|
|
$ |
2,978 |
|
|
|
0.13 |
% |
|
|
|
|
$ |
3,656 |
|
|
|
0.17 |
% |
||
54
|
|
For the Six Months Ended June 30, |
|
|||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||||||||||
|
|
Average |
|
|
Interest |
|
|
Average |
|
|
Average |
|
|
Interest |
|
|
Average |
|
||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents |
|
$ |
158,219 |
|
|
$ |
2,667 |
|
|
|
3.40 |
% |
|
$ |
322,661 |
|
|
$ |
7,143 |
|
|
|
4.45 |
% |
Loans and leases(1) |
|
|
7,079,099 |
|
|
|
249,429 |
|
|
|
7.11 |
% |
|
|
6,744,711 |
|
|
|
250,315 |
|
|
|
7.46 |
% |
Taxable securities |
|
|
1,605,910 |
|
|
|
25,551 |
|
|
|
3.21 |
% |
|
|
1,447,830 |
|
|
|
20,691 |
|
|
|
2.87 |
% |
Tax-exempt securities(2) |
|
|
154,827 |
|
|
|
2,190 |
|
|
|
2.85 |
% |
|
|
158,319 |
|
|
|
2,203 |
|
|
|
2.80 |
% |
Total interest-earning assets |
|
$ |
8,998,055 |
|
|
$ |
279,837 |
|
|
|
6.27 |
% |
|
$ |
8,673,521 |
|
|
$ |
280,352 |
|
|
|
6.50 |
% |
Allowance for credit losses - loans and leases |
|
|
(102,914 |
) |
|
|
|
|
|
|
|
|
(102,761 |
) |
|
|
|
|
|
|
||||
All other assets |
|
|
516,386 |
|
|
|
|
|
|
|
|
|
515,079 |
|
|
|
|
|
|
|
||||
TOTAL ASSETS |
|
$ |
9,411,526 |
|
|
|
|
|
|
|
|
$ |
9,085,839 |
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest checking |
|
$ |
793,281 |
|
|
$ |
6,813 |
|
|
|
1.73 |
% |
|
$ |
653,960 |
|
|
$ |
6,525 |
|
|
|
2.01 |
% |
Money market accounts |
|
|
2,757,010 |
|
|
|
42,367 |
|
|
|
3.10 |
% |
|
|
2,253,777 |
|
|
|
39,638 |
|
|
|
3.54 |
% |
Savings |
|
|
495,852 |
|
|
|
265 |
|
|
|
0.11 |
% |
|
|
523,052 |
|
|
|
391 |
|
|
|
0.15 |
% |
Time deposits |
|
|
1,816,576 |
|
|
|
36,984 |
|
|
|
4.11 |
% |
|
|
1,971,902 |
|
|
|
47,011 |
|
|
|
4.79 |
% |
Total interest-bearing deposits |
|
|
5,862,719 |
|
|
|
86,429 |
|
|
|
2.97 |
% |
|
|
5,402,691 |
|
|
|
93,565 |
|
|
|
3.48 |
% |
Other borrowings |
|
|
318,420 |
|
|
|
3,231 |
|
|
|
2.05 |
% |
|
|
497,095 |
|
|
|
8,263 |
|
|
|
3.34 |
% |
Federal funds purchased |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
701 |
|
|
|
21 |
|
|
|
6.05 |
% |
Subordinated notes and debentures |
|
|
145,097 |
|
|
|
5,531 |
|
|
|
7.69 |
% |
|
|
144,467 |
|
|
|
5,974 |
|
|
|
8.32 |
% |
Total borrowings |
|
|
463,517 |
|
|
|
8,762 |
|
|
|
3.81 |
% |
|
|
642,263 |
|
|
|
14,258 |
|
|
|
4.46 |
% |
Total interest-bearing liabilities |
|
$ |
6,326,236 |
|
|
$ |
95,191 |
|
|
|
3.03 |
% |
|
$ |
6,044,954 |
|
|
$ |
107,823 |
|
|
|
3.59 |
% |
Non-interest-bearing demand deposits |
|
|
1,766,689 |
|
|
|
|
|
|
|
|
|
1,845,728 |
|
|
|
|
|
|
|
||||
Other liabilities |
|
|
174,051 |
|
|
|
|
|
|
|
|
|
191,353 |
|
|
|
|
|
|
|
||||
Total stockholders’ equity |
|
|
1,144,550 |
|
|
|
|
|
|
|
|
|
1,003,804 |
|
|
|
|
|
|
|
||||
TOTAL LIABILITIES AND |
|
$ |
9,411,526 |
|
|
|
|
|
|
|
|
$ |
9,085,839 |
|
|
|
|
|
|
|
||||
Net interest spread(3) |
|
|
|
|
|
|
|
|
3.24 |
% |
|
|
|
|
|
|
|
|
2.91 |
% |
||||
Net interest income, fully taxable equivalent |
|
|
|
|
$ |
184,646 |
|
|
|
|
|
|
|
|
$ |
172,529 |
|
|
|
|
||||
Net interest margin, fully taxable equivalent(2)(4) |
|
|
|
|
|
|
|
|
4.14 |
% |
|
|
|
|
|
|
|
|
4.00 |
% |
||||
Reconciliation to reported net interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Less: Tax-equivalent adjustment |
|
|
|
|
|
460 |
|
|
|
0.01 |
% |
|
|
|
|
|
462 |
|
|
|
0.01 |
% |
||
Net interest income |
|
|
|
|
$ |
184,186 |
|
|
|
|
|
|
|
|
$ |
172,067 |
|
|
|
|
||||
Net interest margin(4) |
|
|
|
|
|
|
|
|
4.13 |
% |
|
|
|
|
|
|
|
|
3.99 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net loan accretion impact on margin |
|
|
|
|
$ |
5,573 |
|
|
|
0.12 |
% |
|
|
|
|
$ |
7,940 |
|
|
|
0.18 |
% |
||
55
Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average interest rates. The following table sets forth the effects of changing rates and volumes on our net interest income during the periods shown. Information is provided with respect to (i) effects on interest income attributable to changes in volume (changes in volume multiplied by prior rate) and (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume). Changes applicable to both volume and rate have been allocated to volume. Yields have been calculated on a pre-tax basis. The table below is a summary of increases and decreases in interest income and interest expense resulting from changes in average balances (volume) and changes in average interest rates (dollars in thousands):
|
|
Three Months Ended June 30, 2025 |
|
|||||||||
|
|
Compared to Three Months Ended June 30, 2024 |
|
|||||||||
|
|
Increase (Decrease) Due to |
|
|
|
|
||||||
|
|
Volume |
|
|
Rate |
|
|
Total |
|
|||
Interest income |
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
(1,111 |
) |
|
$ |
(549 |
) |
|
$ |
(1,660 |
) |
Loans and leases(1) |
|
|
7,617 |
|
|
|
(5,941 |
) |
|
|
1,676 |
|
Taxable securities |
|
|
1,505 |
|
|
|
1,432 |
|
|
|
2,937 |
|
Tax-exempt securities |
|
|
(13 |
) |
|
|
20 |
|
|
|
7 |
|
Total interest income |
|
$ |
7,998 |
|
|
$ |
(5,038 |
) |
|
$ |
2,960 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|||
Deposits |
|
|
|
|
|
|
|
|
|
|||
Interest checking |
|
$ |
457 |
|
|
$ |
(1,002 |
) |
|
$ |
(545 |
) |
Money market accounts |
|
|
5,035 |
|
|
|
(2,264 |
) |
|
|
2,771 |
|
Savings |
|
|
(4 |
) |
|
|
(51 |
) |
|
|
(55 |
) |
Time deposits |
|
|
(1,307 |
) |
|
|
(4,087 |
) |
|
|
(5,394 |
) |
Total interest-bearing deposits |
|
|
4,181 |
|
|
|
(7,404 |
) |
|
|
(3,223 |
) |
Other borrowings |
|
|
(1,023 |
) |
|
|
(2,020 |
) |
|
|
(3,043 |
) |
Subordinated notes and debentures |
|
|
21 |
|
|
|
(220 |
) |
|
|
(199 |
) |
Total borrowings |
|
|
(1,002 |
) |
|
|
(2,261 |
) |
|
|
(3,263 |
) |
Total interest expense |
|
$ |
3,179 |
|
|
$ |
(9,665 |
) |
|
$ |
(6,486 |
) |
Net interest income, fully taxable equivalent |
|
$ |
4,819 |
|
|
$ |
4,627 |
|
|
$ |
9,446 |
|
|
|
Six Months Ended June 30, 2025 |
|
|||||||||
|
|
Compared to Six Months Ended June 30, 2024 |
|
|||||||||
|
|
Increase (Decrease) Due to |
|
|
|
|
||||||
|
|
Volume |
|
|
Rate |
|
|
Total |
|
|||
Interest income |
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
(2,796 |
) |
|
$ |
(1,680 |
) |
|
$ |
(4,476 |
) |
Loans and leases(1) |
|
|
10,820 |
|
|
|
(11,706 |
) |
|
|
(886 |
) |
Taxable securities |
|
|
2,419 |
|
|
|
2,441 |
|
|
|
4,860 |
|
Tax-exempt securities |
|
|
(52 |
) |
|
|
39 |
|
|
|
(13 |
) |
Total interest income |
|
$ |
10,391 |
|
|
$ |
(10,906 |
) |
|
$ |
(515 |
) |
Interest expense |
|
|
|
|
|
|
|
|
|
|||
Deposits |
|
|
|
|
|
|
|
|
|
|||
Interest checking |
|
$ |
1,196 |
|
|
$ |
(908 |
) |
|
$ |
288 |
|
Money market accounts |
|
|
7,647 |
|
|
|
(4,918 |
) |
|
|
2,729 |
|
Savings |
|
|
(22 |
) |
|
|
(104 |
) |
|
|
(126 |
) |
Time deposits |
|
|
(3,378 |
) |
|
|
(6,649 |
) |
|
|
(10,027 |
) |
Total interest-bearing deposits |
|
|
5,443 |
|
|
|
(12,579 |
) |
|
|
(7,136 |
) |
Other borrowings |
|
|
(1,845 |
) |
|
|
(3,187 |
) |
|
|
(5,032 |
) |
Federal funds purchased |
|
|
(0 |
) |
|
|
(21 |
) |
|
|
(21 |
) |
Subordinated notes and debentures |
|
|
6 |
|
|
|
(449 |
) |
|
|
(443 |
) |
Total borrowings |
|
|
(1,839 |
) |
|
|
(3,657 |
) |
|
|
(5,496 |
) |
Total interest expense |
|
$ |
3,604 |
|
|
$ |
(16,236 |
) |
|
$ |
(12,632 |
) |
Net interest income, fully taxable equivalent |
|
$ |
6,787 |
|
|
$ |
5,330 |
|
|
$ |
12,117 |
|
Net interest income for the three months ended June 30, 2025 was $96.0 million compared to $86.5 million during the same period in 2024, an increase of $9.4 million, or 10.9%. Interest income increased $3.0 million for the three months ended June 30, 2025 compared to the same period in 2024 primarily a result of growth in the loan and lease portfolio, both from acquired loans and organic growth. Interest expense decreased by $6.5 million for the three months ended June 30, 2025 compared to the same period in 2024 mostly due to lower rates paid on interest-bearing deposits and change in deposit mix.
56
Net interest income for the six months ended June 30, 2025 was $184.2 million compared to $172.1 million during the same period in 2024, an increase of $12.1 million, or 7.0%. Interest income decreased $513,000 for the six months ended June 30, 2025 compared to the same period in 2024 primarily as a result of lower yields on loans and leases, offset by growth in the loan and lease portfolio. Interest expense decreased by $12.6 million for the six months ended June 30, 2025 compared to the same period in 2024 mostly due lower rates paid on interest-bearing deposits and change in deposit mix.
The net interest margin for the three months ended June 30, 2025 was 4.18%, an increase of 20 basis points compared to 3.98% for the three months ended June 30, 2024. The increase was primarily attributable to lower rates paid on deposits. The net interest margin for the six months ended June 30, 2025 was 4.13%, an increase of 14 basis points compared to 3.99% for the six months ended June 30, 2024. The increase was primarily attributable to lower rates paid on deposits.
Net loan accretion income was $3.0 million for the three months ended June 30, 2025 compared to $3.7 million for the three months ended June 30, 2024, a decrease of $678,000 mainly due to acquired loans converting to originated. Total net loan accretion on acquired loans contributed 13 basis points to the net interest margin for the three months ended June 30, 2025 compared to 17 basis points for the three months ended June 30, 2024.
Net loan accretion income was $5.6 million for the six months ended June 30, 2025 compared to $7.9 million for the six months ended June 30, 2024, a decrease of $2.4 million due to acquired loans converting to originated. Total net loan accretion on acquired loans contributed 12 basis points to the net interest margin for the six months ended June 30, 2025 compared to 18 basis points for the six months ended June 30, 2024.
Assuming no additional acquisitions, we expect loan accretion income to decline over time. Based on our portfolio, the estimated projected accretion income for the remaining periods as of June 30, 2025 is summarized as follows (dollars in thousands):
|
|
Estimated |
|
|
Remainder of 2025 |
|
$ |
3,485 |
|
2026 |
|
|
5,122 |
|
2027 |
|
|
3,107 |
|
2028 |
|
|
1,768 |
|
2029 |
|
|
1,228 |
|
Thereafter |
|
|
10,063 |
|
Total |
|
$ |
24,773 |
|
(1) Estimated projected accretion excludes contractual interest income on acquired loans and leases.
(2) Projections are undated quarterly, assume no prepayments, and are subject to change.
Provision for Credit Losses
The provision for credit losses reflects the amount required to maintain the ACL at an appropriate level based upon management’s evaluation of collectively and individually evaluated loss reserves. The provision for credit losses represents a charge to earnings necessary to establish an allowance for credit losses that, in management’s evaluation, is appropriate to provide coverage for current expected credit losses in the loan and lease portfolio. The ACL is increased by the provision for credit losses and is decreased by charge-offs, net of recoveries on prior charge-offs.
The provision for credit losses was $11.9 million for the three months ended June 30, 2025, compared to $6.0 million for the three months ended June 30, 2024, an increase of $5.9 million and is comprised of a provision for credit losses - loans and leases and a provision for credit losses - unfunded commitments. Provision for credit losses - loans and leases was $11.8 million for the three months ended June 30, 2025, and $6.9 million for the three months ended June 30, 2024, an increase of $4.9 million. On April 1, 2025, a provision for credit losses of $864,000 was recorded on acquired non-credit-deteriorated loans related to the First Security acquisition. The provision for credit losses - unfunded commitments was a provision of $166,000 and a recapture of $833,000 for the three months ended June 30, 2025 and 2024, respectively.
The provision for credit losses was $21.1 million for the six months ended June 30, 2025, compared to $12.7 million for the six months ended June 30, 2024, an increase of $8.4 million. Provision for credit losses - loans and leases was $20.8 million for the six months ended June 30, 2025, and $13.8 million for the six months ended June 30, 2024, an increase of $7.0 million. The provision for credit losses - unfunded commitments reflects a provision of $269,000 and a recapture of $1.1 million for the six months ended June 30, 2025 and 2024, respectively.
57
Non-Interest Income
The following table presents the major components of non-interest income for the periods presented (dollars in thousands):
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
QTD 2025 |
|
|
YTD 2025 |
|
||||||||||||||||||||
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
|
$ Change |
|
|
% Change |
|
||||||||
Fees and service charges on deposits |
$ |
2,633 |
|
|
$ |
2,548 |
|
|
$ |
5,336 |
|
|
$ |
4,975 |
|
|
$ |
85 |
|
|
|
3.3 |
% |
|
$ |
361 |
|
|
|
7.3 |
% |
Loan servicing revenue |
|
3,071 |
|
|
|
3,216 |
|
|
|
6,114 |
|
|
|
6,580 |
|
|
|
(145 |
) |
|
|
(4.5 |
)% |
|
|
(466 |
) |
|
|
(7.1 |
)% |
Loan servicing asset revaluation |
|
(2,150 |
) |
|
|
(2,468 |
) |
|
|
(3,201 |
) |
|
|
(3,171 |
) |
|
|
318 |
|
|
|
(12.9 |
)% |
|
|
(30 |
) |
|
|
0.9 |
% |
ATM and interchange fees |
|
1,059 |
|
|
|
1,163 |
|
|
|
2,093 |
|
|
|
2,238 |
|
|
|
(104 |
) |
|
|
(9.0 |
)% |
|
|
(145 |
) |
|
|
(6.5 |
)% |
Net realized gains on securities |
|
(37 |
) |
|
|
— |
|
|
|
(37 |
) |
|
|
— |
|
|
|
(37 |
) |
|
|
100.0 |
% |
|
|
(37 |
) |
|
|
100.0 |
% |
Change in fair value of equity |
|
83 |
|
|
|
(390 |
) |
|
|
894 |
|
|
|
2 |
|
|
|
473 |
|
|
|
(121.4 |
)% |
|
|
892 |
|
|
NM |
|
|
Net gains on sales of loans |
|
5,414 |
|
|
|
6,036 |
|
|
|
10,352 |
|
|
|
11,569 |
|
|
|
(622 |
) |
|
|
(10.3 |
)% |
|
|
(1,217 |
) |
|
|
(10.5 |
)% |
Wealth management and trust income |
|
1,074 |
|
|
|
942 |
|
|
|
2,156 |
|
|
|
2,099 |
|
|
|
132 |
|
|
|
14.0 |
% |
|
|
57 |
|
|
|
2.7 |
% |
Other non-interest income |
|
3,336 |
|
|
|
1,797 |
|
|
|
5,640 |
|
|
|
4,025 |
|
|
|
1,539 |
|
|
|
85.5 |
% |
|
|
1,615 |
|
|
|
40.1 |
% |
Total non-interest income |
$ |
14,483 |
|
|
$ |
12,844 |
|
|
$ |
29,347 |
|
|
$ |
28,317 |
|
|
$ |
1,639 |
|
|
|
12.8 |
% |
|
$ |
1,030 |
|
|
|
3.6 |
% |
Fees and service charges on deposits represent amounts charged to customers for banking services, such as fees on deposit accounts, and include, but are not limited to, maintenance fees, insufficient fund fees, overdraft protection fees, wire transfer fees, and other charges. Fees and service charges on deposits were $2.6 million and $2.5 million for the three months ended June 30, 2025 and 2024, respectively. Fees and service charges on deposits were $5.3 million and $5.0 million for the six months ended June 30, 2025 and 2024, respectively. The increases were primarily due to increases in deposit balances.
