UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30,March 31, 20232024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______to ______
Commission File Number 001-38139
Byline Bancorp, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware | 36-3012593 | |
(State or Other Jurisdiction of Incorporation or Organization) |
| (IRS Employer Identification Number) |
180 North LaSalle Street, Suite 300
Chicago, Illinois 60601
(Address of Principal Executive Offices)
(773) 244-7000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934.
Large accelerated filer | ☐ | Accelerated filer | ☒ | |
Non-accelerated filer | ☐ |
| Smaller reporting company | ☐ |
|
|
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered |
Common Stock | BY | New York Stock Exchange |
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
Common Stock, $0.01 par value, 43,716,71344,124,124 shares outstanding as of November 1, 2023April 30, 2024
BYLINE BANCORP, INC.
FORM 10-Q
September 30, 2023March 31, 2024
INDEX
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| Page |
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PART I. |
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| 3 | |
Item 1. |
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| 3 | |
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| Notes to Unaudited Interim Condensed Consolidated Financial Statements |
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Item 2. |
| Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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PART II. |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 3. |
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Item 4. |
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Item 5. |
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Item 6. |
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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) |
| September 30, 2023 |
|
| December 31, 2022 |
|
| March 31, 2024 |
|
| December 31, 2023 |
| ||||
ASSETS |
|
|
|
|
|
|
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| ||||
Cash and due from banks |
| $ | 71,248 |
|
| $ | 62,274 |
|
| $ | 58,640 |
|
| $ | 60,431 |
|
Interest bearing deposits with other banks |
|
| 357,640 |
|
|
| 117,079 |
|
|
| 578,197 |
|
|
| 165,705 |
|
Cash and cash equivalents |
|
| 428,888 |
|
|
| 179,353 |
|
|
| 636,837 |
|
|
| 226,136 |
|
Equity and other securities, at fair value |
|
| 7,902 |
|
|
| 7,989 |
|
|
| 9,135 |
|
|
| 8,743 |
|
Securities available-for-sale, at fair value (amortized cost |
|
| 1,239,929 |
|
|
| 1,174,431 |
| ||||||||
Securities held-to-maturity, at amortized cost (fair value |
|
| 1,157 |
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|
| 2,705 |
| ||||||||
Securities available-for-sale, at fair value (amortized cost |
|
| 1,379,147 |
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| 1,342,480 |
| ||||||||
Securities held-to-maturity, at amortized cost (fair value |
|
| 1,156 |
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|
| 1,157 |
| ||||||||
Restricted stock, at cost |
|
| 30,505 |
|
|
| 28,202 |
|
|
| 22,793 |
|
|
| 16,304 |
|
Loans held for sale |
|
| 7,299 |
|
|
| 47,823 |
|
|
| 23,568 |
|
|
| 18,005 |
|
Loans and leases: |
|
|
|
|
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| ||||
Loans and leases |
|
| 6,613,303 |
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|
| 5,421,258 |
|
|
| 6,778,214 |
|
|
| 6,684,306 |
|
Allowance for credit losses - loans and leases |
|
| (105,696 | ) |
|
| (81,924 | ) |
|
| (102,366 | ) |
|
| (101,686 | ) |
Net loans and leases |
|
| 6,507,607 |
|
|
| 5,339,334 |
|
|
| 6,675,848 |
|
|
| 6,582,620 |
|
Servicing assets, at fair value |
|
| 19,743 |
|
|
| 19,172 |
|
|
| 20,992 |
|
|
| 19,844 |
|
Premises and equipment, net |
|
| 67,121 |
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|
| 56,798 |
|
|
| 64,466 |
|
|
| 66,627 |
|
Other real estate owned, net |
|
| 1,671 |
|
|
| 4,717 |
| ||||||||
Goodwill and other intangible assets, net |
|
| 205,028 |
|
|
| 158,887 |
|
|
| 202,133 |
|
|
| 203,478 |
|
Bank-owned life insurance |
|
| 96,268 |
|
|
| 82,093 |
|
|
| 97,748 |
|
|
| 96,900 |
|
Deferred tax assets, net |
|
| 89,841 |
|
|
| 68,213 |
|
|
| 53,029 |
|
|
| 50,058 |
|
Accrued interest receivable and other assets |
|
| 240,409 |
|
|
| 193,224 |
|
|
| 223,651 |
|
|
| 249,615 |
|
Total assets |
| $ | 8,943,368 |
|
| $ | 7,362,941 |
|
| $ | 9,410,503 |
|
| $ | 8,881,967 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| ||||
LIABILITIES |
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Non-interest-bearing demand deposits |
| $ | 1,959,855 |
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| $ | 2,138,645 |
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| $ | 1,851,727 |
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| $ | 1,905,876 |
|
Interest-bearing deposits |
|
| 4,993,835 |
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|
| 3,556,476 |
|
|
| 5,498,475 |
|
|
| 5,271,123 |
|
Total deposits |
|
| 6,953,690 |
|
|
| 5,695,121 |
|
|
| 7,350,202 |
|
|
| 7,176,999 |
|
Other borrowings |