While portions of the loans that we originate are sold and generate gains on sale revenue, servicing rights for the majority of loans that we sell are retained by us. In exchange for continuing to service loans that have been sold, we receive servicing revenue from a portion of the interest cash flow of the loan. We generated $3.1 million and $3.2 million in loan servicing revenue on the sold portion of the U.S. government guaranteed loans for the three months ended June 30, 2025 and 2024, respectively. We generated $6.1 million and $6.6 million in loan servicing revenue on the sold portion of the U.S. government guaranteed loans for the six months ended June 30, 2025 and 2024, respectively. At June 30, 2025 and 2024, the outstanding balance of guaranteed loans serviced was $1.7 billion.
Loan servicing asset revaluation represents net changes in the fair value of our servicing assets. Loan servicing asset revaluation had a downward adjustment of $2.1 million and $2.5 million for the three months ended June 30, 2025 and 2024, respectively, a change of $318,000. Change in the quarterly revaluation was mainly due to a changes in prepayment speeds. Loan servicing asset revaluation had a downward adjustment of $3.2 million for both the six months ended June 30, 2025 and 2024, a change of $30,000.
Net gains on sales of loans were $5.4 million for the three months ended June 30, 2025 compared to $6.0 million for the three months ended June 30, 2024, a decrease of $622,000 or 10.3%, driven mainly by lower premiums. We sold $73.0 million of U.S. government guaranteed loans during the three months ended June 30, 2025 compared to $72.5 million during the three months ended June 30, 2024. Net gains on sales of loans were $10.4 million for the six months ended June 30, 2025 compared to $11.6 million for the six months ended June 30, 2024, a decrease of $1.2 million or 10.5%, driven by a lower volume of loans sold. We sold $143.2 million of U.S. government guaranteed loans during the six months ended June 30, 2025 compared to $146.4 million during the six months ended June 30, 2024.
Wealth management and trust income represents fees charged to customers for investment, trust, or wealth management services and are primarily determined by total assets under administration. Wealth management and trust income was $1.1 million for the three months ended June 30, 2025 compared to $942,000 for the three months ended June 30, 2024, an increase of $132,000 or 14.0%. Wealth management and trust income was $2.2 million for the six months ended June 30, 2025 compared to $2.1 million for the six months ended June 30, 2024, an increase of $57,000 or 2.7%. The increases were primarily driven by higher fees from higher asset managed balances. Assets under administration were $783.1 million and $665.7 million as of June 30, 2025 and 2024, respectively.
Other non-interest income was $3.3 million for the three months ended June 30, 2025 compared to $1.8 million for the three months ended June 30, 2024, an increase of $1.5 million or 85.5%. The increase was primarily driven by net gains on sales of leased equipment, income associated with bank owned life insurance, and increased swap fee income. Other non-interest income was $5.6 million for the six months ended June 30, 2025 compared to $4.0 million for the six months ended June 30, 2024, an increase of $1.6 million or 40.1%. The increase was primarily driven by net gains on sales of leased equipment, income associated with bank owned life insurance, and increased swap fee income.
58
Non-Interest Expense
The following table presents the major components of non-interest expense for periods presented (dollars in thousands):
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
QTD 2025 |
|
|
YTD 2025 |
|
||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
|
$ Change |
|
|
% Change |
|
||||||||
Salaries and employee benefits |
|
$ |
37,819 |
|
|
$ |
33,911 |
|
|
$ |
74,071 |
|
|
$ |
67,864 |
|
|
$ |
3,908 |
|
|
|
11.5 |
% |
|
$ |
6,207 |
|
|
|
9.1 |
% |
Occupancy and equipment |
|
|
4,739 |
|
|
|
4,639 |
|
|
|
9,591 |
|
|
|
9,923 |
|
|
|
100 |
|
|
|
2.2 |
% |
|
|
(332 |
) |
|
|
(3.3 |
)% |
Loan and lease related expenses |
|
|
938 |
|
|
|
741 |
|
|
|
1,765 |
|
|
|
1,426 |
|
|
|
197 |
|
|
|
26.5 |
% |
|
|
339 |
|
|
|
23.7 |
% |
Legal, audit and other |
|
|
4,843 |
|
|
|
3,708 |
|
|
|
8,094 |
|
|
|
6,427 |
|
|
|
1,135 |
|
|
|
30.6 |
% |
|
|
1,667 |
|
|
|
25.9 |
% |
Data processing |
|
|
4,986 |
|
|
|
4,036 |
|
|
|
10,157 |
|
|
|
8,181 |
|
|
|
950 |
|
|
|
23.6 |
% |
|
|
1,976 |
|
|
|
24.2 |
% |
Net gain recognized on |
|
|
(44 |
) |
|
|
(62 |
) |
|
|
(2 |
) |
|
|
(160 |
) |
|
|
18 |
|
|
|
(29.6 |
)% |
|
|
158 |
|
|
|
(98.8 |
)% |
Other intangible assets |
|
|
1,499 |
|
|
|
1,345 |
|
|
|
2,617 |
|
|
|
2,690 |
|
|
|
154 |
|
|
|
11.5 |
% |
|
|
(73 |
) |
|
|
(2.7 |
)% |
Other non-interest expense |
|
|
4,822 |
|
|
|
4,892 |
|
|
|
9,738 |
|
|
|
10,668 |
|
|
|
(70 |
) |
|
|
(1.4 |
)% |
|
|
(930 |
) |
|
|
(8.7 |
)% |
Total non-interest expense |
|
$ |
59,602 |
|
|
$ |
53,210 |
|
|
$ |
116,031 |
|
|
$ |
107,019 |
|
|
$ |
6,392 |
|
|
|
12.0 |
% |
|
$ |
9,012 |
|
|
|
8.4 |
% |
Salaries and employee benefits, the single largest component of our non-interest expense, totaled $37.8 million and $33.9 million for the three months ended June 30, 2025 and 2024, respectively, an increase of $3.9 million, or 11.5%. Salaries and employee benefits, totaled $74.1 million for the six months ended June 30, 2025 compared to $67.9 million for the six months ended June 30, 2024, an increase of $6.2 million, or 9.1%. The increase was primarily a result of merger-related expenses, merit increases, lower deferred salaries, and higher commissions paid.
Loan and lease related expenses were $938,000 for the three months ended June 30, 2025 compared to $741,000 for the three months ended June 30, 2024, an increase of $197,000, or 26.5%. Loan and lease related expenses were $1.8 million for the six months ended June 30, 2025, compared to $1.4 million for the six months ended June 30, 2024, an increase of $339,000 or 23.7%. The increase was primarily driven by higher government guaranteed loan expenses and higher taxes and insurance expenses.
Legal, audit, and other professional fees were $4.8 million for the three months ended June 30, 2025 compared to $3.7 million for the three months ended June 30, 2024, an increase of $1.1 million or 30.6%. Legal, audit, and other professional fees were $8.1 million for the six months ended June 30, 2025 compared to $6.4 million for the six months ended June 30, 2024, an increase of $1.7 million or 25.9%. The increases were principally driven by merger-related expenses and fees and expenses related to the secondary public offering of our common stock.
Data processing was $5.0 million for the three months ended June 30, 2025 compared to $4.0 million for the three months ended June 30, 2024, an increase of $950,000 or 23.6%. Data processing was $10.2 million for the six months ended June 30, 2025, compared to $8.2 million for the six months ended June 30, 2024, an increase of $2.0 million or 24.2%. The increases were driven by merger-related expenses.
Other non-interest expense was $4.8 million for the three months ended June 30, 2025 compared to $4.9 million for the three months ended June 30, 2024, a decrease of $70,000 or 1.4%. Other non-interest expense was $9.7 million for the six months ended June 30, 2025, compared to $10.7 million for the six months ended June 30, 2024, a decrease of $930,000 or 8.7%. These decreases were mostly due to gains on sales of assets held for sale related to the sale of two properties.
Our efficiency ratio was 52.61% for the three months ended June 30, 2025 compared to 52.19% for the three months ended June 30, 2024. The change in our efficiency ratio for the three months ended June 30, 2025 was driven by the increase in non-interest expense. Our adjusted efficiency ratio was 48.20% for the three months ended June 30, 2025 compared to 52.19% for the three months ended June 30, 2024. Our efficiency ratio was 53.11% for the six months ended June 30, 2025, compared to 52.06% for the six months ended June 30, 2024. The change in our efficiency ratio was due to higher non-interest expense. Our adjusted efficiency ratio was 50.54% for the six months ended June 30, 2025, compared to 51.97% for the six months ended June 30, 2024.
Please refer to the "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measure.
Income Taxes
Our provision for income taxes for the three months ended June 30, 2025 totaled $8.8 million compared to $10.4 million for the three months ended June 30, 2024, a decrease of $1.6 million, or 15.3%. The decrease in income tax expense was principally due to a higher
59
discrete income tax benefit due to the exercise of stock options and vesting of restricted shares. Our effective tax rate was 22.7% for the three months ended June 30, 2025 and 26.0% for the three months ended June 30, 2024.
Our provision for income taxes for the six months ended June 30, 2025 totaled $18.1 million compared to $20.6 million for the six months ended June 30, 2024, a decrease of $2.5 million or 12.1%. The decrease in income tax expense was principally due to a decrease in net income before provision for income taxes. Our effective tax rate was 23.7% for the six months ended June 30, 2025 and 25.5% for the six months ended June 30, 2024.
We expect our effective tax rate for 2025 to be approximately 25-27%.
Financial Condition
Condensed Consolidated Statements of Financial Condition Analysis
Our total assets increased by $223.7 million, or 2.4%, to $9.7 billion at June 30, 2025 compared to $9.5 billion at December 31, 2024. The increase in total assets was primarily due to an increase of $421.2 million in loans and leases, or 6.1%, from $6.9 billion at December 31, 2024 to $7.3 billion at June 30, 2025, and an increase in securities available for sale of $159.5 million, or 11.3%. Our originated loan and lease portfolio increased by $362.2 million and our purchased credit deteriorated loans and acquired non-credit-deteriorated loans and leases portfolio increased by $59.0 million. The increase in our originated portfolio was primarily attributed to the growth in the commercial and industrial and commercial real estate portfolios. The increase in our purchased credit deteriorated loans and acquired non-credit-deteriorated loans and leases portfolio was attributed to the First Security acquisition.
Total liabilities increased by $122.8 million, or 1.5%, to $8.5 billion at June 30, 2025 compared to $8.4 billion at December 31, 2024. Total deposits increased by $351.9 million, or 4.7%, driven by the First Security acquisition, and growth in money market accounts, offset by decreases to time deposits. Other borrowings decreased by $204.7 million, or 33.1%, mainly due to decreased FHLB advances.
Investment Portfolio
Our investment securities portfolio consists of securities classified as available-for-sale and held-to-maturity. There were no securities classified as trading in our investment portfolio as of June 30, 2025 or December 31, 2024. All available-for sale securities are carried at fair value and may be used for liquidity purposes should management consider it to be in our best interest. Securities available-for-sale consist primarily of residential mortgage-backed securities, commercial mortgage-backed securities and U.S. government agencies securities.
Securities available-for-sale increased by $159.5 million, or 11.3%, from $1.4 billion at December 31, 2024 to $1.6 billion at June 30, 2025. The increase was primarily attributed to the First Security acquisition, increases in fair value, and purchases of securities.
During the six months ended June 30, 2025, our last remaining held-to-maturity security, which was carried at amortized cost, matured. Securities held-to-maturity were $605,000 at December 31, 2024.
The following table summarizes the fair value of the available-for-sale and held-to-maturity securities portfolio as of the dates presented (dollars in thousands):
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||
|
|
Amortized |
|
|
Fair |
|
|
Amortized |
|
|
Fair |
|
||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury Notes |
|
$ |
34,567 |
|
|
$ |
34,718 |
|
|
$ |
32,783 |
|
|
$ |
32,570 |
|
U.S. Government agencies |
|
|
165,906 |
|
|
|
154,649 |
|
|
|
151,912 |
|
|
|
136,487 |
|
Obligations of states, municipalities, and |
|
|
98,104 |
|
|
|
93,990 |
|
|
|
84,188 |
|
|
|
79,306 |
|
Residential mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Agency |
|
|
937,780 |
|
|
|
864,733 |
|
|
|
849,297 |
|
|
|
750,802 |
|
Non-agency |
|
|
152,471 |
|
|
|
133,393 |
|
|
|
160,427 |
|
|
|
137,880 |
|
Commercial mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Agency |
|
|
272,955 |
|
|
|
242,044 |
|
|
|
261,947 |
|
|
|
226,940 |
|
Corporate securities |
|
|
38,596 |
|
|
|
36,679 |
|
|
|
40,623 |
|
|
|
38,462 |
|
Asset-backed securities |
|
|
15,922 |
|
|
|
15,034 |
|
|
|
14,406 |
|
|
|
13,249 |
|
Total available-for-sale |
|
$ |
1,716,301 |
|
|
$ |
1,575,240 |
|
|
$ |
1,595,583 |
|
|
$ |
1,415,696 |
|
Held-to-maturity |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Obligations of states, municipalities, and |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
605 |
|
|
$ |
605 |
|
Total held-to-maturity |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
605 |
|
|
$ |
605 |
|
60
Certain securities in unrealized loss positions have fair values less than amortized cost and, therefore, contain unrealized losses. At June 30, 2025, we evaluated the securities that had an unrealized loss for credit losses and determined there were none. There were 298 investment securities with unrealized losses at June 30, 2025. We anticipate full recovery of amortized cost with respect to these securities by maturity, or sooner in the event of a more favorable market interest rate environment. We do not intend to sell these securities and it is not more likely than not that we will be required to sell them before recovery of their amortized cost basis, which may be at maturity.
The following table (dollars in thousands) set forth certain information regarding contractual maturities and the weighted average yields of our investment securities as of June 30, 2025. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
|
Maturity as of June 30, 2025 |
|
|||||||||||||||||||||||||||||
|
Due in One Year or Less |
|
|
Due from One to |
|
|
Due from Five to |
|
|
Due after Ten Years |
|
||||||||||||||||||||
|
Amortized |
|
|
Weighted |
|
|
Amortized |
|
|
Weighted |
|
|
Amortized |
|
|
Weighted |
|
|
Amortized |
|
|
Weighted |
|
||||||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury Notes |
$ |
5,004 |
|
|
|
4.25 |
% |
|
$ |
29,563 |
|
|
|
4.00 |
% |
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
U.S. government agencies |
|
23,724 |
|
|
|
1.69 |
% |
|
|
75,351 |
|
|
|
2.03 |
% |
|
|
59,750 |
|
|
|
2.59 |
% |
|
|
7,081 |
|
|
|
3.85 |
% |
Obligations of states, |
|
5,811 |
|
|
|
3.71 |
% |
|
|
32,623 |
|
|
|
3.83 |
% |
|
|
25,858 |
|
|
|
3.61 |
% |
|
|
33,812 |
|
|
|
2.53 |
% |
Residential mortgage- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Agency |
|
— |
|
|
|
— |
|
|
|
41,843 |
|
|
|
1.62 |
% |
|
|
49,336 |
|
|
|
2.79 |
% |
|
|
846,601 |
|
|
|
3.14 |
% |
Non-agency |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
152,471 |
|
|
|
2.96 |
% |
Commercial mortgage- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Agency |
|
249 |
|
|
|
4.33 |
% |
|
|
8,510 |
|
|
|
5.52 |
% |
|
|
26,355 |
|
|
|
2.59 |
% |
|
|
237,841 |
|
|
|
3.32 |
% |
Corporate securities |
|
— |
|
|
|
— |
|
|
|
24,583 |
|
|
|
5.30 |
% |
|
|
14,013 |
|
|
|
3.58 |
% |
|
|
— |
|
|
|
— |
|
Asset-backed securities |
|
184 |
|
|
|
4.80 |
% |
|
|
3,287 |
|
|
|
4.32 |
% |
|
|
11,344 |
|
|
|
3.21 |
% |
|
|
1,107 |
|
|
|
5.56 |
% |
Total available-for-sale |
$ |
34,972 |
|
|
|
2.43 |
% |
|
$ |
215,760 |
|
|
|
3.04 |
% |
|
$ |
186,656 |
|
|
|
2.90 |
% |
|
$ |
1,278,913 |
|
|
|
3.14 |
% |
Total non-taxable securities classified as obligations of states, municipalities and political subdivisions were $53.5 million at June 30, 2025, a decrease of $85,000 from December 31, 2024.
There were no holdings of securities of any one issuer, other than U.S. government-sponsored entities and agencies, with total outstanding balances greater than 10% of our stockholders’ equity as of June 30, 2025 or December 31, 2024.
Restricted Stock
As a member of the FHLB system, Byline Bank is required to maintain an investment in the capital stock of the FHLB. No market exists for this stock, and it has no quoted market value. The stock is redeemable at par by the FHLB and is, therefore, carried at cost. In addition, Byline Bank owns stock of Bankers’ Bank that was acquired as part of a bank acquisition. The stock is redeemable at par and carried at cost. As of June 30, 2025 and December 31, 2024, we held $18.6 million and $27.5 million, respectively, in FHLB and Bankers’ Bank stock. We evaluate impairment of our investment in FHLB and Bankers’ Bank based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. We did not identify any indicators of impairment of FHLB and Bankers’ Bank stock as of June 30, 2025 and December 31, 2024.
Loan and Lease Portfolio
Lending-related income is the most important component of our net interest income and is the main driver of the results of our operations. Total loans and leases at June 30, 2025 and December 31, 2024 were $7.3 billion and $6.9 billion, respectively, an increase of $421.2 million, or 6.1%. Originated loans and leases were $6.6 billion at June 30, 2025, an increase of $362.2 million, or 5.8%, compared to $6.2 billion at December 31, 2024. Purchased credit deteriorated loans and acquired non-credit-deteriorated loans and leases were $722.0 million at June 30, 2025, an increase of $59.0 million, or 8.9%, compared to $663.0 million at December 31, 2024. The increase in our originated portfolio was primarily attributed to organic loan and lease growth, and renewals of acquired loans and leases that are now reflected with originated loans. The increase in the purchased credit deteriorated and acquired non-credit-deteriorated loan and lease portfolio was driven by the First Security acquisition.
61
We strive to maintain a relatively diversified loan portfolio to help reduce the risk inherent in concentration in certain types of collateral. Loans, excluding leases, are typically made to real estate, manufacturing, wholesale, retail and service businesses for working capital needs, business expansions and operations. As of June 30, 2025, the loan portfolio included $425.1 million of unguaranteed 7(a) SBA and USDA loans with exposure to the following top three industries: 20.5% retail trade, 13.2% accommodation and food services, and 8.9% manufacturing. The following table shows our allocation of originated, purchase credit deteriorated and acquired non-credit-deteriorated loans and leases as of the dates presented (dollars in thousands):
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||
|
|
Amount |
|
|
% of Total |
|
|
Amount |
|
|
% of Total |
|
||||
Originated loans and leases |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial real estate |
|
$ |
2,184,187 |
|
|
|
29.8 |
% |
|
$ |
2,071,952 |
|
|
|
30.0 |
% |
Residential real estate |
|
|
534,062 |
|
|
|
7.3 |
% |
|
|
513,422 |
|
|
|
7.4 |
% |
Construction, land development, and other land |
|
|
416,118 |
|
|
|
5.6 |
% |
|
|
429,596 |
|
|
|
6.2 |
% |
Commercial and industrial |
|
|
2,737,054 |
|
|
|
37.4 |
% |
|
|
2,509,083 |
|
|
|
36.3 |
% |
Installment and other |
|
|
2,984 |
|
|
|
0.0 |
% |
|
|
3,847 |
|
|
|
0.1 |
% |
Leasing financing receivables |
|
|
731,610 |
|
|
|
10.0 |
% |
|
|
715,899 |
|
|
|
10.4 |
% |
Total originated loans and leases |
|
$ |
6,606,015 |
|
|
|
90.1 |
% |
|
$ |
6,243,799 |
|
|
|
90.4 |
% |
Purchased credit deteriorated loans |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial real estate |
|
$ |
84,747 |
|
|
|
1.2 |
% |
|
$ |
82,934 |
|
|
|
1.2 |
% |
Residential real estate |
|
|
27,076 |
|
|
|
0.4 |
% |
|
|
30,515 |
|
|
|
0.4 |
% |
Construction, land development, and other land |
|
|
2,487 |
|
|
|
0.0 |
% |
|
|
— |
|
|
|
— |
|
Commercial and industrial |
|
|
17,428 |
|
|
|
0.2 |
% |
|
|
14,081 |
|
|
|
0.2 |
% |
Installment and other |
|
|
86 |
|
|
|
0.0 |
% |
|
|
105 |
|
|
|
0.0 |
% |
Total purchased credit deteriorated loans |
|
$ |
131,824 |
|
|
|
1.8 |
% |
|
$ |
127,635 |
|
|
|
1.8 |
% |
Acquired non-credit-deteriorated loans and leases |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial real estate |
|
$ |
224,442 |
|
|
|
3.1 |
% |
|
$ |
199,531 |
|
|
|
2.9 |
% |
Residential real estate |
|
|
172,570 |
|
|
|
2.4 |
% |
|
|
182,165 |
|
|
|
2.6 |
% |
Construction, land development, and other land |
|
|
61,897 |
|
|
|
0.8 |
% |
|
|
59,673 |
|
|
|
0.9 |
% |
Commercial and industrial |
|
|
113,609 |
|
|
|
1.6 |
% |
|
|
93,969 |
|
|
|
1.4 |
% |
Installment and other |
|
|
17,698 |
|
|
|
0.2 |
% |
|
|
14 |
|
|
|
0.0 |
% |
Leasing financing receivables |
|
|
— |
|
|
|
— |
|
|
|
36 |
|
|
|
0.0 |
% |
Total acquired non-credit-deteriorated |
|
$ |
590,216 |
|
|
|
8.1 |
% |
|
$ |
535,388 |
|
|
|
7.8 |
% |
Total loans and leases |
|
$ |
7,328,055 |
|
|
|
100.0 |
% |
|
$ |
6,906,822 |
|
|
|
100.0 |
% |
Allowance for credit losses - loans and leases |
|
|
(107,727 |
) |
|
|
|
|
|
(97,988 |
) |
|
|
|
||
Total loans and leases, net of allowance for credit losses - |
|
$ |
7,220,328 |
|
|
|
|
|
$ |
6,808,834 |
|
|
|
|
||
62
Loans collateralized by real estate include: commercial real estate, residential real estate, and construction, land development, and other land. In the aggregate, loans collateralized by real estate comprised 50.6% and 51.6% of the total loan and lease portfolio at June 30, 2025 and December 31, 2024, respectively.
Commercial Real Estate Loans. Commercial real estate ("CRE") loans comprised the largest portion of the real estate loan portfolio as of June 30, 2025 and December 31, 2024 and totaled $2.5 billion, or 67.3% of real estate loans and 34.0% of the total loan and lease portfolio at June 30, 2025. At December 31, 2024, commercial real estate loans totaled $2.4 billion and comprised 66.0% of real estate loans and 34.1% of the total loan and lease portfolio. Purchased credit deteriorated commercial real estate loans increased from $82.9 million as of December 31, 2024 to $84.7 million as of June 30, 2025, an increase of $1.8 million, or 2.2%.
As part of our risk assessment strategy, we strive to maintain a diversified commercial real estate portfolio, which is reviewed periodically by primary collateral type and geographic location. The following tables present details of our commercial real estate portfolio by collateral type and state (location of the property), as of the date presented:
|
June 30, 2025 |
|
|||||||||||||||||||||
(dollars in thousands) |
Owner Occupied Amount |
|
|
Owner Occupied % of Total Loans and Leases |
|
|
Non-Owner Occupied Amount |
|
|
Non-Owner Occupied % of Total Loans and Leases |
|
|
Total Amount |
|
|
% of Total Loans and Leases |
|
||||||
Commercial Real Estate (CRE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Industrial/Warehouse |
$ |
632,637 |
|
|
|
8.6 |
% |
|
$ |
484,277 |
|
|
|
6.6 |
% |
|
$ |
1,116,914 |
|
|
|
15.2 |
% |
Retail/Restaurant |
|
368,054 |
|
|
|
5.0 |
% |
|
|
154,175 |
|
|
|
2.1 |
% |
|
|
522,229 |
|
|
|
7.1 |
% |
Office |
|
93,934 |
|
|
|
1.3 |
% |
|
|
166,076 |
|
|
|
2.3 |
% |
|
|
260,010 |
|
|
|
3.5 |
% |
Gas Stations |
|
109,835 |
|
|
|
1.5 |
% |
|
|
9,461 |
|
|
|
0.1 |
% |
|
|
119,296 |
|
|
|
1.6 |
% |
Shopping Center/Strip Mall |
|
17,907 |
|
|
|
0.2 |
% |
|
|
79,709 |
|
|
|
1.1 |
% |
|
|
97,616 |
|
|
|
1.3 |
% |
Mixed Use |
|
42,713 |
|
|
|
0.6 |
% |
|
|
45,151 |
|
|
|
0.6 |
% |
|
|
87,864 |
|
|
|
1.2 |
% |
Senior Housing/Healthcare |
|
28,523 |
|
|
|
0.4 |
% |
|
|
22,388 |
|
|
|
0.3 |
% |
|
|
50,911 |
|
|
|
0.7 |
% |
Other(1) |
|
143,452 |
|
|
|
2.0 |
% |
|
|
92,307 |
|
|
|
1.3 |
% |
|
|
235,759 |
|
|
|
3.2 |
% |
CRE, prior to deferred fees and costs |
$ |
1,437,055 |
|
|
|
19.6 |
% |
|
$ |
1,053,544 |
|
|
|
14.4 |
% |
|
$ |
2,490,599 |
|
|
|
34.0 |
% |
Net unamortized deferred fees and costs |
|
3,905 |
|
|
|
0.1 |
% |
|
|
(1,128 |
) |
|
|
0.0 |
% |
|
|
2,777 |
|
|
|
0.1 |
% |
Total CRE |
$ |
1,440,960 |
|
|
|
19.7 |
% |
|
$ |
1,052,416 |
|
|
|
14.4 |
% |
|
$ |
2,493,376 |
|
|
|
34.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
June 30, 2025 |
|
|||||||||||||||||||||
(dollars in thousands) |
Owner Occupied Amount |
|
|
Owner Occupied % of Total Loans and Leases |
|
|
Non-Owner Occupied Amount |
|
|
Non-Owner Occupied % of Total Loans and Leases |
|
|
Total Amount |
|
|
% of Total Loans and Leases |
|
||||||
CRE Geography |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Illinois |
$ |
1,096,566 |
|
|
|
15.0 |
% |
|
$ |
616,426 |
|
|
|
8.4 |
% |
|
$ |
1,712,992 |
|
|
|
23.4 |
% |
Wisconsin |
|
71,542 |
|
|
|
1.0 |
% |
|
|
60,746 |
|
|
|
0.8 |
% |
|
|
132,288 |
|
|
|
1.8 |
% |
New Jersey |
|
9,647 |
|
|
|
0.1 |
% |
|
|
101,698 |
|
|
|
1.4 |
% |
|
|
111,345 |
|
|
|
1.5 |
% |
California |
|
42,260 |
|
|
|
0.6 |
% |
|
|
58,892 |
|
|
|
0.8 |
% |
|
|
101,152 |
|
|
|
1.4 |
% |
Florida |
|
22,211 |
|
|
|
0.3 |
% |
|
|
45,067 |
|
|
|
0.6 |
% |
|
|
67,278 |
|
|
|
0.9 |
% |
Indiana |
|
46,993 |
|
|
|
0.6 |
% |
|
|
16,047 |
|
|
|
0.2 |
% |
|
|
63,040 |
|
|
|
0.9 |
% |
Texas |
|
23,454 |
|
|
|
0.3 |
% |
|
|
34,320 |
|
|
|
0.5 |
% |
|
|
57,774 |
|
|
|
0.8 |
% |
Michigan |
|
25,547 |
|
|
|
0.3 |
% |
|
|
14,660 |
|
|
|
0.2 |
% |
|
|
40,207 |
|
|
|
0.5 |
% |
North Carolina |
|
3,609 |
|
|
|
0.0 |
% |
|
|
23,685 |
|
|
|
0.3 |
% |
|
|
27,294 |
|
|
|
0.4 |
% |
Georgia |
|
5,105 |
|
|
|
0.1 |
% |
|
|
19,758 |
|
|
|
0.3 |
% |
|
|
24,863 |
|
|
|
0.3 |
% |
All Others(2) |
|
90,121 |
|
|
|
1.2 |
% |
|
|
62,245 |
|
|
|
0.8 |
% |
|
|
152,366 |
|
|
|
2.1 |
% |
CRE, prior to deferred fees and costs |
$ |
1,437,055 |
|
|
|
19.6 |
% |
|
$ |
1,053,544 |
|
|
|
14.4 |
% |
|
$ |
2,490,599 |
|
|
|
34.0 |
% |
Net unamortized deferred fees and costs |
|
3,905 |
|
|
|
0.1 |
% |
|
|
(1,128 |
) |
|
|
0.0 |
% |
|
|
2,777 |
|
|
|
0.1 |
% |
Total CRE |
$ |
1,440,960 |
|
|
|
19.7 |
% |
|
$ |
1,052,416 |
|
|
|
14.4 |
% |
|
$ |
2,493,376 |
|
|
|
34.1 |
% |
(1) Represents collateral types that represent less than 1% of the total loan and lease portfolio.
(2) Represents states and territories with less than 1% of the CRE portfolio.
The composition of the commercial real estate loan portfolio remained stable at June 30, 2025 compared to December 31, 2024. Industrial/warehouse, retail/restaurant, and office remain the top three collateral types in the CRE portfolio, and represented 25.8% of total loans and leases held for investment at June 30, 2025 compared to 26.8% at December 31, 2024. CRE office represents 10.4% of our total CRE portfolio as of June 30, 2025, compared to 10.5% as of December 31, 2024. Geographically, CRE loans in Illinois increased to 23.4% of total loans and leases held for investment and represented 68.7% of total CRE loans at June 30, 2025, compared to 23.1% of total loans
63
and leases held for investment and 67.8% of total CRE loans at December 31, 2024. CRE loans outside of Illinois comprised 10.6% of total loans and leases held for investment as of June 30, 2025, compared to 10.8% as of December 31, 2024.
Owner occupied CRE loans were $1.4 billion, or 19.7% of our loan and lease portfolio at June 30, 2025, compared to $1.4 billion, or 20.0% of our loan and lease portfolio at December 31, 2024, an increase of $62.2 million, or 4.5%. Non-owner occupied CRE loans were $1.1 billion , or 14.4% of our loan and lease portfolio at June 30, 2025, compared to $975.6 million, or 14.1% of our loan and lease portfolio at December 31, 2024, an increase of $76.8 million, or 7.9%. Non-owner occupied CRE loans were 84.0% and 82.6% of Byline Bank total capital, at June 30, 2025 and December 31, 2024, respectively.
At June 30, 2025 and December 31, 2024, CRE loan concentration, as defined in the Federal Register to include owner-occupied and non-owner occupied CRE loans, construction land development and other land loans, multifamily property loans, and loans to finance CRE, construction and land development activities (that are not secured by real estate), as a percentage of Byline Bank total capital were 274.1% and 278.2%, respectively. We have not experienced portfolio concentration shift during the six months ended June 30, 2025, nor have we changed our CRE underwriting standards.
Residential real estate loans. Residential real estate loans totaled $733.7 million at June 30, 2025 compared to $726.1 million at December 31, 2024, an increase of $7.6 million, or 1.0%. The residential real estate loan portfolio comprised 19.8% and 20.3% of real estate loans as of June 30, 2025 and December 31, 2024, respectively, and 10.0% and 10.4% of total loans and leases at June 30, 2025 and December 31, 2024, respectively. Purchased credit deteriorated and acquired non-credit-deteriorated residential real estate loans decreased from $212.7 million at December 31, 2024 to $199.6 million at June 30, 2025, a decrease of $13.1 million, or 6.1%. Multifamily real estate loans were $440.6 million and $429.9 million, or 35.2% and 36.4% of Byline Bank total capital, at June 30, 2025 and December 31, 2024, respectively.
Construction, land development, and other land loans. Construction, land development, and other land loans totaled $480.5 million at June 30, 2025 compared to $489.3 million at December 31, 2024, a decrease of $8.8 million, or 1.8%. The construction, land development and other land loan portfolio comprised 13.0% and 13.7% of real estate loans at June 30, 2025 and December 31, 2024, respectively, and 6.6% and 7.1% of the total loan and lease portfolio at June 30, 2025 and December 31, 2024, respectively. The construction, land development and other land loan portfolio was 38.3% and 41.3% of Byline Bank total capital, at June 30, 2025 and December 31, 2024, respectively.
Commercial and industrial loans. Commercial and industrial loans totaled $2.9 billion at June 30, 2025 and $2.6 billion at December 31, 2024, an increase of $251.0 million, or 9.6%. The commercial and industrial loan portfolio comprised 39.1% and 37.9% of the total loan and lease portfolio at June 30, 2025 and December 31, 2024, respectively. Included in the commercial and industrial loans is our sponsored finance portfolio, as of June 30, 2025, we had $727.1 million in sponsor finance loans outstanding, to 62 portfolio companies.
Lease financing receivables. Lease financing receivables comprised 10.0% and 10.4% of the loan and lease portfolio at June 30, 2025 and December 31, 2024, respectively. Total lease financing receivables were $731.6 million and $715.9 million at June 30, 2025 and December 31, 2024, respectively, an increase of $15.7 million, or 2.2%.