|
| 713,233 |
|
|
| 640,399 |
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|
| 721,173 |
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|
| 395,190 |
|
Subordinated notes, net |
|
| 73,822 |
|
|
| 73,691 |
|
|
| 73,909 |
|
|
| 73,866 |
|
Junior subordinated debentures issued to capital trusts, net |
|
| 70,336 |
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|
| 37,338 |
|
|
| 70,567 |
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|
| 70,452 |
|
Accrued interest payable and other liabilities |
|
| 212,342 |
|
|
| 150,576 |
|
|
| 185,603 |
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|
| 175,309 |
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Total liabilities |
|
| 8,023,423 |
|
|
| 6,597,125 |
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|
| 8,401,454 |
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|
| 7,891,816 |
|
COMMITMENTS AND CONTINGENT LIABILITIES (Note 14) |
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STOCKHOLDERS’ EQUITY |
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Preferred stock |
|
| — |
|
|
| — |
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|
| — |
|
|
| — |
|
Common stock |
|
| 450 |
|
|
| 389 |
|
|
| 452 |
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|
| 451 |
|
Additional paid-in capital |
|
| 708,615 |
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| 598,297 |
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|
| 708,844 |
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| 710,488 |
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Retained earnings |
|
| 403,368 |
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|
| 335,794 |
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| 455,532 |
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|
| 429,036 |
|
Treasury stock, at cost |
|
| (50,329 | ) |
|
| (51,114 | ) |
|
| (48,869 | ) |
|
| (49,707 | ) |
Accumulated other comprehensive loss, net of tax |
|
| (142,159 | ) |
|
| (117,550 | ) |
|
| (106,910 | ) |
|
| (100,117 | ) |
Total stockholders’ equity |
|
| 919,945 |
|
|
| 765,816 |
|
|
| 1,009,049 |
|
|
| 990,151 |
|
Total liabilities and stockholders’ equity |
| $ | 8,943,368 |
|
| $ | 7,362,941 |
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| $ | 9,410,503 |
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| $ | 8,881,967 |
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|
| September 30, 2023 |
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| December 31, 2022 |
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| March 31, 2024 |
|
| December 31, 2023 |
| ||||||||||||||||||||
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| Preferred |
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| Common |
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| Preferred |
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| Common |
|
| Preferred |
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| Common |
|
| Preferred |
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| Common |
| ||||||||
Par value |
| $ | 0.01 |
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| $ | 0.01 |
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| $ | 0.01 |
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| $ | 0.01 |
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| $ | 0.01 |
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| $ | 0.01 |
|
| $ | 0.01 |
|
| $ | 0.01 |
|
Shares authorized |
|
| 25,000,000 |
|
|
| 150,000,000 |
|
|
| 25,000,000 |
|
|
| 150,000,000 |
|
|
| 25,000,000 |
|
|
| 150,000,000 |
|
|
| 25,000,000 |
|
|
| 150,000,000 |
|
Shares issued |
|
| — |
|
|
| 45,694,456 |
|
|
| — |
|
|
| 39,518,702 |
|
|
| — |
|
|
| 45,946,804 |
|
|
| — |
|
|
| 45,714,241 |
|
Shares outstanding |
|
| — |
|
|
| 43,719,203 |
|
|
| — |
|
|
| 37,492,775 |
|
|
| — |
|
|
| 44,108,387 |
|
|
| — |
|
|
| 43,764,056 |
|
Treasury shares |
|
| — |
|
|
| 1,975,253 |
|
|
| — |
|
|
| 2,025,927 |
|
|
| — |
|
|
| 1,838,417 |
|
|
| — |
|
|
| 1,950,185 |
|
See accompanying Notes to Unaudited Interim Condensed Consolidated Financial Statements.
3
BYLINE BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
| Three Months Ended |
|
| Nine Months Ended |
|
| Three Months Ended |
| |||||||||||||||
|
| September 30, |
|
| September 30, |
|
| March 31, |
| |||||||||||||||
(dollars in thousands, except share and per share data) |
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||||
INTEREST AND DIVIDEND INCOME |
|
|
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|
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| ||||||
Interest and fees on loans and leases |
| $ | 125,465 |
|
| $ | 72,824 |
|
| $ | 316,942 |
|
| $ | 187,924 |
|
| $ | 123,792 |
|
| $ | 92,343 |
|
Interest on securities |
|
| 8,415 |
|
|
| 6,402 |
|
|
| 21,574 |
|
|
| 18,821 |
|
|
| 9,734 |
|
|
| 6,600 |
|
Other interest and dividend income |
|
| 2,710 |
|
|
| 677 |
|
|
| 5,348 |
|
|
| 1,522 |
|
|
| 4,795 |
|
|
| 1,059 |
|
Total interest and dividend income |
|
| 136,590 |
|
|
| 79,903 |
|
|
| 343,864 |
|
|
| 208,267 |
|
|
| 138,321 |
|
|
| 100,002 |
|
INTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Deposits |
|
| 37,163 |
|
|
| 5,971 |
|
|
| 78,184 |
|
|
| 9,186 |
|
|
| 45,962 |
|
|
| 16,298 |
|
Other borrowings |
|
| 3,981 |
|
|
| 3,232 |
|
|
| 14,110 |
|
|
| 4,724 |
|
|
| 3,824 |
|
|
| 5,888 |
|
Subordinated notes and debentures |
|
| 2,994 |
|
|
| 1,825 |
|
|
| 7,234 |
|
|
| 5,119 |
|
|
| 2,994 |
|
|
| 2,098 |
|
Total interest expense |
|
| 44,138 |
|
|
| 11,028 |
|
|
| 99,528 |
|
|
| 19,029 |
|
|
| 52,780 |
|
|
| 24,284 |
|
Net interest income |
|
| 92,452 |
|
|
| 68,875 |
|
|
| 244,336 |
|
|
| 189,238 |
|
|
| 85,541 |
|
|
| 75,718 |
|
PROVISION FOR CREDIT LOSSES |
|
| 8,803 |
|
|
| 4,176 |
|
|
| 24,418 |
|
|
| 15,079 |
|
|
| 6,643 |
|
|
| 9,825 |
|
Net interest income after provision |
|
| 83,649 |
|
|
| 64,699 |
|
|
| 219,918 |
|
|
| 174,159 |
|
|
| 78,898 |
|
|
| 65,893 |
|
NON-INTEREST INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Fees and service charges on deposits |
|
| 2,372 |
|
|
| 2,128 |
|
|
| 6,725 |
|
|
| 6,071 |
|
|
| 2,427 |
|
|
| 2,120 |
|
Loan servicing revenue |
|
| 3,369 |
|
|
| 3,422 |
|
|
| 10,126 |
|
|
| 10,186 |
|
|
| 3,364 |
|
|
| 3,380 |
|
Loan servicing asset revaluation |
|
| (3,646 | ) |
|
| (2,342 | ) |
|
| (3,855 | ) |
|
| (8,209 | ) |
|
| (703 | ) |
|
| 656 |
|
ATM and interchange fees |
|
| 1,205 |
|
|
| 1,007 |
|
|
| 3,380 |
|
|
| 3,187 |
|
|
| 1,075 |
|
|
| 1,063 |
|
Net realized gains (losses) on securities available-for-sale |
|
| — |
|
|
| (2 | ) |
|
| — |
|
|
| 50 |
| ||||||||
Change in fair value of equity securities, net |
|
| (313 | ) |
|
| (581 | ) |
|
| 230 |
|
|
| (1,313 | ) |
|
| 392 |
|
|
| 350 |
|
Net gains on sales of loans |
|
| 6,473 |
|
|
| 5,580 |
|
|
| 17,325 |
|
|
| 26,390 |
|
|
| 5,533 |
|
|
| 5,148 |
|
Wealth management and trust income |
|
| 939 |
|
|
| 995 |
|
|
| 2,902 |
|
|
| 2,943 |
|
|
| 1,157 |
|
|
| 924 |
|
Other non-interest income |
|
| 1,977 |
|
|
| 1,785 |
|
|
| 4,979 |
|
|
| 6,274 |
|
|
| 2,228 |
|
|
| 1,504 |
|
Total non-interest income |
|
| 12,376 |
|
|
| 11,992 |
|
|
| 41,812 |
|
|
| 45,579 |
|
|
| 15,473 |
|
|
| 15,145 |
|
NON-INTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Salaries and employee benefits |
|
| 34,969 |
|
|
| 29,587 |
|
|
| 95,005 |
|
|
| 86,243 |
|
|
| 33,953 |
|
|
| 30,394 |
|
Occupancy and equipment expense, net |
|
| 5,314 |
|
|
| 3,919 |
|
|
| 14,162 |
|
|
| 13,456 |
|
|
| 5,284 |
|
|
| 4,444 |
|
Impairment charge on assets held for sale |
|
| — |
|
|
| — |
|
|
| 20 |
|
|
| — |
|
|
| — |
|
|
| 20 |
|
Loan and lease related expenses |
|
| 836 |
|
|
| 530 |
|
|
| 2,287 |
|
|
| 581 |
|
|
| 685 |
|
|
| 963 |
|
Legal, audit and other professional fees |
|
| 3,805 |
|
|
| 2,733 |
|
|
| 10,594 |
|
|
| 7,153 |
|
|
| 2,719 |
|
|
| 3,114 |
|
Data processing |
|
| 6,472 |
|
|
| 3,370 |
|
|
| 14,527 |
|
|
| 9,952 |
|
|
| 4,145 |
|
|
| 3,783 |
|
Net loss recognized on other real estate owned |
|
| 111 |
|
|
| 275 |
|
|
| 296 |
|
|
| 487 |
| ||||||||
Net gain recognized on other real estate owned |
|
| (98 | ) |
|
| (103 | ) | ||||||||||||||||
Other intangible assets amortization expense |
|
| 1,551 |
|
|
| 1,611 |
|
|
| 4,461 |
|
|
| 5,075 |
|
|
| 1,345 |
|
|
| 1,455 |
|
Other non-interest expense |
|
| 4,833 |
|
|
| 4,153 |
|
|
| 14,667 |
|
|
| 11,559 |
|
|
| 5,776 |
|
|
| 4,730 |
|
Total non-interest expense |
|
| 57,891 |
|
|
| 46,178 |
|
|
| 156,019 |
|
|
| 134,506 |
|
|
| 53,809 |
|
|
| 48,800 |
|
INCOME BEFORE PROVISION FOR INCOME TAXES |
|
| 38,134 |
|
|
| 30,513 |
|
|
| 105,711 |
|
|
| 85,232 |
|
|
| 40,562 |
|
|
| 32,238 |
|
PROVISION FOR INCOME TAXES |
|
| 9,912 |
|
|
| 7,857 |
|
|
| 27,437 |
|
|
| 19,982 |
|
|
| 10,122 |
|
|
| 8,293 |
|
NET INCOME |
|
| 28,222 |
|
|
| 22,656 |
|
|
| 78,274 |
|
|
| 65,250 |
|
| $ | 30,440 |
|
| $ | 23,945 |
|
Dividends on preferred shares |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 196 |
| ||||||||
INCOME AVAILABLE TO COMMON STOCKHOLDERS |
| $ | 28,222 |
|
| $ | 22,656 |
|
| $ | 78,274 |
|
| $ | 65,054 |
| ||||||||
EARNINGS PER COMMON SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Basic |
| $ | 0.66 |
|
| $ | 0.61 |
|
| $ | 2.01 |
|
| $ | 1.76 |
|
| $ | 0.70 |
|
| $ | 0.65 |
|
Diluted |
| $ | 0.65 |
|
| $ | 0.61 |
|
| $ | 1.98 |
|
| $ | 1.73 |
|
| $ | 0.70 |
|
| $ | 0.64 |
|
See accompanying Notes to Unaudited Interim Condensed Consolidated Financial Statements.
4
BYLINE BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
|
| Three Months Ended |
|
| Nine Months Ended |
|
| Three Months Ended |
| |||||||||||||||
|
| September 30, |
|
| September 30, |
|
| March 31, |
| |||||||||||||||
(dollars in thousands) |
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||||
Net income |
| $ | 28,222 |
|
| $ | 22,656 |
|
| $ | 78,274 |
|
| $ | 65,250 |
|
| $ | 30,440 |
|
| $ | 23,945 |
|
Securities available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Unrealized holding losses arising during the period |
|
| (37,330 | ) |
|
| (66,365 | ) |
|
| (36,553 | ) |
|
| (205,036 | ) | ||||||||
Reclassification adjustments for net (gains) losses |
|
| — |
|
|
| 2 |
|
|
| — |
|
|
| (50 | ) | ||||||||