64
Loan and Lease Portfolio Maturities and Interest Rate Sensitivity
The following table shows our loan and lease portfolio by scheduled maturity at June 30, 2025 (dollars in thousands):
|
|
Due in One Year or Less |
|
|
Due after One Year |
|
|
Due after Five Years |
|
|
Due after Fifteen Years |
|
|
|
|
|||||||||||||||||||||
|
|
Fixed |
|
|
Floating |
|
|
Fixed |
|
|
Floating |
|
|
Fixed |
|
|
Floating |
|
|
Fixed |
|
|
Floating |
|
|
Total |
|
|||||||||
Originated loans and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial real |
|
$ |
194,682 |
|
|
$ |
275,223 |
|
|
$ |
822,887 |
|
|
$ |
455,298 |
|
|
$ |
178,800 |
|
|
$ |
104,456 |
|
|
$ |
8,623 |
|
|
$ |
144,218 |
|
|
$ |
2,184,187 |
|
Residential real |
|
|
27,573 |
|
|
|
19,109 |
|
|
|
179,303 |
|
|
|
159,533 |
|
|
|
14,104 |
|
|
|
76,510 |
|
|
|
49,887 |
|
|
|
8,043 |
|
|
|
534,062 |
|
Construction, |
|
|
38,734 |
|
|
|
165,869 |
|
|
|
23,328 |
|
|
|
165,041 |
|
|
|
12,587 |
|
|
|
9,434 |
|
|
|
— |
|
|
|
1,125 |
|
|
|
416,118 |
|
Commercial and |
|
|
44,196 |
|
|
|
591,006 |
|
|
|
431,640 |
|
|
|
1,175,736 |
|
|
|
180,005 |
|
|
|
275,892 |
|
|
|
29,348 |
|
|
|
9,231 |
|
|
|
2,737,054 |
|
Installment and other |
|
|
243 |
|
|
|
52 |
|
|
|
1,697 |
|
|
|
834 |
|
|
|
158 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,984 |
|
Leasing financing |
|
|
31,009 |
|
|
|
— |
|
|
|
666,856 |
|
|
|
— |
|
|
|
33,745 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
731,610 |
|
Total originated |
|
$ |
336,437 |
|
|
$ |
1,051,259 |
|
|
$ |
2,125,711 |
|
|
$ |
1,956,442 |
|
|
$ |
419,399 |
|
|
$ |
466,292 |
|
|
$ |
87,858 |
|
|
$ |
162,617 |
|
|
$ |
6,606,015 |
|
Purchased credit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial real |
|
$ |
17,862 |
|
|
$ |
4,134 |
|
|
$ |
30,440 |
|
|
$ |
26,887 |
|
|
$ |
97 |
|
|
$ |
4,241 |
|
|
$ |
957 |
|
|
$ |
129 |
|
|
$ |
84,747 |
|
Residential real |
|
|
4,664 |
|
|
|
— |
|
|
|
10,929 |
|
|
|
589 |
|
|
|
3,651 |
|
|
|
1,598 |
|
|
|
3,448 |
|
|
|
2,197 |
|
|
|
27,076 |
|
Construction, |
|
|
51 |
|
|
|
— |
|
|
|
— |
|
|
|
2,436 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,487 |
|
Commercial and |
|
|
7,761 |
|
|
|
3,540 |
|
|
|
741 |
|
|
|
— |
|
|
|
— |
|
|
|
5,386 |
|
|
|
— |
|
|
|
— |
|
|
|
17,428 |
|
Installment and other |
|
|
7 |
|
|
|
— |
|
|
|
79 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
86 |
|
Total purchased |
|
$ |
30,345 |
|
|
$ |
7,674 |
|
|
$ |
42,189 |
|
|
$ |
29,912 |
|
|
$ |
3,748 |
|
|
$ |
11,225 |
|
|
$ |
4,405 |
|
|
$ |
2,326 |
|
|
$ |
131,824 |
|
Acquired non-credit- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial real |
|
$ |
36,735 |
|
|
$ |
20,400 |
|
|
$ |
96,789 |
|
|
$ |
22,120 |
|
|
$ |
4,302 |
|
|
$ |
33,940 |
|
|
$ |
2,093 |
|
|
$ |
8,063 |
|
|
$ |
224,442 |
|
Residential real |
|
|
7,744 |
|
|
|
9,167 |
|
|
|
44,264 |
|
|
|
3,821 |
|
|
|
8,257 |
|
|
|
8,477 |
|
|
|
5,488 |
|
|
|
85,352 |
|
|
|
172,570 |
|
Construction, land |
|
|
— |
|
|
|
44,994 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
616 |
|
|
|
16,287 |
|
|
|
61,897 |
|
Commercial and industrial |
|
|
6,264 |
|
|
|
6,506 |
|
|
|
49,116 |
|
|
|
10,288 |
|
|
|
39,810 |
|
|
|
1,625 |
|
|
|
— |
|
|
|
— |
|
|
|
113,609 |
|
Installment and other |
|
|
20 |
|
|
|
9,467 |
|
|
|
144 |
|
|
|
8,067 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
17,698 |
|
Total acquired |
|
$ |
50,763 |
|
|
$ |
90,534 |
|
|
$ |
190,313 |
|
|
$ |
44,296 |
|
|
$ |
52,369 |
|
|
$ |
44,042 |
|
|
$ |
8,197 |
|
|
$ |
109,702 |
|
|
$ |
590,216 |
|
Total loans and leases |
|
$ |
417,545 |
|
|
$ |
1,149,467 |
|
|
$ |
2,358,213 |
|
|
$ |
2,030,650 |
|
|
$ |
475,516 |
|
|
$ |
521,559 |
|
|
$ |
100,460 |
|
|
$ |
274,645 |
|
|
$ |
7,328,055 |
|
At June 30, 2025, 45.7% of the loan and lease portfolio bears interest at fixed rates and 54.3% at floating rates. The expected life of our loan portfolio will differ from contractual maturities because borrowers may have the right to curtail or prepay their loans with or without penalties. Because a portion of the portfolio is accounted for under ASC 326, the carrying value is significantly affected by estimates and it is impracticable to allocate scheduled payments for those loans based on those estimates. Consequently, the tables presented include information limited to contractual maturities of the underlying loans.
65
Allowance for Credit Losses - Loans and Leases
The ACL is determined by us on a quarterly basis, although we are engaged in monitoring the appropriate level of the allowance on a more frequent basis. The ACL reflects management’s estimate of current expected credit losses inherent in the loan and lease portfolios. The computation includes elements of judgment and high levels of subjectivity.
Factors considered by us include, but are not limited to, actual loss experience, peer loss experience, changes in size and risk profile of the portfolio, identification of individual problem loan and lease situations that may affect a borrower’s ability to repay, application of a reasonable and supportable forecast, and evaluation of the prevailing economic conditions. Changes in conditions may necessitate revision of the estimate in future periods.
We assess the ACL based on three categories: (i) originated loans and leases, (ii) acquired non-credit-deteriorated loans and leases, and (iii) purchased credit deteriorated loans.
Total ACL was $107.7 million at June 30, 2025 compared to $98.0 million at December 31, 2024, an increase of $9.7 million or 9.9%. The increase was primarily due to increases associated with individually evaluated loans and adjustments from acquired purchased credit deteriorated ("PCD") loans. Total ACL to total loans and leases held for investment, net before ACL, was 1.47% and 1.42% of total loans and leases at June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025, approximately $34.6 million of the ACL was allocated to the unguaranteed portion of SBA 7(a) and USDA loans.
66
The following tables present an analysis of the allowance for credit losses - loans and leases for the periods presented (dollars in thousands):
|
|
Commercial |
|
|
Residential |
|
|
Construction, |
|
|
Commercial |
|
|
Installment |
|
|
Lease |
|
|
Total |
|
|||||||
Balance at March 31, 2025 |
|
$ |
27,794 |
|
|
$ |
2,836 |
|
|
$ |
2,927 |
|
|
$ |
58,627 |
|
|
$ |
20 |
|
|
$ |
8,216 |
|
|
$ |
100,420 |
|
Adjustment for acquired PCD loans |
|
|
1,503 |
|
|
|
144 |
|
|
|
1,152 |
|
|
|
407 |
|
|
|
— |
|
|
|
— |
|
|
|
3,206 |
|
Provision/(recapture) for PCD loans |
|
|
(193 |
) |
|
|
(84 |
) |
|
|
8 |
|
|
|
(54 |
) |
|
|
— |
|
|
|
— |
|
|
|
(323 |
) |
Provision/(recapture) for acquired |
|
|
266 |
|
|
|
97 |
|
|
|
(98 |
) |
|
|
153 |
|
|
|
146 |
|
|
|
— |
|
|
|
564 |
|
Provision/(recapture) for originated |
|
|
7,013 |
|
|
|
1 |
|
|
|
(405 |
) |
|
|
3,986 |
|
|
|
10 |
|
|
|
911 |
|
|
|
11,516 |
|
Total provision/(recapture) |
|
$ |
7,086 |
|
|
$ |
14 |
|
|
$ |
(495 |
) |
|
$ |
4,085 |
|
|
$ |
156 |
|
|
$ |
911 |
|
|
$ |
11,757 |
|
Charge-offs for PCD |
|
|
(2,776 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,776 |
) |
Charge-offs for acquired non-credit |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Charge-offs for originated loans |
|
|
(2,502 |
) |
|
|
(70 |
) |
|
|
— |
|
|
|
(2,373 |
) |
|
|
— |
|
|
|
(639 |
) |
|
|
(5,584 |
) |
Total charge-offs |
|
$ |
(5,278 |
) |
|
$ |
(70 |
) |
|
$ |
— |
|
|
$ |
(2,373 |
) |
|
$ |
— |
|
|
$ |
(639 |
) |
|
$ |
(8,360 |
) |
Recoveries for PCD |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Recoveries for acquired non-credit |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Recoveries for originated loans |
|
|
44 |
|
|
|
7 |
|
|
|
— |
|
|
|
580 |
|
|
|
— |
|
|
|
73 |
|
|
|
704 |
|
Total recoveries |
|
$ |
44 |
|
|
$ |
7 |
|
|
$ |
— |
|
|
$ |
580 |
|
|
$ |
— |
|
|
$ |
73 |
|
|
$ |
704 |
|
Net (charge-offs) recoveries |
|
|
(5,234 |
) |
|
|
(63 |
) |
|
|
— |
|
|
|
(1,793 |
) |
|
|
— |
|
|
|
(566 |
) |
|
|
(7,656 |
) |
Balance at June 30, 2025 |
|
$ |
31,149 |
|
|
$ |
2,931 |
|
|
$ |
3,584 |
|
|
$ |
61,326 |
|
|
$ |
176 |
|
|
$ |
8,561 |
|
|
$ |
107,727 |
|
Ending ACL Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
PCD loans |
|
$ |
2,028 |
|
|
$ |
530 |
|
|
$ |
1,160 |
|
|
$ |
638 |
|
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
4,357 |
|
Acquired non-credit-deteriorated loans |
|
|
1,819 |
|
|
|
486 |
|
|
|
469 |
|
|
|
1,129 |
|
|
|
146 |
|
|
|
— |
|
|
|
4,049 |
|
Originated loans |
|
|
27,302 |
|
|
|
1,915 |
|
|
|
1,955 |
|
|
|
59,559 |
|
|
|
29 |
|
|
|
8,561 |
|
|
|
99,321 |
|
Balance at June 30, 2025 |
|
$ |
31,149 |
|
|
$ |
2,931 |
|
|
$ |
3,584 |
|
|
$ |
61,326 |
|
|
$ |
176 |
|
|
$ |
8,561 |
|
|
$ |
107,727 |
|
Loans individually |
|
$ |
9,289 |
|
|
$ |
119 |
|
|
$ |
1,158 |
|
|
$ |
15,757 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
26,323 |
|
Loans collectively |
|
|
21,860 |
|
|
|
2,812 |
|
|
|
2,426 |
|
|
|
45,569 |
|
|
|
176 |
|
|
|
8,561 |
|
|
|
81,404 |
|
Balance at June 30, 2025 |
|
$ |
31,149 |
|
|
$ |
2,931 |
|
|
$ |
3,584 |
|
|
$ |
61,326 |
|
|
$ |
176 |
|
|
$ |
8,561 |
|
|
$ |
107,727 |
|
Loans and leases ending balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Loans individually |
|
$ |
57,586 |
|
|
$ |
1,421 |
|
|
$ |
4,456 |
|
|
$ |
48,600 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
112,063 |
|
Loans collectively |
|
|
2,435,790 |
|
|
|
732,287 |
|
|
|
476,046 |
|
|
|
2,819,491 |
|
|
|
20,768 |
|
|
|
731,610 |
|
|
|
7,215,992 |
|
Total loans and leases at |
|
$ |
2,493,376 |
|
|
$ |
733,708 |
|
|
$ |
480,502 |
|
|
$ |
2,868,091 |
|
|
$ |
20,768 |
|
|
$ |
731,610 |
|
|
$ |
7,328,055 |
|
Ratio of net charge-offs to average |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
PCD loans |
|
|
0.15 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.15 |
% |
Acquired non-credit-deteriorated loans |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
Originated loans |
|
|
0.14 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.10 |
% |
|
|
0.00 |
% |
|
|
0.03 |
% |
|
|
0.27 |
% |
Total |
|
|
0.29 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.10 |
% |
|
|
0.00 |
% |
|
|
0.03 |
% |
|
|
0.42 |
% |
Loans ending balance as a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Loans individually |
|
|
0.79 |
% |
|
|
0.02 |
% |
|
|
0.06 |
% |
|
|
0.66 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
1.53 |
% |
Loans collectively |
|
|
33.24 |
% |
|
|
9.99 |
% |
|
|
6.50 |
% |
|
|
38.48 |
% |
|
|
0.28 |
% |
|
|
9.98 |
% |
|
|
98.47 |
% |
Total |
|
|
34.03 |
% |
|
|
10.01 |
% |
|
|
6.56 |
% |
|
|
39.14 |
% |
|
|
0.28 |
% |
|
|
9.98 |
% |
|
|
100.00 |
% |
67
|
|
Commercial |
|
|
Residential |
|
|
Construction, |
|
|
Commercial |
|
|
Installment |
|
|
Lease |
|
|
Total |
|
|||||||
Balance at December 31, 2024 |
|
$ |
27,873 |
|
|
$ |
2,920 |
|
|
$ |
2,445 |
|
|
$ |
56,589 |
|
|
$ |
45 |
|
|
$ |
8,116 |
|
|
$ |
97,988 |
|
Adjustment for acquired PCD loans |
|
|
1,503 |
|
|
|
144 |
|
|
|
1,152 |
|
|
|
407 |
|
|
|
— |
|
|
|
— |
|
|
|
3,206 |
|
Provision/(recapture) for PCD loans |
|
|
(76 |
) |
|
|
(109 |
) |
|
|
5 |
|
|
|
(74 |
) |
|
|
— |
|
|
|
— |
|
|
|
(254 |
) |
Provision/(recapture) for acquired |
|
|
213 |
|
|
|
67 |
|
|
|
152 |
|
|
|
151 |
|
|
|
147 |
|
|
|
— |
|
|
|
730 |
|
Provision/(recapture) for originated |
|
|
8,335 |
|
|
|
(37 |
) |
|
|
(170 |
) |
|
|
10,684 |
|
|
|
7 |
|
|
|
1,538 |
|
|
|
20,357 |
|
Total provision/(recapture) |
|
$ |
8,472 |
|
|
$ |
(79 |
) |
|
$ |
(13 |
) |
|
$ |
10,761 |
|
|
$ |
154 |
|
|
$ |
1,538 |
|
|
$ |
20,833 |
|
Charge-offs for PCD |
|
|
(2,776 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,776 |
) |
Charge-offs for acquired non-credit |
|
|
(53 |
) |
|
|
— |
|
|
|
— |
|
|
|
(10 |
) |
|
|
(2 |
) |
|
|
— |
|
|
|
(65 |
) |
Charge-offs for originated loans |
|
|
(4,111 |
) |
|
|
(70 |
) |
|
|
— |
|
|
|
(7,689 |
) |
|
|
(21 |
) |
|
|
(1,264 |
) |
|
|
(13,155 |
) |
Total charge-offs |
|
$ |
(6,940 |
) |
|
$ |
(70 |
) |
|
$ |
— |
|
|
$ |
(7,699 |
) |
|
$ |
(23 |
) |
|
$ |
(1,264 |
) |
|
$ |
(15,996 |
) |
Recoveries for PCD |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Recoveries for acquired non-credit |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Recoveries for originated loans |
|
|
241 |
|
|
|
16 |
|
|
|
— |
|
|
|
1,268 |
|
|
|
— |
|
|
|
171 |
|
|
|
1,696 |
|
Total recoveries |
|
$ |
241 |
|
|
$ |
16 |
|
|
$ |
— |
|
|
$ |
1,268 |
|
|
$ |
— |
|
|
$ |
171 |
|
|
$ |
1,696 |
|
Net (charge-offs) recoveries |
|
|
(6,699 |
) |
|
|
(54 |
) |
|
|
— |
|
|
|
(6,431 |
) |
|
|
(23 |
) |
|
|
(1,093 |
) |
|
|
(14,300 |
) |
Balance at June 30, 2025 |
|
$ |
31,149 |
|
|
$ |
2,931 |
|
|
$ |
3,584 |
|
|
$ |
61,326 |
|
|
$ |
176 |
|
|
$ |
8,561 |
|
|
$ |
107,727 |
|
Ending ACL Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
PCD loans |
|
$ |
2,028 |
|
|
$ |
530 |
|
|
$ |
1,160 |
|
|
$ |
638 |
|
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
4,357 |
|
Acquired non-credit-deteriorated loans |
|
|
1,819 |
|
|
|
486 |
|
|
|
469 |
|
|
|
1,129 |
|
|
|
146 |
|
|
|
— |
|
|
|
4,049 |
|
Originated loans |
|
|
27,302 |
|
|
|
1,915 |
|
|
|
1,955 |
|
|
|
59,559 |
|
|
|
29 |
|
|
|
8,561 |
|
|
|
99,321 |
|
Balance at June 30, 2025 |
|
$ |
31,149 |
|
|
$ |
2,931 |
|
|
$ |
3,584 |
|
|
$ |
61,326 |
|
|
$ |
176 |
|
|
$ |
8,561 |
|
|
$ |
107,727 |
|
Loans individually |
|
$ |
9,289 |
|
|
$ |
119 |
|
|
$ |
1,158 |
|
|
$ |
15,757 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
26,323 |
|
Loans collectively |
|
|
21,860 |
|
|
|
2,812 |
|
|
|
2,426 |
|
|
|
45,569 |
|
|
|
176 |
|
|
|
8,561 |
|
|
|
81,404 |
|
Balance at June 30, 2025 |
|
$ |
31,149 |
|
|
$ |
2,931 |
|
|
$ |
3,584 |