Unrealized holding gains (losses) arising during the period |
|
| (8,959 | ) |
|
| 14,599 |
| ||||||||||||||||
Tax effect |
|
| 9,970 |
|
|
| 18,004 |
|
|
| 9,763 |
|
|
| 55,640 |
|
|
| 2,389 |
|
|
| (3,900 | ) |
Net of tax |
|
| (27,360 | ) |
|
| (48,359 | ) |
|
| (26,790 | ) |
|
| (149,446 | ) |
|
| (6,570 | ) |
|
| 10,699 |
|
Cash flow hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Unrealized holding gains arising during the period |
|
| 4,648 |
|
|
| 20,531 |
|
|
| 13,357 |
|
|
| 45,088 |
|
|
| 4,531 |
|
|
| 194 |
|
Reclassification adjustments for net gains included |
|
| (4,562 | ) |
|
| (327 | ) |
|
| (10,381 | ) |
|
| (8 | ) |
|
| (4,836 | ) |
|
| (1,956 | ) |
Tax effect |
|
| (23 | ) |
|
| (5,481 | ) |
|
| (795 | ) |
|
| (12,230 | ) |
|
| 82 |
|
|
| 471 |
|
Net of tax |
|
| 63 |
|
|
| 14,723 |
|
|
| 2,181 |
|
|
| 32,850 |
|
|
| (223 | ) |
|
| (1,291 | ) |
Total other comprehensive loss |
|
| (27,297 | ) |
|
| (33,636 | ) |
|
| (24,609 | ) |
|
| (116,596 | ) | ||||||||
Comprehensive income (loss) |
| $ | 925 |
|
| $ | (10,980 | ) |
| $ | 53,665 |
|
| $ | (51,346 | ) | ||||||||
Total other comprehensive income (loss) |
|
| (6,793 | ) |
|
| 9,408 |
| ||||||||||||||||
Comprehensive income |
| $ | 23,647 |
|
| $ | 33,353 |
| ||||||||||||||||
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 |
|
|
|
|
|
| Additional |
|
|
|
|
| Accumulated |
| Total |
| ||||||||||||||||||||||||||||
(dollars in thousands, | Preferred Stock |
|
| Common Stock |
|
| Paid-In |
|
| Retained |
|
| Treasury |
| Comprehensive |
|
| Stockholders’ |
|
| Common Stock |
|
| Paid-In |
|
| Retained |
| Treasury |
|
| Comprehensive |
|
| Stockholders’ |
| |||||||||||||||||||||||||
except share data) | Shares |
| Amount |
|
| Shares |
| Amount |
|
| Capital |
|
| Earnings |
|
| Stock |
|
| Income (Loss) |
|
| Equity |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Earnings |
|
| Stock |
|
| Income (Loss) |
|
| Equity |
| ||||||||||||||||
Balance, June 30, 2022 |
| — |
| $ | — |
|
|
| 37,669,102 |
| $ | 388 |
|
| $ | 595,938 |
|
| $ | 307,278 |
|
| $ | (47,181 | ) |
| $ | (91,262 | ) |
| $ | 765,161 |
| ||||||||||||||||||||||||||||
Balance, January 1, 2023 |
|
| 37,492,775 |
|
| $ | 389 |
|
| $ | 598,297 |
|
| $ | 335,794 |
|
| $ | (51,114 | ) |
| $ | (117,550 | ) |
| $ | 765,816 |
| |||||||||||||||||||||||||||||||||
Net income |
| — |
| — |
|
|
| — |
| — |
|
|
| — |
|
|
| 22,656 |
|
|
| — |
|
|
| — |
|
|
| 22,656 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 23,945 |
|
|
| — |
|
|
| — |
|
|
| 23,945 |
| ||
Other comprehensive loss, |
| — |
| — |
|
|
| — |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (33,636 | ) |
|
| (33,636 | ) | ||||||||||||||||||||||||||||||
Other comprehensive income, |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 9,408 |
|
|
| 9,408 |
| |||||||||||||||||||||||||||||||||
Restricted stock activity, net |
| — |
| — |
|
|
| (28,951 | ) |
| 1 |
|
|
| (88 | ) |
|
| — |
|
|
| (199 | ) |
|
| — |
|
|
| (286 | ) |
|
| 220,652 |
|
|
| 1 |
|
|
| (1,704 | ) |
|
| — |
|
|
| 48 |
|
|
| — |
|
|
| (1,655 | ) | |
Cash dividends declared on |
| — |
| — |
|
|
| — |
| — |
|
|
| — |
|
|
| (3,374 | ) |
|
| — |
|
|
| — |
|
|
| (3,374 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (3,374 | ) |
|
| — |
|
|
| — |
|
|
| (3,374 | ) | ||
Repurchases of common stock |
| — |
| — |
|
|
| (174,249 | ) |
| — |
|
|
| — |
|
|
| — |
|
|
| (4,155 | ) |
|
| — |
|
|
| (4,155 | ) | |||||||||||||||||||||||||||||
Share-based compensation |
| — |
|
| — |
|
|
| — |
|
| — |
|
|
| 1,199 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,199 |
|
|
| — |
|
|
| — |
|
|
| 1,510 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,510 |
|
Balance, September 30, 2022 |
| — |
| $ | — |
|
|
| 37,465,902 |
| $ | 389 |
|
| $ | 597,049 |
|
| $ | 326,560 |
|
| $ | (51,535 | ) |
| $ | (124,898 | ) |
| $ | 747,565 |
| ||||||||||||||||||||||||||||
Balance, March 31, 2023 |
|
| 37,713,427 |
|
| $ | 390 |
|
| $ | 598,103 |
|
| $ | 356,365 |
|
| $ | (51,066 | ) |
| $ | (108,142 | ) |
| $ | 795,650 |
| |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| Additional |
|
|
|
|
| Accumulated |
| Total |
|
|
|
|
| Additional |
|
|
|
|
| Accumulated |
| Total |
| |||||||||||||||||||||||||||
(dollars in thousands, | Preferred Stock |
|
| Common Stock |
|
| Paid-In |
|
| Retained |
|
| Treasury |
| Comprehensive |
|
| Stockholders’ |
| Common Stock |
|
| Paid-In |
|
| Retained |
|
| Treasury |
| Comprehensive |
|
| Stockholders’ |
| ||||||||||||||||||||||||
except share data) | Shares |
| Amount |
|
| Shares |
| Amount |
|
| Capital |
|
| Earnings |
|
| Stock |
|
| Income (Loss) |
|
| Equity |
| Shares |
| Amount |
|
| Capital |
|
| Earnings |
|
| Stock |
|
| Income (Loss) |
|
| Equity |
| ||||||||||||||||
Balance, January 1, 2022 |
| 10,438 |
| $ | 10,438 |
|
|
| 37,713,903 |
| $ | 387 |
|
| $ | 593,753 |
|
| $ | 271,676 |
|
| $ | (31,570 | ) |
| $ | (8,302 | ) |
| $ | 836,382 |
| ||||||||||||||||||||||||||
Balance, January 1, 2024 |
| 43,764,056 |
| $ | 451 |
|
| $ | 710,488 |
|
| $ | 429,036 |
|
| $ | (49,707 | ) |
| $ | (100,117 | ) |
| $ | 990,151 |
| |||||||||||||||||||||||||||||||||
Net income |
| — |
| — |
|
|
| — |
| — |
|
|
| — |
|
|
| 65,250 |
|
|
| — |
|
|
| — |
|
|
| 65,250 |
|
| — |
| — |
|
|
| — |
|
|
| 30,440 |
|
|
| — |
|
|
| — |
|
|
| 30,440 |
| |||
Other comprehensive loss, |
| — |
| — |
|
|
| — |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (116,596 | ) |
|
| (116,596 | ) |
| — |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (6,793 | ) |
|
| (6,793 | ) | |||
Issuance of common stock upon |
| — |
| — |
|
|
| 203,255 |
| — |
|
|
| (599 | ) |
|
| — |
|
|
| (1,811 | ) |
|
| — |
|
|
| (2,410 | ) |
| 68,186 |
| — |
|
|
| (331 | ) |
|
| — |
|
|
| (671 | ) |
|
| — |
|
|
| (1,002 | ) | |||
Restricted stock activity, net |
| — |
| — |
|
|
| 215,286 |
| 2 |
|
|
| (120 | ) |
|
| — |
|
|
| (1,417 | ) |
|
| — |
|
|
| (1,535 | ) |
| 276,145 |
| 1 |
|
|
| (3,159 | ) |
|
| — |
|
|
| 1,509 |
|
|
| — |
|
|
| (1,649 | ) | |||
Redemption of Series B |
| (10,438 | ) |
| (10,438 | ) |
|
| — |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (10,438 | ) | |||||||||||||||||||||||||||
Issuance of common stock in |
| — |
| — |
|
|
| 22,526 |
| — |
|
|
| (1 | ) |
|
| — |
|
|
| 537 |
|
|
| — |
|
|
| 536 |
| ||||||||||||||||||||||||||||
Cash dividends declared on |
| — |
| — |
|
|
| — |
| — |
|
|
| — |
|
|
| (196 | ) |
|
| — |
|
|
| — |
|
|
| (196 | ) | ||||||||||||||||||||||||||||
Cash dividends declared on |
| — |
| — |
|
|
| — |
| — |
|
|
| — |
|
|
| (10,170 | ) |
|
| — |
|
|
| — |
|
|
| (10,170 | ) | ||||||||||||||||||||||||||||
Repurchases of common stock |
| — |
| — |
|
|
| (689,068 | ) |
| — |
|
|
| — |
|
|
| — |
|
|
| (17,274 | ) |
|
| — |
|
|
| (17,274 | ) | |||||||||||||||||||||||||||
Cash dividends declared on |
| — |
| — |
|
|
| — |
|
|
| (3,944 | ) |
|
| — |
|
|
| — |
|
|
| (3,944 | ) | ||||||||||||||||||||||||||||||||||
Share-based compensation |
| — |
|
| — |
|
|
| — |
|
| — |
|
|
| 4,016 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,016 |
|
| — |
|
| — |
|
|
| 1,846 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,846 |
|
Balance, September 30, 2022 |
| — |
| $ | — |
|
|
| 37,465,902 |
| $ | 389 |
|
| $ | 597,049 |
|
| $ | 326,560 |
|
| $ | (51,535 | ) |
| $ | (124,898 | ) |
| $ | 747,565 |
| ||||||||||||||||||||||||||
Balance, March 31, 2024 |
| 44,108,387 |
| $ | 452 |
|
| $ | 708,844 |
|
| $ | 455,532 |
|
| $ | (48,869 | ) |
| $ | (106,910 | ) |
| $ | 1,009,049 |
| |||||||||||||||||||||||||||||||||
See accompanying Notes to Unaudited Interim Condensed Consolidated Financial Statements.
6
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, June 30, 2023 |
|
| 37,752,002 |
|
| $ | 391 |
|
| $ | 599,718 |
|
| $ | 379,078 |
|
| $ | (50,383 | ) |
| $ | (114,862 | ) |
| $ | 813,942 |
|
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 28,222 |
|
|
| — |
|
|
| — |
|
|
| 28,222 |
|
Other comprehensive loss, |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (27,297 | ) |
|
| (27,297 | ) |
Issuance of common stock upon |
|
| 29,766 |
|
|
| — |
|
|
| 347 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 347 |
|
Restricted stock activity, net |
|
| 5,112 |
|
|
| — |
|
|
| (113 | ) |
|
| — |
|
|
| 54 |
|
|
| — |
|
|
| (59 | ) |
Issuance of common stock due to |
|
| 5,932,323 |
|
|
| 59 |
|
|
| 106,958 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 107,017 |
|
Cash dividends declared on |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (3,932 | ) |
|
| — |
|
|
| — |
|
|
| (3,932 | ) |
Share-based compensation |
|
| — |
|
|
| — |
|
|
| 1,705 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,705 |
|
Balance, September 30, 2023 |
|
| 43,719,203 |
|
| $ | 450 |
|
| $ | 708,615 |
|
| $ | 403,368 |
|
| $ | (50,329 | ) |
| $ | (142,159 | ) |
| $ | 919,945 |
|
|
|
|
|
|
|
|
| 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, 2023 |
|
| 37,492,775 |
|
| $ | 389 |
|
| $ | 598,297 |
|
| $ | 335,794 |
|
| $ | (51,114 | ) |
| $ | (117,550 | ) |
| $ | 765,816 |
|
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 78,274 |
|
|
| — |
|
|
| — |
|
|
| 78,274 |
|
Other comprehensive loss, |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (24,609 | ) |
|
| (24,609 | ) |
Issuance of common stock upon |
|
| 29,766 |
|
|
| — |
|
|
| 347 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 347 |
|
Restricted stock activity, net |
|
| 225,217 |
|
|
| 2 |
|
|
| (1,909 | ) |
|
| — |
|
|
| 77 |
|
|
| — |
|
|
| (1,830 | ) |
Issuance of common stock in |
|
| 39,122 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 708 |
|
|
| — |
|
|
| 708 |
|
Issuance of common stock due to |
|
| 5,932,323 |
|
|
| 59 |
|
|
| 106,958 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 107,017 |
|
Cash dividends declared on |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (10,700 | ) |
|
| — |
|
|
| — |
|
|
| (10,700 | ) |
Share-based compensation |
|
| — |
|
|
| — |
|
|
| 4,922 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,922 |
|
Balance, September 30, 2023 |
|
| 43,719,203 |
|
| $ | 450 |
|
| $ | 708,615 |
|
| $ | 403,368 |
|
| $ | (50,329 | ) |
| $ | (142,159 | ) |
| $ | 919,945 |
|
See accompanying Notes to Unaudited Interim Condensed Consolidated Financial Statements.