|
|
$ |
61,326 |
|
|
$ |
176 |
|
|
$ |
8,561 |
|
|
$ |
107,727 |
|
Loans and leases ending balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Loans individually |
|
$ |
57,586 |
|
|
$ |
1,421 |
|
|
$ |
4,456 |
|
|
$ |
48,600 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
112,063 |
|
Loans collectively |
|
|
2,435,790 |
|
|
|
732,287 |
|
|
|
476,046 |
|
|
|
2,819,491 |
|
|
|
20,768 |
|
|
|
731,610 |
|
|
|
7,215,992 |
|
Total loans and leases at |
|
$ |
2,493,376 |
|
|
$ |
733,708 |
|
|
$ |
480,502 |
|
|
$ |
2,868,091 |
|
|
$ |
20,768 |
|
|
$ |
731,610 |
|
|
$ |
7,328,055 |
|
Ratio of net charge-offs to average |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
PCD loans |
|
|
0.08 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.08 |
% |
Acquired non-credit-deteriorated loans |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
Originated loans |
|
|
0.11 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.19 |
% |
|
|
0.00 |
% |
|
|
0.03 |
% |
|
|
0.33 |
% |
Total |
|
|
0.19 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.19 |
% |
|
|
0.00 |
% |
|
|
0.03 |
% |
|
|
0.41 |
% |
Loans ending balance as a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Loans individually |
|
|
0.79 |
% |
|
|
0.02 |
% |
|
|
0.06 |
% |
|
|
0.66 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
1.53 |
% |
Loans collectively |
|
|
33.24 |
% |
|
|
9.99 |
% |
|
|
6.50 |
% |
|
|
38.48 |
% |
|
|
0.28 |
% |
|
|
9.98 |
% |
|
|
98.47 |
% |
Total |
|
|
34.03 |
% |
|
|
10.01 |
% |
|
|
6.56 |
% |
|
|
39.14 |
% |
|
|
0.28 |
% |
|
|
9.98 |
% |
|
|
100.00 |
% |
68
|
|
Commercial |
|
|
Residential |
|
|
Construction, |
|
|
Commercial |
|
|
Installment |
|
|
Lease |
|
|
Total |
|
|||||||
Balance at March 31, 2024 |
|
$ |
31,440 |
|
|
$ |
3,348 |
|
|
$ |
2,930 |
|
|
$ |
56,231 |
|
|
$ |
33 |
|
|
$ |
8,384 |
|
|
$ |
102,366 |
|
Provision/(recapture) for PCD loans |
|
|
(3,396 |
) |
|
|
(109 |
) |
|
|
22 |
|
|
|
1,302 |
|
|
|
— |
|
|
|
— |
|
|
|
(2,181 |
) |
Provision/(recapture) for acquired |
|
|
(142 |
) |
|
|
(201 |
) |
|
|
(215 |
) |
|
|
(20 |
) |
|
|
(1 |
) |
|
|
— |
|
|
|
(579 |
) |
Provision/(recapture) for originated |
|
|
(89 |
) |
|
|
(16 |
) |
|
|
(14 |
) |
|
|
9,279 |
|
|
|
(2 |
) |
|
|
480 |
|
|
|
9,638 |
|
Total provision/(recapture) |
|
$ |
(3,627 |
) |
|
$ |
(326 |
) |
|
$ |
(207 |
) |
|
$ |
10,561 |
|
|
$ |
(3 |
) |
|
$ |
480 |
|
|
$ |
6,878 |
|
Charge-offs for PCD |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Charge-offs for acquired non-credit |
|
|
(140 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(140 |
) |
Charge-offs for originated loans |
|
|
(302 |
) |
|
|
— |
|
|
|
— |
|
|
|
(9,530 |
) |
|
|
— |
|
|
|
(680 |
) |
|
|
(10,512 |
) |
Total charge-offs |
|
$ |
(442 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(9,530 |
) |
|
$ |
— |
|
|
$ |
(680 |
) |
|
$ |
(10,652 |
) |
Recoveries for PCD |
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
Recoveries for acquired non-credit |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Recoveries for originated loans |
|
|
480 |
|
|
|
1 |
|
|
|
— |
|
|
|
322 |
|
|
|
— |
|
|
|
334 |
|
|
|
1,137 |
|
Total recoveries |
|
$ |
481 |
|
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
322 |
|
|
$ |
— |
|
|
$ |
334 |
|
|
$ |
1,138 |
|
Net (charge-offs) recoveries |
|
|
39 |
|
|
|
1 |
|
|
|
— |
|
|
|
(9,208 |
) |
|
|
— |
|
|
|
(346 |
) |
|
|
(9,514 |
) |
Balance at June 30, 2024 |
|
|
27,852 |
|
|
|
3,023 |
|
|
|
2,723 |
|
|
|
57,584 |
|
|
|
30 |
|
|
|
8,518 |
|
|
$ |
99,730 |
|
Ending ACL balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
PCD loans |
|
$ |
3,997 |
|
|
$ |
768 |
|
|
$ |
172 |
|
|
$ |
3,024 |
|
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
7,962 |
|
Acquired non-credit-deteriorated loans |
|
|
1,744 |
|
|
|
438 |
|
|
|
409 |
|
|
|
1,290 |
|
|
|
1 |
|
|
|
1 |
|
|
|
3,883 |
|
Originated loans |
|
|
22,111 |
|
|
|
1,817 |
|
|
|
2,142 |
|
|
|
53,270 |
|
|
|
28 |
|
|
|
8,517 |
|
|
|
87,885 |
|
Balance at June 30, 2024 |
|
$ |
27,852 |
|
|
$ |
3,023 |
|
|
$ |
2,723 |
|
|
$ |
57,584 |
|
|
$ |
30 |
|
|
$ |
8,518 |
|
|
$ |
99,730 |
|
Loans individually |
|
$ |
7,329 |
|
|
$ |
57 |
|
|
$ |
— |
|
|
$ |
16,185 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
23,571 |
|
Loans collectively |
|
|
20,523 |
|
|
|
2,966 |
|
|
|
2,723 |
|
|
|
41,399 |
|
|
|
30 |
|
|
|
8,518 |
|
|
|
76,159 |
|
Balance at June 30, 2024 |
|
$ |
27,852 |
|
|
$ |
3,023 |
|
|
$ |
2,723 |
|
|
$ |
57,584 |
|
|
$ |
30 |
|
|
$ |
8,518 |
|
|
$ |
99,730 |
|
Loans and leases ending balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Acquired impaired loans |
|
$ |
36,755 |
|
|
$ |
3,788 |
|
|
$ |
— |
|
|
$ |
35,210 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
75,753 |
|
Acquired non-impaired loans |
|
|
2,256,953 |
|
|
|
724,007 |
|
|
|
530,777 |
|
|
|
2,589,812 |
|
|
|
2,845 |
|
|
|
711,057 |
|
|
|
6,815,451 |
|
Total loans and leases at |
|
$ |
2,293,708 |
|
|
$ |
727,795 |
|
|
$ |
530,777 |
|
|
$ |
2,625,022 |
|
|
$ |
2,845 |
|
|
$ |
711,057 |
|
|
$ |
6,891,204 |
|
Ratio of net charge-offs to average |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
PCD loans |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
Acquired non-credit-deteriorated loans |
|
|
0.01 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.01 |
% |
Originated loans |
|
|
(0.01 |
)% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.54 |
% |
|
|
0.00 |
% |
|
|
0.02 |
% |
|
|
0.55 |
% |
Total |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.54 |
% |
|
|
0.00 |
% |
|
|
0.02 |
% |
|
|
0.56 |
% |
Loans ending balance as a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Loans individually |
|
|
0.53 |
% |
|
|
0.04 |
% |
|
|
0.00 |
% |
|
|
0.51 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
1.10 |
% |
Loans collectively |
|
|
32.75 |
% |
|
|
10.51 |
% |
|
|
7.70 |
% |
|
|
37.58 |
% |
|
|
0.04 |
% |
|
|
10.32 |
% |
|
|
98.90 |
% |
Total |
|
|
33.28 |
% |
|
|
10.55 |
% |
|
|
7.70 |
% |
|
|
38.09 |
% |
|
|
0.04 |
% |
|
|
10.32 |
% |
|
|
100.00 |
% |
69
|
Commercial |
|
|
Residential |
|
|
Construction, |
|
|
Commercial |
|
|
Installment |
|
|
Lease |
|
|
Total |
|
|||||||
Balance at December 31, 2023 |
$ |
33,237 |
|
|
$ |
3,495 |
|
|
$ |
2,906 |
|
|
$ |
53,782 |
|
|
$ |
36 |
|
|
$ |
8,230 |
|
|
$ |
101,686 |
|
Provision/(recapture) for PCD loans |
|
(2,767 |
) |
|
|
(134 |
) |
|
|
(39 |
) |
|
|
955 |
|
|
|
— |
|
|
|
— |
|
|
|
(1,985 |
) |
Provision/(recapture) for acquired |
|
(186 |
) |
|
|
(198 |
) |
|
|
(198 |
) |
|
|
(62 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(647 |
) |
Provision/(recapture) for originated |
|
150 |
|
|
|
(142 |
) |
|
|
54 |
|
|
|
15,504 |
|
|
|
(5 |
) |
|
|
840 |
|
|
|
16,401 |
|
Total provision/(recapture) |
$ |
(2,803 |
) |
|
$ |
(474 |
) |
|
$ |
(183 |
) |
|
$ |
16,397 |
|
|
$ |
(6 |
) |
|
$ |
838 |
|
|
$ |
13,769 |
|
Charge-offs for PCD |
|
(74 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(74 |
) |
Charge-offs for acquired non-credit |
|
(140 |
) |
|
|
— |
|
|
|
— |
|
|
|
(58 |
) |
|
|
— |
|
|
|
— |
|
|
|
(198 |
) |
Charge-offs for originated loans |
|
(3,285 |
) |
|
|
— |
|
|
|
— |
|
|
|
(13,091 |
) |
|
|
— |
|
|
|
(1,053 |
) |
|
|
(17,429 |
) |
Total charge-offs |
$ |
(3,499 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(13,149 |
) |
|
$ |
— |
|
|
$ |
(1,053 |
) |
|
$ |
(17,701 |
) |
Recoveries for PCD |
|
5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5 |
|
Recoveries for acquired non-credit |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Recoveries for originated loans |
|
912 |
|
|
|
2 |
|
|
|
— |
|
|
|
554 |
|
|
|
— |
|
|
|
503 |
|
|
|
1,971 |
|
Total recoveries |
$ |
917 |
|
|
$ |
2 |
|
|
$ |
— |
|
|
$ |
554 |
|
|
$ |
— |
|
|
$ |
503 |
|
|
$ |
1,976 |
|
Net (charge-offs) recoveries |
|
(2,582 |
) |
|
|
2 |
|
|
|
— |
|
|
|
(12,595 |
) |
|
|
— |
|
|
|
(550 |
) |
|
|
(15,725 |
) |
Balance at June 30, 2024 |
$ |
27,852 |
|
|
$ |
3,023 |
|
|
$ |
2,723 |
|
|
$ |
57,584 |
|
|
$ |
30 |
|
|
$ |
8,518 |
|
|
$ |
99,730 |
|
Ending ACL Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
||||||
PCD loans |
$ |
3,997 |
|
|
$ |
768 |
|
|
$ |
172 |
|
|
$ |
3,024 |
|
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
7,962 |
|
Acquired non-credit-deteriorated loans |
|
1,744 |
|
|
|
438 |
|
|
|
409 |
|
|
|
1,290 |
|
|
|
1 |
|
|
|
1 |
|
|
|
3,883 |
|
Originated loans |
|
22,111 |
|
|
|
1,817 |
|
|
|
2,142 |
|
|
|
53,270 |
|
|
|
28 |
|
|
|
8,517 |
|
|
|
87,885 |
|
Balance at June 30, 2024 |
$ |
27,852 |
|
|
$ |
3,023 |
|
|
$ |
2,723 |
|
|
$ |
57,584 |
|
|
$ |
30 |
|
|
$ |
8,518 |
|
|
$ |
99,730 |
|
Loans individually |
$ |
7,329 |
|
|
$ |
57 |
|
|
$ |
— |
|
|
$ |
16,185 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
23,571 |
|
Loans collectively |
|
20,523 |
|
|
|
2,966 |
|
|
|
2,723 |
|
|
|
41,399 |
|
|
|
30 |
|
|
|
8,518 |
|
|
|
76,159 |
|
Balance at June 30, 2024 |
$ |
27,852 |
|
|
$ |
3,023 |
|
|
$ |
2,723 |
|
|
$ |
57,584 |
|
|
$ |
30 |
|
|
$ |
8,518 |
|
|
$ |
99,730 |
|
Loans and leases ending balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Loans individually |
$ |
36,755 |
|
|
$ |
3,788 |
|
|
$ |
— |
|
|
$ |
35,210 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
75,753 |
|
Loans collectively |
|
2,256,953 |
|
|
|
724,007 |
|
|
|
530,777 |
|
|
|
2,589,812 |
|
|
|
2,845 |
|
|
|
711,057 |
|
|
|
6,815,451 |
|
Total loans and leases at |
$ |
2,293,708 |
|
|
$ |
727,795 |
|
|
$ |
530,777 |
|
|
$ |
2,625,022 |
|
|
$ |
2,845 |
|
|
$ |
711,057 |
|
|
$ |
6,891,204 |
|
Ratio of net charge-offs to average |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
PCD loans |
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
Acquired non-credit-deteriorated loans |
|
0.01 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.01 |
% |
Originated loans |
|
0.07 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.37 |
% |
|
|
0.00 |
% |
|
|
0.02 |
% |
|
|
0.46 |
% |
Total |
|
0.08 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.37 |
% |
|
|
0.00 |
% |
|
|
0.02 |
% |
|
|
0.47 |
% |
Loans and leases ending balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Loans individually |
|
0.53 |
% |
|
|
0.04 |
% |
|
|
0.00 |
% |
|
|
0.51 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
1.10 |
% |
Loans collectively |
|
32.75 |
% |
|
|
10.51 |
% |
|
|
7.70 |
% |
|
|
37.58 |
% |
|
|
0.04 |
% |
|
|
10.32 |
% |
|
|
98.90 |
% |
Total |
|
33.28 |
% |
|
|
10.55 |
% |
|
|
7.70 |
% |
|
|
38.09 |
% |
|
|
0.04 |
% |
|
|
10.32 |
% |
|
|
100.00 |
% |
70
Non-Performing Assets
Non-performing loans and leases include loans and leases 90 days past due and still accruing and loans and leases accounted for on a non-accrual basis. Non-performing assets consist of non-performing loans and leases plus other real estate owned. Non-performing assets at June 30, 2025 and December 31, 2024 totaled $72.5 million and $67.2 million, with the increase driven mainly by increases to non-accrual loans and leases. The U.S. government guaranteed portion of non-performing loans totaled $8.8 million at June 30, 2025 and $9.9 million at December 31, 2024.
Total other real estate owned ("OREO") decreased from $5.2 million at December 31, 2024 to $4.9 million at June 30, 2025. The decrease in OREO resulted from sales of OREO properties.
The following table sets forth the amounts of non-performing loans and leases, non-performing assets, and OREO at the dates indicated (dollars in thousands):
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
Non-performing assets: |
|
|
|
|
|
|
||
Non-accrual loans and leases(1)(2) |
|
$ |
67,552 |
|
|
$ |
62,076 |
|
Past due loans and leases 90 days or more and still accruing interest |
|
|
— |
|
|
|
— |
|
Total non-performing loans and leases |
|
|
67,552 |
|
|
|
62,076 |
|
Other real estate owned |
|
|
4,946 |
|
|
|
5,170 |
|
Total non-performing assets |
|
$ |
72,498 |
|
|
$ |
67,246 |
|
Total non-performing loans and leases as a percentage of total |
|
|
0.92 |
% |
|
|
0.90 |
% |
Total non-accrual loans and leases as a percentage of total |
|
|
0.92 |
% |
|
|
0.90 |
% |
Total non-performing assets as a percentage of |
|
|
0.75 |
% |
|
|
0.71 |
% |
Allowance for credit losses - loans and leases, as a percentage of |
|
|
159.47 |
% |
|
|
157.85 |
% |
Allowance for credit losses - loans and leases, as a percentage of |
|
|
159.47 |
% |
|
|
157.85 |
% |
|
|
|
|
|
|
|
||
Non-performing assets guaranteed by U.S. government: |
|
|
|
|
|
|
||
Non-accrual loans guaranteed |
|
$ |
8,819 |
|
|
$ |
9,862 |
|
Past due loans 90 days or more and still accruing interest guaranteed |
|
|
— |
|
|
|
— |
|
Total non-performing loans guaranteed |
|
$ |
8,819 |
|
|
$ |
9,862 |
|
Total non-performing loans and leases not guaranteed as a percentage of |
|
|
0.80 |
% |
|
|
0.76 |
% |
Total non-accrual loans and leases not guaranteed as a percentage of |
|
|
0.80 |
% |
|
|
0.76 |
% |
Total non-performing assets not guaranteed as a percentage of total assets |
|
|
0.66 |
% |
|
|
0.60 |
% |
71
Deposits
Our loan and lease growth is funded primarily through core deposits. We gather deposits primarily through each of our 44 branch locations in the Chicago metropolitan area and one branch in Wauwatosa, Wisconsin. Through our branch network, online, mobile and direct banking channels, we offer a variety of deposit products including demand deposit accounts, interest-bearing products, savings accounts, and certificates of deposit. We offer competitive online, mobile, and direct banking channels. Small businesses are a significant source of low cost deposits as they value convenience, flexibility, and access to local decision makers that are responsive to their needs.