7
BYLINE BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Nine Months Ended |
| Three Months Ended |
| ||||||||||
| September 30, |
| March 31, |
| ||||||||||
(dollars in thousands) | 2023 |
|
| 2022 |
| 2024 |
|
| 2023 |
| ||||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
| ||||
Net income | $ | 78,274 |
|
| $ | 65,250 |
| $ | 30,440 |
|
| $ | 23,945 |
|
Adjustments to reconcile net income to net cash from operating activities: |
|
|
|
|
|
|
|
|
|
| ||||
Provision for credit losses |
| 24,418 |
|
|
| 15,079 |
|
| 6,643 |
|
|
| 9,825 |
|
Impairment loss on premises and equipment |
| 1,069 |
|
|
| — |
| |||||||
Impairment loss on operating lease right-of-use asset |
| 395 |
|
|
| — |
|
| 194 |
|
|
| — |
|
Impairment loss on assets held for sale |
| 20 |
|
|
| — |
|
| — |
|
|
| 20 |
|
Depreciation and amortization of premises and equipment |
| 3,188 |
|
|
| 3,276 |
|
| 1,307 |
|
|
| 981 |
|
Net amortization of securities |
| 1,497 |
|
|
| 3,360 |
| |||||||
Net change in fair value of equity securities, net |
| (230 | ) |
|
| 1,313 |
| |||||||
Net realized gains on securities available-for-sale |
| — |
|
|
| (50 | ) | |||||||
Net losses (gains) on sales and valuation adjustments of premises and equipment |
| 142 |
|
|
| (93 | ) | |||||||
Net amortization (accretion) of securities |
| (481 | ) |
|
| 856 |
| |||||||
Net change in fair value of equity securities |
| (392 | ) |
|
| (350 | ) | |||||||
Net gains on sales and disposal of premises and equipment |
| (482 | ) |
|
| — |
| |||||||
Net gains on sales of loans |
| (17,325 | ) |
|
| (26,390 | ) |
| (5,533 | ) |
|
| (5,148 | ) |
Originations of U.S. government guaranteed loans |
| (231,091 | ) |
|
| (269,505 | ) |
| (79,089 | ) |
|
| (53,602 | ) |
Proceeds from U.S. government guaranteed loans sold |
| 256,601 |
|
|
| 320,601 |
|
| 35,005 |
|
|
| 46,824 |
|
Accretion of premiums and discounts on acquired loans, net |
| (11,616 | ) |
|
| (4,418 | ) |
| (4,284 | ) |
|
| (729 | ) |
Net change in servicing assets |
| (571 | ) |
|
| 2,617 |
|
| (1,148 | ) |
|
| (1,772 | ) |
Net losses on sales and valuation adjustments of other real estate owned |
| 444 |
|
|
| 191 |
|
| 18 |
|
|
| 296 |
|
Net amortization of other acquisition accounting adjustments |
| 5,447 |
|
|
| 5,075 |
|
| 1,626 |
|
|
| 1,455 |
|
Amortization of subordinated debt issuance cost |
| 131 |
|
|
| 131 |
|
| 43 |
|
|
| 44 |
|
Accretion of junior subordinated debentures discount |
| 337 |
|
|
| 326 |
|
| 115 |
|
|
| 104 |
|
Share-based compensation expense |
| 4,922 |
|
|
| 4,016 |
|
| 1,846 |
|
|
| 1,510 |
|
Deferred tax provision (benefit), net of valuation |
| (196 | ) |
|
| 2,207 |
| |||||||
Deferred tax benefit |
| (501 | ) |
|
| (134 | ) | |||||||
Increase in cash surrender value of bank owned life insurance |
| (1,712 | ) |
|
| (1,550 | ) |
| (848 | ) |
|
| (588 | ) |
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
| ||||
Accrued interest receivable and other assets |
| 8,452 |
|
|
| (54,598 | ) |
| (374 | ) |
|
| 10,214 |
|
Accrued interest payable and other liabilities |
| 49,506 |
|
|
| 118,791 |
|
| 77,162 |
|
|
| 15,384 |
|
Net cash provided by operating activities |
| 171,033 |
|
|
| 185,629 |
|
| 62,336 |
|
|
| 49,135 |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
| ||||
Purchases of securities available-for-sale |
| (121,166 | ) |
|
| (94,430 | ) |
| (106,623 | ) |
|
| (1,280 | ) |
Proceeds from maturities and calls of securities available-for-sale |
| 7,480 |
|
|
| 22,832 |
|
| 31,953 |
|
|
| 3,784 |
|
Proceeds from paydowns of securities available-for-sale |
| 76,451 |
|
|
| 114,026 |
|
| 28,916 |
|
|
| 21,262 |
|
Proceeds from sales of securities available-for-sale |
| 163,649 |
|
|
| 23,293 |
| |||||||
Proceeds from maturities and calls of securities held-to-maturity |
| 1,545 |
|
|
| — |
| |||||||
Redemption (purchases) of Federal Home Loan Bank stock, net |
| 755 |
|
|
| (5,075 | ) | |||||||
Proceeds from other loans sold |
| 6,750 |
|
|
| — |
| |||||||
Purchases of Federal Home Loan Bank stock, net |
| (6,489 | ) |
|
| (10,575 | ) | |||||||
Net change in loans and leases |
| (382,183 | ) |
|
| (742,449 | ) |
| (95,840 | ) |
|
| (94,571 | ) |
Purchases of premises and equipment |
| (2,856 | ) |
|
| (3,329 | ) |
| (512 | ) |
|
| (281 | ) |
Proceeds from sales of premises and equipment |
| — |
|
|
| 28 |
|
| 363 |
|
|
| — |
|
Proceeds from sales of assets held for sale |
| 1,359 |
|
|
| 2,903 |
|
| 1,178 |
|
|
| — |
|
Proceeds from sales of other real estate owned |
| 3,173 |
|
|
| 356 |
|
| 402 |
|
|
| 764 |
|
Net cash received in acquisition of business |
| 7,834 |
|
|
| — |
| |||||||
Net cash used in investing activities |
| (237,209 | ) |
|
| (681,845 | ) |
| (146,652 | ) |
|
| (80,897 | ) |
See accompanying Notes to Unaudited Interim Condensed Consolidated Financial Statements.
87
BYLINE BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(UNAUDITED)
| Nine Months Ended |
| Three Months Ended |
| ||||||||||
| September 30, |
| March 31, |
| ||||||||||
(dollars in thousands) | 2023 |
|
| 2022 |
| 2024 |
|
| 2023 |
| ||||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
| ||||
Net increase in deposits | $ | 293,092 |
|
| $ | 457,409 |
| $ | 172,922 |
|
| $ | 117,531 |
|
Proceeds from line of credit |
| 15,000 |
|
|
| — |
| |||||||
Proceeds from term loan |
| 20,000 |
|
|
| — |
| |||||||
Repayments of line of credit |
| (11,250 | ) |
|
| — |
| |||||||
Repayments of term loan |
| (1,666 | ) |
|
| — |
| |||||||
Proceeds from short-term borrowings |
| 15,643,200 |
|
|
| 16,555,400 |
|
| 570,000 |
|
|
| 6,100,100 |
|
Repayments of short-term borrowings |
| (15,668,200 | ) |
|
| (16,445,400 | ) |
| (425,000 | ) |
|
| (6,100,100 | ) |
Net increase in securities sold under agreements to repurchase |
| 22,379 |
|
|
| 24,231 |
| |||||||
Dividends paid on preferred stock |
| — |
|
|
| (196 | ) | |||||||
Proceeds from BTFP advances |
| 200,000 |
|
|
| — |
| |||||||
Net increase (decrease) in securities sold under agreements to repurchase |
| (6,101 | ) |
|
| 22,411 |
| |||||||
Dividends paid on common stock |
| (10,709 | ) |
|
| (10,084 | ) |
| (3,888 | ) |
|
| (3,322 | ) |
Proceeds from issuance of common stock |
| 949 |
|
|
| 927 |
| |||||||
Redemption of preferred stock |
| — |
|
|
| (10,438 | ) | |||||||
Repurchases of common stock |
| — |
|
|
| (17,274 | ) | |||||||
Net cash provided by financing activities |
| 315,711 |
|
|
| 554,575 |
|
| 495,017 |
|
|
| 136,620 |
|
NET CHANGE IN CASH AND CASH EQUIVALENTS |
| 249,535 |
|
|
| 58,359 |
|
| 410,701 |
|
|
| 104,858 |
|
CASH AND CASH EQUIVALENTS, beginning of period |
| 179,353 |
|
|
| 157,931 |
|
| 226,136 |
|
|
| 179,353 |
|
CASH AND CASH EQUIVALENTS, end of period | $ | 428,888 |
|
| $ | 216,290 |
| $ | 636,837 |
|
| $ | 284,211 |
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
|
| ||||
Cash paid during the period for interest | $ | 82,310 |
|
| $ | 15,780 |
| $ | 52,724 |
|
| $ | 19,483 |
|
Cash paid during the period for taxes | $ | 6,352 |
|
| $ | 28,048 |
| $ | 406 |
|
| $ | 309 |
|
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND |
|
|
|
|
|
|
|
|
|
| ||||
Transfer of loans to other real estate owned | $ | 571 |
|
| $ | 2,837 |
| $ | 5 |
|
| $ | 55 |
|
Total assets acquired from acquisition | $ | 1,160,491 |
|
| $ | — |
| |||||||
Value ascribed to goodwill | $ | 33,352 |
|
| $ | — |
| |||||||
Total liabilities assumed from acquisition | $ | 1,054,929 |
|
| $ | — |
| |||||||
Common stock issued due to acquisition of business | $ | 107,017 |
|
| $ | — |
| |||||||
Right-of-use assets exchanged for operating lease liabilities | $ | 422 |
|
| $ | 313 |
| |||||||
Common share withholding | $ | 2,651 |
|
| $ | 1,655 |
| |||||||
Common dividend declared, not paid | $ | (9 | ) |
| $ | 86 |
| $ | 56 |
|
| $ | 52 |
|
See accompanying Notes to Unaudited Interim Condensed Consolidated Financial Statements.
98
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 September 30, 2023March 31, 2024 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 for the years ended December 31, 2022, 2021,2023 and 2020.2022.
The Company has one reportable segment. The Company’s chief operating decision maker evaluatesmakers evaluate the operations of the Company using consolidated information for purposes of allocating resources and assessing performance. Therefore, segments disclosures are currently not required.
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. No subsequent events were identified that would have required a change to the condensed consolidated financial statements or disclosure in the notes to the condensed consolidated financial statements.
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
Financial Instruments—Credit Losses (Topic 326)—In June 2016, FASB issued Accounting Standards Update ("ASU") No. 2016‑13, Financial Instruments - Credit Losses (Topic 326) on the recognition of credit losses, otherwise known as the current expected credit loss model or "CECL", which replaces the incurred loss impairment methodology with a methodology that reflects current expected credit losses. We elected to delay the adoption of the standard in accordance with ASU No. 2019-10, Effective Dates, which delayed the effective date of the ASU for entities not classified as Public Business Entities. The Company’s EGC status expired December 31, 2022, requiring CECL adoption be reflected in our December 31, 2022 financial statements and Form 10-K. Results for reporting periods beginning after September 30, 2022 were presented under the new standard, while prior quarters were reported under, and continue to be reported under, the incurred loss method. For additional information on the new standard, see Note 1—Business and Summary of Significant Accounting Policies in our Annual Report on Form 10-K for the year ended December 31, 2022.