Total deposits at June 30, 2025 were $7.8 billion, representing an increase of $351.9 million, or 4.7%, compared to $7.5 billion at December 31, 2024, driven by an increase in money market demand accounts. Non-interest-bearing deposits were $1.8 billion, or 22.7% of total deposits, at June 30, 2025, a decrease of $17.1 million, or 1.0%, compared to $1.8 billion at December 31, 2024, or 23.5% of total deposits. Core deposits were 86.6% and 85.9% of total deposits at June 30, 2025 and December 31, 2024, respectively.
The following table shows the average balance amounts and the average contractual rates paid on our deposits for the periods indicated (dollars in thousands):
|
|
For Three Months Ended |
|
|
For Three Months Ended |
|
||||||||||
|
|
June 30, 2025 |
|
|
June 30, 2024 |
|
||||||||||
|
|
Average |
|
|
Average |
|
|
Average |
|
|
Average |
|
||||
Non-interest-bearing demand deposits |
|
$ |
1,802,639 |
|
|
|
0.00 |
% |
|
$ |
1,817,133 |
|
|
|
0.00 |
% |
Interest-bearing checking accounts |
|
|
820,341 |
|
|
|
1.74 |
% |
|
|
717,513 |
|
|
|
2.30 |
% |
Money market demand accounts |
|
|
2,905,465 |
|
|
|
3.14 |
% |
|
|
2,270,231 |
|
|
|
3.54 |
% |
Other savings |
|
|
506,874 |
|
|
|
0.11 |
% |
|
|
514,192 |
|
|
|
0.15 |
% |
Time deposits (below $100,000) |
|
|
715,057 |
|
|
|
3.86 |
% |
|
|
906,103 |
|
|
|
4.84 |
% |
Time deposits ($100,000 and above) |
|
|
1,095,852 |
|
|
|
4.05 |
% |
|
|
1,045,345 |
|
|
|
4.72 |
% |
Total |
|
$ |
7,846,228 |
|
|
|
2.27 |
% |
|
$ |
7,270,517 |
|
|
|
2.63 |
% |
|
|
For the Six Months Ended |
|
|
For the Six Months Ended |
|
||||||||||
|
|
June 30, 2025 |
|
|
June 30, 2024 |
|
||||||||||
|
|
Average |
|
|
Average |
|
|
Average |
|
|
Average |
|
||||
Non-interest-bearing demand deposits |
|
$ |
1,766,689 |
|
|
|
0.00 |
% |
|
$ |
1,845,728 |
|
|
|
0.00 |
% |
Interest checking |
|
|
793,281 |
|
|
|
1.73 |
% |
|
|
653,960 |
|
|
|
2.01 |
% |
Money market accounts |
|
|
2,757,010 |
|
|
|
3.10 |
% |
|
|
2,253,777 |
|
|
|
3.54 |
% |
Savings |
|
|
495,852 |
|
|
|
0.11 |
% |
|
|
523,052 |
|
|
|
0.15 |
% |
Time deposits (below $100,000) |
|
|
761,906 |
|
|
|
4.01 |
% |
|
|
944,097 |
|
|
|
4.79 |
% |
Time deposits ($100,000 and above) |
|
|
1,054,670 |
|
|
|
4.18 |
% |
|
|
1,027,805 |
|
|
|
4.80 |
% |
Total |
|
$ |
7,629,408 |
|
|
|
2.28 |
% |
|
$ |
7,248,419 |
|
|
|
2.60 |
% |
Our average cost of deposits was 2.27% during the three months ended June 30, 2025, compared to 2.63% for the three months ended June 30, 2024. Our average cost of deposits was 2.28% during the six months ended June 30, 2025, compared to 2.60% for the six months ended June 30, 2024. These decreases were principally attributed to lower rates paid on time deposits and changes in deposit mix. The ratio of our average non-interest bearing deposits to total average deposits was 23.0% during the three months ended June 30, 2025, compared to 25.0% during the three months ended June 30, 2024. The ratio of our average non-interest bearing deposits to total average deposits ratios was 23.2% during the six months ended June 30, 2025 compared to 25.5% during the six months ended June 30, 2024.
We had $125.6 million in brokered time deposits at June 30, 2025 and $364.8 million at December 31, 2024, which represented 1.6% and 4.9% of total deposits, respectively. The decrease in brokered deposits was due to increases in other sources of funding.
The following table shows time deposits and other time deposits of $250,000 or more by time remaining until maturity as of June 30, 2025 (dollars in thousands):
|
|
Less than $250,000 |
|
|
$250,000 or Greater |
|
|
Total |
|
|
Uninsured Portion |
|
||||
Three months or less |
|
$ |
373,987 |
|
|
$ |
144,558 |
|
|
$ |
518,545 |
|
|
$ |
67,558 |
|
Over three months through six months |
|
|
536,276 |
|
|
|
208,415 |
|
|
|
744,691 |
|
|
|
83,915 |
|
Over six months through 12 months |
|
|
251,673 |
|
|
|
92,482 |
|
|
|
344,155 |
|
|
|
36,232 |
|
Over 12 months |
|
|
55,054 |
|
|
|
19,641 |
|
|
|
74,695 |
|
|
|
10,891 |
|
Total |
|
$ |
1,216,990 |
|
|
$ |
465,096 |
|
|
$ |
1,682,086 |
|
|
$ |
198,596 |
|
72
Total estimated uninsured deposits were $2.6 billion and $2.2 billion as of June 30, 2025 and December 31, 2024. Estimated uninsured deposits reflect amounts disclosed in our regulatory reports, adjusted to exclude related accrued interest and intercompany deposit balances.
Short Term and Long Term Borrowings
In addition to deposits, we also utilize FHLB advances as a supplementary funding source to finance our operations. The Bank’s advances from the FHLB are collateralized by commercial, residential and multi-family real estate loans and securities. At June 30, 2025 and December 31, 2024, we had an available borrowing capacity from the FHLB of $3.0 billion and $2.7 billion, respectively, subject to the availability of collateral. At June 30, 2025, the Company had $380.0 million of FHLB advances outstanding with a maturities ranging from July 2025 to September 2025.
On January 17, 2024, the Company entered into a Letter Agreement with the Federal Reserve Bank ("FRB") that allowed us to access the Bank Term Funding Program ("BTFP"). On January 22, 2024, the Company opened an advance of $200.0 million from the FRB as part of the BTFP. Under the terms of the BTFP, the Bank pledged securities to FRB Chicago as collateral for available advances. The advance carried a fixed interest rate of 4.91%. Advances under the BTFP were prepayable at any time without a prepayment penalty. On September 19, 2024, the Company repaid the BTFP advance in full.
The Company also has the capacity to borrow funds from the discount window of the Federal Reserve System. There were no borrowings outstanding under the FRB discount window line as of June 30, 2025 and December 31, 2024. The Company pledges loans as collateral for any borrowings under the FRB discount window.
73
The following table sets forth certain information regarding our short-term borrowings at the dates and for the periods presented (dollars in thousands):
|
|
Six Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Federal Reserve Bank discount window borrowing: |
|
|
|
|
|
|
||
Average balance outstanding |
|
$ |
— |
|
|
$ |
— |
|
Maximum outstanding at any month-end period during the year |
|
|
— |
|
|
|
— |
|
Balance outstanding at end of period |
|
|
— |
|
|
|
— |
|
Weighted average interest rate during period |
|
N/A |
|
|
N/A |
|
||
Weighted average interest rate at end of period |
|
N/A |
|
|
N/A |
|
||
Federal Home Loan Bank advances: |
|
|
|
|
|
|
||
Average balance outstanding |
|
$ |
282,348 |
|
|
$ |
266,566 |
|
Maximum outstanding at any month-end period during the year |
|
|
550,000 |
|
|
|
670,000 |
|
Balance outstanding at end of period |
|
|
380,000 |
|
|
|
670,000 |
|
Weighted average interest rate during period(1) |
|
|
1.89 |
% |
|
|
2.01 |
% |
Weighted average interest rate at end of period |
|
|
4.52 |
% |
|
|
5.46 |
% |
Federal funds purchased: |
|
|
|
|
|
|
||
Average balance outstanding |
|
$ |
— |
|
|
$ |
701 |
|
Maximum outstanding at any month-end period during the year |
|
|
— |
|
|
|
— |
|
Balance outstanding at end of period |
|
|
— |
|
|
|
— |
|
Weighted average interest rate during period |
|
N/A |
|
|
|
6.05 |
% |
|
Weighted average interest rate at end of period |
|
N/A |
|
|
N/A |
|
||
Bank Term Funding Program: |
|
|
|
|
|
|
||
Average balance outstanding |
|
$ |
— |
|
|
$ |
176,923 |
|
Maximum outstanding at any month-end period during the year |
|
|
— |
|
|
|
200,000 |
|
Balance outstanding at end of period |
|
|
— |
|
|
|
200,000 |
|
Weighted average interest rate during period |
|
N/A |
|
|
|
4.92 |
% |
|
Weighted average interest rate at end of period |
|
N/A |
|
|
|
4.91 |
% |
|
Term Loan: |
|
|
|
|
|
|
||
Average balance outstanding |
|
$ |
1,446 |
|
|
$ |
15,842 |
|
Maximum outstanding at any month-end period during the year |
|
|
— |
|
|
|
16,667 |
|
Balance outstanding at end of period |
|
|
— |
|
|
|
15,000 |
|
Weighted average interest rate during period |
|
|
6.97 |
% |
|
|
7.81 |
% |
Weighted average interest rate at end of period |
|
N/A |
|
|
|
7.63 |
% |
|
Revolving Line of Credit: |
|
|
|
|
|
|
||
Average balance outstanding |
|
$ |
— |
|
|
$ |
2,658 |
|
Maximum outstanding at any month-end period during the year |
|
|
— |
|
|
|
7,500 |
|
Balance outstanding at end of period |
|
|
— |
|
|
|
— |
|
Weighted average interest rate during period |
|
N/A |
|
|
|
9.05 |
% |
|
Weighted average interest rate at end of period |
|
N/A |
|
|
N/A |
|
||
(1) Net of pay-fixed interest rate swaps designated as cash flow hedges. Refer to Note 16 - Derivative Instruments and Hedge Activities of the notes to condensed consolidated financial statements contained in Item 1 of this report for further information.
74
Customer Repurchase Agreements (Sweeps)
Securities sold under agreements to repurchase represent a demand deposit product offered to customers that sweep balances in excess of the Federal Deposit Insurance Corporation insurance limit into overnight repurchase agreements. We pledge securities as collateral for the repurchase agreements. Securities sold under agreements to repurchase increased by $2.0 million, from $32.1 million at December 31, 2024 to $34.1 million at June 30, 2025.
Liquidity
We manage liquidity based upon factors that include the amount of core deposits as a percentage of total deposits, the level of diversification of our funding sources, the amount of non-deposit funding used to fund assets, the availability of unused funding sources, off-balance sheet obligations, the availability of assets to be readily converted into cash without undue loss, the amount of cash and liquid securities we hold and the re-pricing characteristics and maturities of our assets when compared to the re-pricing characteristics of our liabilities, the ability to securitize and sell certain pools of assets and other factors.
Our liquidity needs are primarily met by cash and investment securities positions, growth in deposits, cash flow from amortizing loan portfolios, and borrowings from the FHLB. For additional information regarding our operating, investing, and financing cash flows, see Consolidated Statements of Cash Flows in our Unaudited Interim Condensed Consolidated Financial Statements included elsewhere in this report.
As of June 30, 2025, Byline Bank had maximum borrowing capacity from the FHLB of $3.3 billion and $758.3 million from the FRB. As of June 30, 2025, Byline Bank had open FHLB advances of $380.0 million and open letters of credit of $14.2 million. Based on collateral, our available aggregate borrowing capacity at June 30, 2025 was $1.3 billion. In addition, Byline Bank had uncommitted federal funds lines available of $135.0 million available at June 30, 2025.
As of December 31, 2024, Byline Bank had maximum borrowing capacity from the FHLB of $3.3 billion and $792.3 million from the FRB. As of December 31, 2024, Byline Bank had open FHLB advances of $575.0 million and open letters of credit of $11.5 million. Based on collateral and securities pledged, our available aggregate borrowing capacity at December 31, 2024 was $1.1 billion. In addition, Byline Bank had an uncommitted federal funds line available of $127.5 million available at December 31, 2024.
The Company is currently party to a revolving credit agreement with a correspondent bank with availability of up to $15.0 million that matures on May 24, 2026. The revolving line of credit bears interest at either Secured Overnight Financing Rate plus 205 basis points or the Prime Rate minus 75 basis points, not to be less than 2.00%, based on the Company’s election, which is required to be communicated at least three business days prior to the commencement of an interest period. If the Company fails to provide timely notification, the interest rate will be Prime Rate minus 75 basis points. At June 30, 2025 and December 31, 2024, the line of credit had a no outstanding balance.
The variable term loan was paid off in January 2025. At December 31, 2024, the variable term loan had an interest rate of 6.83% and an outstanding balance of $11.7 million.
There are regulatory limitations that affect the ability of Byline Bank to pay dividends to the Company. See Note 21 of our Consolidated Financial Statements, included in our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information. Management believes that such limitations will not impact our ability to meet our ongoing short-term cash obligations.
We expect that our cash and liquidity resources will be generated by the operations of Byline Bank, which we expect to be sufficient to satisfy our liquidity and capital requirements for at least the next twelve months.
Capital Resources
Stockholders’ equity at June 30, 2025 was $1.2 billion compared to $1.1 billion at December 31, 2024, an increase of $100.9 million, or 9.2%. The increase was primarily driven by an increase in retained earnings and the issuance of shares of our common stock in connection with the acquisition of First Security.
The Company and Byline Bank are subject to various regulatory capital requirements administered by federal banking regulators. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by federal banking regulators that, if undertaken, could have a direct material effect on our financial statements.
Under applicable bank regulatory capital requirements, each of the Company and Byline Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. Byline Bank must also meet certain specific capital guidelines under the prompt corrective action framework. The capital amounts and classification are subject to qualitative judgments by the federal banking regulators about components, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and Byline Bank to maintain minimum amounts and ratios of CET1 capital, Tier 1 capital and total capital to risk-weighted assets and of Tier 1 capital to average consolidated assets, (referred to as the "leverage ratio"), as defined under these capital requirements.
As of June 30, 2025, Byline Bank exceeded all applicable regulatory capital requirements and was considered "well-capitalized". There have been no conditions or events since June 30, 2025 that management believes have changed Byline Bank’s classifications.
75
The regulatory capital ratios for the Company and Byline Bank to meet the minimum capital adequacy standards and for Byline Bank to be considered well capitalized under the prompt corrective action framework and the Company’s and Byline Bank’s actual capital amounts and ratios are set forth in the following tables as of the periods indicated (dollars in thousands):
|
|
Actual |
|
|
Minimum Capital |
|
|
Required to be |
|
|||||||||||||||
June 30, 2025 |
|
Amount |
|
|
Ratio |
|
|
Amount |
|
|
Ratio |
|
|
Amount |
|
|
Ratio |
|
||||||
Total capital to risk weighted assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Company |
|
$ |
1,321,090 |
|
|
|
14.87 |
% |
|
$ |
710,516 |
|
|
|
8.00 |
% |
|
N/A |
|
|
N/A |
|
||
Bank |
|
|
1,252,193 |
|
|
|
14.15 |
% |
|
|
708,029 |
|
|
|
8.00 |
% |
|
$ |
885,036 |
|
|
|
10.00 |
% |
Tier 1 capital to risk weighted assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Company |
|
$ |
1,139,101 |
|
|
|
12.83 |
% |
|
$ |
532,887 |
|
|
|
6.00 |
% |
|
N/A |
|
|
N/A |
|
||
Bank |
|
|
1,145,202 |
|
|
|
12.94 |
% |
|
|
531,021 |
|
|
|
6.00 |
% |
|
$ |
708,029 |
|
|
|
8.00 |
% |
Common Equity Tier 1 (CET1) to risk weighted assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Company |
|
$ |
1,052,101 |
|
|
|
11.85 |
% |
|
$ |
399,665 |
|
|
|
4.50 |
% |
|
N/A |
|
|
N/A |
|
||
Bank |
|
|
1,145,202 |
|
|
|
12.94 |
% |
|
|
398,266 |
|
|
|
4.50 |
% |
|
$ |
575,273 |
|
|
|
6.50 |
% |
Tier 1 capital to average assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Company |
|
$ |
1,139,101 |
|
|
|
11.92 |
% |
|
$ |
382,234 |
|
|
|
4.00 |
% |
|
N/A |
|
|
N/A |
|
||
Bank |
|
|
1,145,202 |
|
|
|
12.00 |
% |
|
|
381,594 |
|
|
|
4.00 |
% |
|
$ |
476,992 |
|
|
|
5.00 |
% |
|
|
Actual |
|
|
Minimum Capital |
|
|
Required to be |
|
|||||||||||||||
December 31, 2024 |
|
Amount |
|
|
Ratio |
|
|
Amount |
|
|
Ratio |
|
|
Amount |
|
|
Ratio |
|
||||||
Total capital to risk weighted assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Company |
|
$ |
1,242,391 |
|
|
|
14.74 |
% |
|
$ |
674,471 |
|
|
|
8.00 |
% |
|
N/A |
|
|
N/A |
|
||
Bank |
|
|
1,181,699 |
|
|
|
14.07 |
% |
|
|
672,045 |
|
|
|
8.00 |
% |
|
$ |
840,056 |
|
|
|
10.00 |
% |
Tier 1 capital to risk weighted assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Company |
|
$ |
1,073,042 |
|
|
|
12.73 |
% |
|
$ |
505,853 |
|
|
|
6.00 |
% |
|
N/A |
|
|
N/A |
|
||
Bank |
|
|
1,087,350 |
|
|
|
12.94 |
% |
|
|
504,033 |
|
|
|
6.00 |
% |
|
$ |
672,045 |
|
|
|
8.00 |
% |
Common Equity Tier 1 (CET1) to risk weighted assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Company |
|
$ |
986,042 |
|
|
|
11.70 |
% |
|
$ |
379,390 |
|
|
|
4.50 |
% |
|
N/A |
|
|
N/A |
|
||
Bank |
|
|
1,087,350 |
|
|
|
12.94 |
% |
|
|
378,025 |
|
|
|
4.50 |
% |
|
$ |
546,036 |
|
|
|
6.50 |
% |
Tier 1 capital to average assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Company |
|
$ |
1,073,042 |
|
|
|
11.74 |
% |
|
$ |
365,470 |
|
|
|
4.00 |
% |
|
N/A |
|
|
N/A |
|
||
Bank |
|
|
1,087,350 |
|
|
|
11.92 |
% |
|
|
364,899 |
|
|
|
4.00 |
% |
|
$ |
456,124 |
|
|
|
5.00 |
% |
The ratios above reflect the Company’s election to opt into the regulators’ joint Current Expected Credit Loss ("CECL") transition provision, which allows the Company to phase in the capital impact of the adoption of CECL over the three years beginning January 1, 2022. Accordingly, capital ratios as of June 30, 2025 reflect 100% of the CECL impact and December 31, 2024 reflect 75% of the CECL impact.
The Company and Byline Bank must maintain a capital conservation buffer consisting of CET1 capital greater than 2.5% of risk-weighted assets above the required minimum risk-based capital levels in order to avoid limitations on paying dividends, repurchasing shares, and paying discretionary bonuses. The conservation buffers for the Company and Byline Bank exceed the minimum capital requirement as of June 30, 2025.
Provisions of state and federal banking regulations may limit, by statute, the amount of dividends that may be paid to the Company by Byline Bank without prior approval of Byline Bank’s regulatory agencies. The Company is economically dependent on the cash dividends received from Byline Bank. These dividends represent the primary cash flow from operating activities used to service obligations. For the six months ended June 30, 2025 the Company received $40.0 million in cash dividends from Byline Bank, in order to pay the required interest on its outstanding subordinated note, junior subordinated debentures in connection with its trust preferred securities interest, principal and interest payments related to its term note and revolving line of credit, and to fund other Company-related activities. For the year ended December 31, 2024, the Company received $46.0 million in cash dividends from Byline Bank, in order to pay the required interest on its outstanding subordinated note and junior subordinated debentures in connection with its trust preferred securities interest, principal and interest on its term loan and revolving line of credit, and to fund other Company-related activities.
On December 6, 2023, we announced that our Board of Directors approved a new stock repurchase program authorizing the purchase of up to an aggregate of 1,250,000 shares of our outstanding common stock. The program was in effect from January 1, 2024 until December 31, 2024, and we did not purchase any shares of our common stock under the stock repurchase program during 2024.
On December 5, 2024, we announced that our Board of Directors approved a new stock repurchase program authorizing the purchase of up to an aggregate of 1,250,000 shares of our outstanding common stock. The program will be in effect from January 1, 2025 until December 31, 2025, unless terminated earlier. The shares may, at the discretion of management, be repurchased from time to time in open market purchases as market conditions warrant or in privately negotiated transactions. We are not obligated to purchase any shares
76
under the program, and the program may be discontinued at any time. The actual timing, number and share price of shares purchased under the repurchase program will be determined by us at our discretion and will depend on a number of factors, including the market price of our stock, general market and economic conditions and applicable legal requirements. The shares authorized to be repurchased represented approximately 2.8% of the Company’s outstanding common stock at December 31, 2024. The Company purchased 543,599 and 569,599 shares under this program during the three and six months ended June 30, 2025.
Dividends declared on common shares were $4.6 million and $4.0 million for the three months ended June 30, 2025 and 2024, respectively. Dividends paid on common shares were $4.8 million and $4.1 million for the three months ended June 30, 2025 and 2024, respectively. Dividends declared on common shares were $9.1 million and $7.9 million for the six months ended June 30, 2025 and 2024, respectively. Dividends paid on common shares were $9.1 million and $8.0 million for the six months ended June 30, 2025 and 2024, respectively.
On July 22, 2025, our Board of Directors declared a cash dividend of $0.10 per share payable on August 18, 2025 to stockholders of record of our common stock as of August 4, 2025.
Off-Balance Sheet Items and Other Financing Arrangements
We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to extend credit, commercial letters of credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Condensed Consolidated Statements of Financial Condition. The contractual or notional amounts of those instruments reflect the extent of involvement we have in particular classes of financial instruments.
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. We evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by Byline Bank upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral is primarily obtained in the form of commercial and residential real estate (including income producing commercial properties).
Letters of credit are conditional commitments issued by Byline Bank to guarantee the performance of a customer to a third-party. Those guarantees are primarily issued to support public and private borrowing arrangements, bond financing and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.
Commitments to make loans are generally made for periods of 90 days or less. The fixed rate loan commitments have interest rates ranging from 2.69% to 15.00% and maturities up to 2046. Variable rate loan commitments have interest rates ranging from 3.50% to 17.75% and maturities up to 2048.
Our exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. We use the same credit policies in making commitments and conditional obligations as for funded instruments. We do not anticipate any material losses as a result of the commitments and standby letters of credit.
We enter into interest rate swaps that are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and its known or expected cash payments principally related to certain variable rate loans, money market accounts and variable rate borrowings. We also enter into interest rate swaps with certain qualified borrowers to facilitate the borrowers’ risk management strategies and concurrently entered into mirror-image derivatives with a third party counterparty.
We recognize derivative financial instruments at fair value regardless of the purpose or intent for holding the instrument. We record derivative assets and derivative liabilities on the Condensed Consolidated Statements of Financial Condition within accrued interest receivable and other assets, and accrued interest payable and other liabilities, respectively. Because the derivative assets and liabilities recorded on the balance sheet at June 30, 2025 do not represent the amounts that may ultimately be paid under these contracts, these assets and liabilities are listed in the table below (dollars in thousands):
|
|
June 30, 2025 |
|
|||||||||
|
|
|
|
|
Fair Value |
|
||||||
|
|
Notional |
|
|
Asset |
|
|
Liability |
|
|||
Interest rate swaps designated as cash flow hedges |
|
$ |
650,000 |
|
|
$ |
19,827 |
|
|
$ |
— |
|
Interest rate swaps designated as fair value hedges |
|
|
100,000 |
|
|
|
99 |
|
|
|
— |
|
Other interest rate derivatives |
|
|
1,125,181 |
|
|
|
14,580 |
|
|
|
(14,717 |
) |
Other credit derivatives |
|
|
15,745 |
|
|
|
10 |
|
|
|
(18 |
) |
See Note 16—Derivative Instruments and Hedge Activities of our Unaudited Interim Condensed Consolidated Financial Statements as of June 30, 2025, included in this report, and Note 21—Segment Information of our Consolidated Financial Statements, included in our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information on derivatives.
77
GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures
Some of the financial measures included in our "Selected Financial Data" are not measures of financial performance in accordance with GAAP. Our management uses the non‑GAAP financial measures set forth below in its analysis of our performance:
78
We believe that these non‑GAAP financial measures provide useful information to its management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that our non‑GAAP financial measures have a number of limitations. As such, you should not view these disclosures 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.
Reconciliations of Non-GAAP Financial Measures
|
|
As of or For the Three Months Ended June 30, |
|
|
As of or For the Six Months Ended |
|
||||||||||
(dollars in thousands, except per share data) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net income and earnings per share excluding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reported Net Income |
|
$ |
30,082 |
|
|
$ |
29,671 |
|
|
$ |
58,330 |
|
|
$ |
60,111 |
|
Significant items: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Merger-related expense |
|
|
4,450 |
|
|
|
— |
|
|
|
5,087 |
|
|
|
— |
|
Secondary public offering of common stock expenses |
|
|
413 |
|
|
|
— |
|
|
|
413 |
|
|
|
— |
|
Impairment charges on ROU assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
194 |
|
Tax benefit |
|
|
(1,117 |
) |
|
|
— |
|
|
|
(1,251 |
) |
|
|
(52 |
) |
Adjusted Net Income |
|
$ |
33,828 |
|
|
$ |
29,671 |
|
|
$ |
62,579 |
|
|
$ |
60,253 |
|
Reported Diluted Earnings per Share |
|
$ |
0.66 |
|
|
$ |
0.68 |
|
|
$ |
1.30 |
|
|
$ |
1.37 |
|
Significant items: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Merger-related expense |
|
|
0.10 |
|
|
|
— |
|
|
|
0.11 |
|
|
|
— |
|
Secondary public offering of common stock expenses |
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
Impairment charges on ROU assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Tax benefit |
|
|
(0.02 |
) |
|
|
— |
|
|
|
(0.03 |
) |
|
|
— |
|
Adjusted Diluted Earnings per Share |
|
$ |
0.75 |
|
|
$ |
0.68 |
|
|
$ |
1.39 |
|
|
$ |
1.37 |
|
79
|
As of or For the Three Months Ended June 30, |
|
|
As of or For the Six Months Ended June 30, |
|
||||||||||
(dollars in thousands) |
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Adjusted non-interest expense: |
|
|
|
|
|
|
|
|
|
|
|
||||
Non-interest expense |
$ |
59,602 |
|
|
$ |
53,210 |
|
|
$ |
116,031 |
|
|
$ |
107,019 |
|
Less: Merger-related expenses |
|
4,450 |
|
|
|
— |
|
|
|
5,087 |
|
|
|
— |
|
Less: Secondary public offering of common stock expenses |
|
413 |
|
|
|
— |
|
|
|
413 |
|
|
|
— |
|
Less: Impairment charges on ROU assets |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
194 |
|
Adjusted non-interest expense |
$ |
54,739 |
|
|
$ |
53,210 |
|
|
$ |
110,531 |
|
|
$ |
106,825 |
|
Adjusted non-interest expense excluding amortization of intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted non-interest expense |
$ |
54,739 |
|
|
$ |
53,210 |
|
|
$ |
110,531 |
|
|
$ |
106,825 |
|
Less: Amortization of intangible assets |
|
1,499 |
|
|
|
1,345 |
|
|
|
2,617 |
|
|
|
2,690 |
|
Adjusted non-interest expense excluding amortization of intangible assets |
$ |
53,240 |
|
|
$ |
51,865 |
|
|
$ |
107,914 |
|
|
$ |
104,135 |
|
Pre-tax pre-provision net income: |
|
|
|
|
|
|
|
|
|
|
|
||||
Pre-tax income |
$ |
38,928 |
|
|
$ |
40,115 |
|
|
$ |
76,400 |
|
|
$ |
80,677 |
|
Add: Provision for credit losses |
|
11,923 |
|
|
|
6,045 |
|
|
|
21,102 |
|
|
|
12,688 |
|
Pre-tax pre-provision net income |
$ |
50,851 |
|
|
$ |
46,160 |
|
|
$ |
97,502 |
|
|
$ |
93,365 |
|
Adjusted pre-tax pre-provision net income: |
|
|
|
|
|
|
|
|
|
|
|
||||
Pre-tax pre-provision net income |
$ |
50,851 |
|
|
$ |
46,160 |
|
|
$ |
97,502 |
|
|
$ |
93,365 |
|
Add: Merger-related expenses |
|
4,450 |
|
|
|
— |
|
|
|
5,087 |
|
|
|
— |
|
Add: Secondary public offering of common stock expenses |
|
413 |
|
|
|
— |
|
|
|
413 |
|
|
|
— |
|
Add: Impairment charges on ROU assets |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
194 |
|
Adjusted pre-tax pre-provision net income |
$ |
55,714 |
|
|
$ |
46,160 |
|
|
$ |
103,002 |
|
|
$ |
93,559 |
|
Taxable equivalent net interest income: |
|
|
|
|
|
|
|
|
|
|
|
||||
Net interest income |
$ |
95,970 |
|
|
$ |
86,526 |
|
|
$ |
184,186 |
|
|
$ |
172,067 |
|
Add: Tax-equivalent adjustment |
|
231 |
|
|
|
229 |
|
|
|
460 |
|
|
|
462 |
|
Net interest income, fully taxable equivalent |
$ |
96,201 |
|
|
$ |
86,755 |
|
|
$ |
184,646 |
|
|
$ |
172,529 |
|
Total revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||
Net interest income |
$ |
95,970 |
|
|
$ |
86,526 |
|
|
$ |
184,186 |
|
|
$ |
172,067 |
|
Add: non-interest income |
|
14,483 |
|
|
|
12,844 |
|
|
|
29,347 |
|
|
|
28,317 |
|
Total revenues |
$ |
110,453 |
|
|
$ |
99,370 |
|
|
$ |
213,533 |
|
|
$ |
200,384 |
|
Tangible common stockholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
||||
Total stockholders' equity |
$ |
1,192,416 |
|
|
$ |
1,033,014 |
|
|
$ |
1,192,416 |
|
|
$ |
1,033,014 |
|
Less: Goodwill and other intangibles |
|
203,508 |
|
|
|
200,788 |
|
|
|
203,508 |
|
|
|
200,788 |
|
Tangible common stockholders' equity |
$ |
988,908 |
|
|
$ |
832,226 |
|
|
$ |
988,908 |
|
|
$ |
832,226 |
|
Tangible assets: |
|
|
|
|
|
|
|
|
|
|
|
||||
Total assets |
$ |
9,720,218 |
|
|
$ |
9,633,815 |
|
|
$ |
9,720,218 |
|
|
$ |
9,633,815 |
|
Less: Goodwill and other intangibles |
|
203,508 |
|
|
|
200,788 |
|
|
|
203,508 |
|
|
|
200,788 |
|
Tangible assets |
$ |
9,516,710 |
|
|
$ |
9,433,027 |
|
|
$ |
9,516,710 |
|
|
$ |
9,433,027 |
|
Average tangible common stockholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
||||
Average total stockholders' equity |
$ |
1,178,554 |
|
|
$ |
1,008,802 |
|
|
$ |
1,144,550 |
|
|
$ |
1,003,804 |
|
Less: Average goodwill and other intangibles |
|
203,767 |
|
|
|
201,428 |
|
|
|
200,658 |
|
|
|
202,101 |
|
Average tangible common stockholders' equity |
$ |
974,787 |
|
|
$ |
807,374 |
|
|
$ |
943,892 |
|
|
$ |
801,703 |
|
Average tangible assets: |
|
|
|
|
|
|
|
|
|
|
|
||||
Average total assets |
$ |
9,633,817 |
|
|
$ |
9,140,736 |
|
|
$ |
9,411,526 |
|
|
$ |
9,085,839 |
|
Less: Average goodwill and other intangibles |
|
203,767 |
|
|
|
201,428 |
|
|
|
200,658 |
|
|
|
202,101 |
|
Average tangible assets |
$ |
9,430,050 |
|
|
$ |
8,939,308 |
|
|
$ |
9,210,868 |
|
|
$ |
8,883,738 |
|
Tangible net income: |
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
$ |
30,082 |
|
|
$ |
29,671 |
|
|
$ |
58,330 |
|
|
$ |
60,111 |
|
Add: After-tax intangible asset amortization |
|
1,107 |
|
|
|
987 |
|
|
|
1,933 |
|
|
|
1,973 |
|
Tangible net income |
$ |
31,189 |
|
|
$ |
30,658 |
|
|
$ |
60,263 |
|
|
$ |
62,084 |
|
Adjusted tangible net income: |
|
|
|
|
|
|
|
|
|
|
|
||||
Tangible net income |
$ |
31,189 |
|
|
$ |
30,658 |
|
|
$ |
60,263 |
|
|
$ |
62,084 |
|
Add: Merger-related expenses |
|
4,450 |
|
|
|
— |
|
|
|
5,087 |
|
|
|
— |
|
Add: Secondary public offering of common stock expenses |
|
413 |
|
|
|
— |
|
|
|
413 |
|
|
|
— |
|
Add: Impairment charges on ROU assets |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
194 |
|
Add: Tax benefit on significant items |
|
(1,117 |
) |
|
|
— |
|
|
|
(1,251 |
) |
|
|
(52 |
) |
Adjusted tangible net income |
$ |
34,935 |
|
|
$ |
30,658 |
|
|
$ |
64,512 |
|
|
$ |
62,226 |
|
80
|
As of or For the Three Months Ended June 30, |
|
|
As of or For the Six Months Ended June 30, |
|
||||||||||
(dollars in thousands, except share and per share data) |
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Pre-tax pre-provision return on average assets: |
|
|
|
|
|
|
|
|
|
|
|
||||
Pre-tax pre-provision net income |
$ |
50,851 |
|
|
$ |
46,160 |
|
|
$ |
97,502 |
|
|
$ |
93,365 |
|
Average total assets |
|
9,633,817 |
|
|
|
9,140,736 |
|
|
|
9,411,526 |
|
|
|
9,085,839 |
|
Pre-tax pre-provision return on |
|
2.12 |
% |
|
|
2.03 |
% |
|
|
2.09 |
% |
|
|
2.07 |
% |
Adjusted pre-tax pre-provision return on average assets: |
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted pre-tax pre-provision net income |
$ |
55,714 |
|
|
$ |
46,160 |
|
|
$ |
103,002 |
|
|
$ |
93,559 |
|
Average total assets |
|
9,633,817 |
|
|
|
9,140,736 |
|
|
|
9,411,526 |
|
|
|
9,085,839 |
|
Adjusted pre-tax pre-provision return on |
|
2.32 |
% |
|
|
2.03 |
% |
|
|
2.21 |
% |
|
|
2.07 |
% |
Net interest margin, fully taxable equivalent |
|
|
|
|
|
|
|
|
|
|
|
||||
Net interest income, fully taxable equivalent |
$ |
96,201 |
|
|
$ |
86,755 |
|
|
$ |
184,646 |
|
|
$ |
172,529 |
|
Total average interest-earning assets |
|
9,208,156 |
|
|
|
8,743,462 |
|
|
|
8,998,055 |
|
|
|
8,673,521 |
|
Net interest margin, fully taxable equivalent |
|
4.19 |
% |
|
|
3.99 |
% |
|
|
4.14 |
% |
|
|
4.00 |
% |
Non-interest income to total revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||
Non-interest income |
$ |
14,483 |
|
|
$ |
12,844 |
|
|
$ |
29,347 |
|
|
$ |
28,317 |
|
Total revenues |
|
110,453 |
|
|
|
99,370 |
|
|
|
213,533 |
|
|
|
200,384 |
|
Non-interest income to total revenues |
|
13.11 |
% |
|
|
12.93 |
% |
|
|
13.74 |
% |
|
|
14.13 |
% |
Adjusted non-interest expense to average assets: |
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted non-interest expense |
$ |
54,739 |
|
|
$ |
53,210 |
|
|
$ |
110,531 |
|
|
$ |
106,825 |
|
Average total assets |
|
9,633,817 |
|
|
|
9,140,736 |
|
|
|
9,411,526 |
|
|
|
9,085,839 |
|
Adjusted non-interest expense to average assets |
|
2.28 |
% |
|
|
2.34 |
% |
|
|
2.37 |
% |
|
|
2.36 |
% |
Adjusted efficiency ratio: |
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted non-interest expense excluding |
$ |
53,240 |
|
|
$ |
51,865 |
|
|
$ |
107,914 |
|
|
$ |
104,135 |
|
Total revenues |
|
110,453 |
|
|
|
99,370 |
|
|
|
213,533 |
|
|
|
200,384 |
|
Adjusted efficiency ratio |
|
48.20 |
% |
|
|
52.19 |
% |
|
|
50.54 |
% |
|
|
51.97 |
% |
Adjusted return on average assets: |
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted net income |
$ |
33,828 |
|
|
$ |
29,671 |
|
|
$ |
62,579 |
|
|
$ |
60,253 |
|
Average total assets |
|
9,633,817 |
|
|
|
9,140,736 |
|
|
|
9,411,526 |
|
|
|
9,085,839 |
|
Adjusted return on average assets |
|
1.41 |
% |
|
|
1.31 |
% |
|
|
1.34 |
% |
|
|
1.33 |
% |
Adjusted return on average stockholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted net income |
$ |
33,828 |
|
|
$ |
29,671 |
|
|
$ |
62,579 |
|
|
$ |
60,253 |
|
Average stockholders' equity |
|
1,178,554 |
|
|
|
1,008,802 |
|
|
|
1,144,550 |
|
|
|
1,003,804 |
|
Adjusted return on average stockholders' equity |
|
11.51 |
% |
|
|
11.83 |
% |
|
|
11.03 |
% |
|
|
12.07 |
% |
Tangible common equity to tangible assets: |
|
|
|
|
|
|
|
|
|
|
|
||||
Tangible common equity |
$ |
988,908 |
|
|
$ |
832,226 |
|
|
$ |
988,908 |
|
|
$ |
832,226 |
|
Tangible assets |
|
9,516,710 |
|
|
|
9,433,027 |
|
|
|
9,516,710 |
|
|
|
9,433,027 |
|
Tangible common equity to tangible assets |
|
10.39 |
% |
|
|
8.82 |
% |
|
|
10.39 |
% |
|
|
8.82 |
% |
Return on average tangible common |
|
|
|
|
|
|
|
|
|
|
|
||||
Tangible net income |
$ |
31,189 |
|
|
$ |
30,658 |
|
|
$ |
60,263 |
|
|
$ |
62,084 |
|
Average tangible common stockholders' equity |
|
974,787 |
|
|
|
807,374 |
|
|
|
943,892 |
|
|
|
801,703 |
|
Return on average tangible common |
|
12.83 |
% |
|
|
15.27 |
% |
|
|
12.87 |
% |
|
|
15.57 |
% |
Adjusted return on average tangible common |
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted tangible net income |
$ |
34,935 |
|
|
$ |
30,658 |
|
|
$ |
64,512 |
|
|
$ |
62,226 |
|
Average tangible common stockholders' equity |
|
974,787 |
|
|
|
807,374 |
|
|
|
943,892 |
|
|
|
801,703 |
|
Adjusted return on average tangible common |
|
14.37 |
% |
|
|
15.27 |
% |
|
|
13.78 |
% |
|
|
15.61 |
% |
Tangible book value per share: |
|
|
|
|
|
|
|
|
|
|
|
||||
Tangible common equity |
$ |
988,908 |
|
|
$ |
832,226 |
|
|
$ |
988,908 |
|
|
$ |
832,226 |
|
Common shares outstanding |
|
45,866,649 |
|
|
|
44,180,829 |
|
|
|
45,866,649 |
|
|
|
44,180,829 |
|
Tangible book value per share |
$ |
21.56 |
|
|
$ |
18.84 |
|
|
$ |
21.56 |
|
|
$ |
18.84 |
|
81
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Our primary market risk is interest rate risk, which is defined as the risk of loss of net interest income or net interest margin because of changes in interest rates.
We seek to measure and manage the potential impact of interest rate risk. Interest rate risk occurs when interest-earning assets and interest-bearing liabilities mature or re-price at different times, on a different basis or in unequal amounts. Interest rate risk also arises when our assets, liabilities and off-balance sheet contracts each respond differently to changes in interest rates, including as a result of explicit and implicit provisions in agreements related to such assets and liabilities and in off-balance sheet contracts that alter the applicable interest rate and cash flow characteristics as interest rates change.
We are also exposed to interest rate risk through the retained portion of the U.S. government guaranteed loans we make and the related servicing rights. Our U.S. government guaranteed loan portfolio is comprised primarily of SBA 7(a) loans, virtually all of which are quarterly or monthly adjustable with the prime rate. The SBA portfolio reacts differently in a rising rate environment than our other non-guaranteed portfolios. Generally, when interest rates rise, the prepayments in the SBA portfolio tend to increase.
Our management of interest rate risk is overseen by our Board of Directors and management asset liability committees based on a risk management infrastructure approved by our Board of Directors that outline reporting and measurement requirements. Our risk management infrastructure also requires a periodic review of all key assumptions used, such as identifying appropriate interest rate scenarios, setting loan prepayment rates based on historical analysis, non-interest-bearing and interest-bearing demand deposit decay rate assumptions, liability repricing beta based on historical analysis and the targeted investment term of capital. The committees closely monitor our interest sensitivity exposure, asset and liability allocation decisions, liquidity and capital positions, and local and national economic conditions and attempts to structure the loan and investment portfolios and funding sources to maximize earnings within acceptable risk tolerances.
We manage the interest rate risk associated with our interest-bearing liabilities by managing the interest rates and tenors associated with our borrowings from the Federal Home Loan Bank our other borrowings, and deposits from our customers that we rely on for funding. We manage the interest rate risk associated with our interest-earning assets by managing the interest rates and tenors associated with our investment and loan portfolios, from time to time purchasing and selling investment securities.
We utilize interest rate derivatives to hedge our interest rate exposure on commercial loans when it meets our customers’ and Byline Bank’s needs. As of June 30, 2025, we had a notional amount of $1.9 billion of interest rate derivatives outstanding that includes customer derivatives and those on Byline Bank's balance sheet. The overall effectiveness of our hedging strategies is subject to market conditions, the quality of our execution, the accuracy of our valuation assumptions, the associated counterparty credit risk and changes in interest rates.
We do not engage in speculative trading activities relating to interest rates, foreign exchange rates, commodity prices, equities or credit.
Evaluation of Interest Rate Risk
We evaluate interest rate risk through the use of two different models: net interest income ("NII") simulations and economic value of equity ("EVE") simulations. The simulations provide an estimate of the impact of changes in interest rates on equity and net interest income based on a variety of assumptions. Changes in assumptions may significantly alter the results of our simulations.
We use an NII simulation model to measure and evaluate potential changes in our net interest income. We run various hypothetical interest rate scenarios at least quarterly and compare these results against a scenario with no changes in interest rates. Our NII simulation model incorporates various assumptions, which we believe are reasonable but which may have a significant impact on results such as: (1) asset prepayment speed assumptions, (2) predefined credit spreads for both investment securities and loans, (3) re-pricing characteristics for market-rate-sensitive instruments on and off balance sheet, and (4) the effect of interest rate limitations in our assets, such as floors and caps. Because of limitations inherent in any approach used to measure interest rate risk, simulation results are not intended as a forecast of the actual effect of a change in market interest rates on our results but rather as a means to better plan and execute appropriate asset-liability management strategies and manage our interest rate risk.
We use an EVE simulation to analyze the Company's long-term view of interest rate risk as it analyzes the Company's future cash flows. EVE is defined as the present value of the Company's assets, less the present value of its liabilities, adjusted for off-balance sheet items, with the results showing a theoretical change in the economic value of stockholders' equity as interest rates change. Our EVE simulation model incorporates various assumptions, which we believe are reasonable but which may have a significant impact on results such as: (1) asset prepayment speed assumptions, (2) deposit decay rate assumptions, (3) predefined credit spreads for both investment securities and loans (4) re-pricing characteristics for market-rate-sensitive instruments on and off balance sheet, (5) amortization schedule, and (6) discount rates associated with the products on balance sheet.
82
Potential changes to our net interest income and economic value of equity in hypothetical rising and declining interest rate scenarios calculated as of June 30, 2025 are presented below.
|
|
Estimated Increase/Decrease in |
|
Estimated Percentage |
||
|
|
Twelve Months Ending June 30, |
|
As of |
||
Basis Point Change in Interest Rates |
|
2026 |
|
2027 |
|
June 30, 2025 |
+300 |
|
10.1% |
|
15.1% |
|
(14.0)% |
+200 |
|
7.5% |
|
10.7% |
|
(8.9)% |
+100 |
|
4.1% |
|
5.7% |
|
(4.3)% |
-100 |
|
(2.9)% |
|
(4.9)% |
|
3.9% |
-200 |
|
(5.6)% |
|
(10.1)% |
|
6.1% |
-300 |
|
(6.5)% |
|
(13.7)% |
|
5.6% |
We also conduct NII simulations that incorporate a dynamic balance sheet and ramp rate shock scenarios. The balance sheet reflects management’s growth expectations, while interest rates are modeled using an implied forward yield curve, reflecting market expectations of future rate movements. Ramp rate shocks are applied gradually, shifting up or down by 1/12th of the total change each month over the first 12 months. Under these scenarios, a gradual 100 and 200 basis point downward ramp rate shock would decrease NII by 2.2% and 4.2%, respectively, over the next 12 months. Conversely, a gradual 100 and 200 basis point upward ramp rate shock would increase NII by 2.7% and 5.4%, respectively, over the same period.
The Bank's aggregate interest rate risk exposure is monitored and managed based on the economic outlook and under guidance of board-approved policy limits. The results of the simulations are hypothetical, and a variety of factors might cause actual results to differ substantially from what is depicted, including: the timing, magnitude, and frequency of interest rate changes, changes in market conditions, depositor behavior changes, and management strategies.
Item 4. Controls and Procedures.
The Company’s management, including our Chief Executive Officer and our Chief Financial Officer, have evaluated the effectiveness of our "disclosure controls and procedures" (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")), as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of June 30, 2025, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and is accumulated and communicated to the Company’s management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting during the quarter ended June 30, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
The design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
83
PART II-OTHER INFORMATION
Item 1. Legal Proceedings.
We operate in a highly regulated environment. From time to time we are a party to various litigation matters incidental to the conduct of our business. We are not presently party to any legal proceedings the resolution of which we believe would have a material adverse effect on our business, prospects, financial condition, liquidity, results of operation, cash flows or capital levels.
Item 1A. Risk Factors.
There have been no material changes to the risk factors previously disclosed in the "Risk Factors" section included in our Form 10-K for our fiscal year ended December 31, 2024 that was filed with the SEC on February 28, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
On December 5, 2024, we announced that our Board of Directors approved a new stock repurchase program authorizing the purchase of up to an aggregate of 1,250,000 shares of our outstanding common stock. The program is in effect from January 1, 2025 until December 31, 2025 unless terminated earlier. The shares may, at the discretion of management, be repurchased from time to time in open market purchases as market conditions warrant or in privately negotiated transactions. We are not obligated to purchase any shares under the program, and the program may be discontinued at any time. The actual timing, number and share price of shares purchased under the repurchase program will be determined by us at our discretion and will depend on a number of factors, including the market price of our stock, general market and economic conditions and applicable legal requirements.
The table below includes information regarding purchases of our common stock during the quarter ended June 30, 2025.
Issuer Purchases of Equity Securities |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Maximum Number of |
|
||||
|
|
Total |
|
|
Average |
|
|
Total Number of Shares |
|
|
Shares that |
|
||||
|
|
Number of |
|
|
Price |
|
|
Purchased as Part of a |
|
|
May Yet Be |
|
||||
|
|
Shares |
|
|
Paid per |
|
|
Publicly Announced |
|
|
Purchased Under the |
|
||||
|
|
Purchased(1) |
|
|
Share |
|
|
Plan or Program |
|
|
Plan or Program |
|
||||
April 1 - April 30, 2025 |
|
|
105,973 |
|
|
$ |
24.34 |
|
|
|
102,000 |
|
|
|
1,224,000 |
|
May 1 - May 31, 2025 |
|
|
25,390 |
|
|
|
26.37 |
|
|
|
23,364 |
|
|
|
1,200,636 |
|
June 1 - June 30, 2025 |
|
|
624,668 |
|
|
|
24.42 |
|
|
|
418,235 |
|
|
|
782,401 |
|
Total |
|
|
756,031 |
|
|
$ |
24.48 |
|
|
|
543,599 |
|
|
|
|
|
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
84
Item 6. Exhibits.
|
|
EXHIBIT |
Number |
|
Description |
3.1 |
|
Amended and Restated Certificate of Incorporation (filed as Exhibit 3.1 to the Company’s Registration Statement on Form S-1, as amended (File No. 333-218362) filed on June 19, 2017 and incorporated herein by reference) |
3.2 |
|
Amended and Restated Bylaws (filed as Exhibit 3.2 to the Company’s Registration Statement on Form S-1, as amended (File No. 333-218362) filed on June 19, 2017 and incorporated herein by reference) |
4.1 |
|
Certain instruments defining the rights of holders of long-term debt securities of the registrant and its subsidiaries are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. The registrant hereby undertakes to furnish to the SEC, upon request, copies of any such instruments. |
10.1 |
|
Second Amendment to Second Amended and Restated Term Loan and Revolving Credit Agreement, dated May |
31.1 |
|
Certification of the Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, and Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 |
|
Certification of the Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, and Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1(a) |
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
101 |
|
Financial information from the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2025, formatted in Inline XBRL interactive data files pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Statements of Condition; (ii) Condensed Consolidated Statements of Operations; (iii) Condensed Consolidated Statements of Comprehensive Income (Loss); (iv) Condensed Consolidated Statements of Changes in Stockholders’ Equity; (v) Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Condensed Consolidated Financial Statements |
104 |
|
Cover Page Interactive Data File – the cover page XBRL tags are embedded with the Inline XBRL document. |
85
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
Byline Bancorp, Inc.
|
||
Date: August 7, 2025 |
By: |
/s/ |
Roberto R. Herencia |
|
|
|
Roberto R. Herencia |
|
|
|
Chief Executive Officer |
|
|
|
(Principal Executive Officer) |
|
|
|
|
Date: August 7, 2025 |
By: |
/s/ |
Thomas J. Bell III |
|
|
|
Thomas J. Bell III |
|
|
|
Executive Vice President, Chief Financial Officer and Treasurer |
|
|
|
(Principal Financial Officer) |
86
FAQ
How many Corning (GLW) shares are planned for sale under this Form 144?
What is the estimated market value of the planned GLW share sale?
When could the GLW shares be sold?
What percentage of Corning’s shares outstanding does the proposed sale represent?
How were the shares originally acquired by the insider?
Has the insider sold any GLW shares in the last three months?