10
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 select financial data for the first three quarters of 2022 as reported under the incurred loss method and as recast under CECL:
|
| For the three month period ended |
| |||||||||||||||||||||||||||||||||
|
| March 31, 2022 |
|
| June 30, 2022 |
|
| September 30, 2022 |
| |||||||||||||||||||||||||||
|
| As Reported |
|
| Adjustment |
|
| Recast |
|
| As Reported |
|
| Adjustment |
|
| Recast |
|
| As Reported |
|
| Adjustment |
|
| Recast |
| |||||||||
Interest and dividend |
| $ | 61,818 |
|
| $ | (405 | ) |
| $ | 61,413 |
|
| $ | 66,546 |
|
| $ | 133 |
|
| $ | 66,679 |
|
| $ | 79,903 |
|
| $ | (240 | ) |
| $ | 79,663 |
|
Interest expense |
|
| 3,082 |
|
|
| — |
|
|
| 3,082 |
|
|
| 4,919 |
|
|
| — |
|
|
| 4,919 |
|
|
| 11,028 |
|
|
| — |
|
|
| 11,028 |
|
Net interest income |
|
| 58,736 |
|
|
| (405 | ) |
|
| 58,331 |
|
|
| 61,627 |
|
|
| 133 |
|
|
| 61,760 |
|
|
| 68,875 |
|
|
| (240 | ) |
|
| 68,635 |
|
Provision/(recapture) for |
|
| 4,995 |
|
|
| 1,564 |
|
|
| 6,559 |
|
|
| 5,908 |
|
|
| (1,622 | ) |
|
| 4,286 |
|
|
| 4,176 |
|
|
| 3,032 |
|
|
| 7,208 |
|
Net interest income after |
|
| 53,741 |
|
|
| (1,969 | ) |
|
| 51,772 |
|
|
| 55,719 |
|
|
| 1,755 |
|
|
| 57,474 |
|
|
| 64,699 |
|
|
| (3,272 | ) |
|
| 61,427 |
|
Non-interest income |
|
| 19,426 |
|
|
| 117 |
|
|
| 19,543 |
|
|
| 14,161 |
|
|
| 112 |
|
|
| 14,273 |
|
|
| 11,992 |
|
|
| 51 |
|
|
| 12,043 |
|
Non-interest expense |
|
| 44,555 |
|
|
| (599 | ) |
|
| 43,956 |
|
|
| 43,773 |
|
|
| (188 | ) |
|
| 43,585 |
|
|
| 46,178 |
|
|
| (137 | ) |
|
| 46,041 |
|
Income before provision |
|
| 28,612 |
|
|
| (1,253 | ) |
|
| 27,359 |
|
|
| 26,107 |
|
|
| 2,055 |
|
|
| 28,162 |
|
|
| 30,513 |
|
|
| (3,084 | ) |
|
| 27,429 |
|
Provision for income taxes |
|
| 6,301 |
|
|
| (340 | ) |
|
| 5,961 |
|
|
| 5,824 |
|
|
| 558 |
|
|
| 6,382 |
|
|
| 7,857 |
|
|
| (837 | ) |
|
| 7,020 |
|
Net income |
|
| 22,311 |
|
|
| (913 | ) |
|
| 21,398 |
|
|
| 20,283 |
|
|
| 1,497 |
|
|
| 21,780 |
|
|
| 22,656 |
|
|
| (2,247 | ) |
|
| 20,409 |
|
Dividends on preferred |
|
| 196 |
|
|
| — |
|
|
| 196 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Income available to common |
| $ | 22,115 |
|
| $ | (913 | ) |
| $ | 21,202 |
|
| $ | 20,283 |
|
| $ | 1,497 |
|
| $ | 21,780 |
|
| $ | 22,656 |
|
| $ | (2,247 | ) |
| $ | 20,409 |
|
Basic earnings per |
| $ | 0.60 |
|
| $ | (0.03 | ) |
| $ | 0.57 |
|
| $ | 0.55 |
|
| $ | 0.04 |
|
| $ | 0.59 |
|
| $ | 0.61 |
|
| $ | (0.06 | ) |
| $ | 0.55 |
|
Diluted earnings per |
| $ | 0.58 |
|
| $ | (0.02 | ) |
| $ | 0.56 |
|
| $ | 0.54 |
|
| $ | 0.04 |
|
| $ | 0.58 |
|
| $ | 0.61 |
|
| $ | (0.06 | ) |
| $ | 0.55 |
|
ASU 2022-02 - Financial Instruments – Credit Losses – Troubled Debt Restructurings and Vintage Disclosures (Topic 326) – The Company adopted this update effective March 31, 2023. This update eliminates the recognition and measurement guidance for troubled debt restructurings (“TDRs”) by creditors in ASC 310-40. The update also enhances disclosure requirements for certain loan restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity will apply the loan refinancing and restructuring guidance to determine whether a modification or other form of restructuring results in a new loan or a continuation of an existing loan. Additionally, the amendments in this ASU require a public business entity to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases in the existing vintage disclosures. Refer to Note 5—Loan and Lease Receivables and Allowance for Credit Losses for additional details regarding these disclosures.
Reference Rate Reform (Topic 848)—In March 2020, FASB issued ASU No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting and in December 2022, FASB issued ASU 2022-06, Reference Rate Reform: Deferral of the Sunset Date of Topic 848. The amendments in these ASUs provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in these ASUs provide optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued. These ASUs are intended to help stakeholders during the global market-wide reference rate transition period. The amendments in these ASUs will be in effect for all entities as of March 12, 2020 and sunset on December 31, 2024. The Company believes the adoption of this guidance on activities subsequent to September 30, 2023 will not have a material impact on the consolidated financial statements.
Issued Accounting Pronouncements Pending Adoption
Fair Value Measurement (Topic 820) - In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The guidance in the ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account on the equity security and, therefore, is not considered in measuring fair value. The ASU also requires additional disclosures about the restriction. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is evaluatingevaluated the accounting and disclosure requirements of this update and doesthey did not expect them to have a material effect on the consolidated financial statements.
Issued Accounting Pronouncements Pending Adoption
Business Combinations (Topic 805) - In August 2023, the FASB issued ASU 2023-05, Business Combinations—Joint Venture (JV) Formations: Recognition and Initial Measurement. The guidance requires newly-formed JVs to apply a new basis of accounting to all of its contributed net assets, which results in the JV initially measuring its contributed net assets under ASC 805-20, Business Combinations. The new guidance would be applied prospectively and is effective for all newly-formed joint venture entities with a formation date on or after January 1, 2025, with early adoption permitted. The Company is evaluating the accounting and disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements.
Segment Reporting – Improvements to Reportable Segment Disclosures (Topic 280) – In November 2023, the FASB issued ASU 2023-07 to enhance disclosures about significant segment expenses for public entities reporting segment information under Topic 280. It requires that a public entity disclose, on an annual and interim basis, significant expense categories for each reportable segment. Significant expense categories are derived from expenses that are 1) regularly reported to an entity’s chief operating decision-maker ("CODM"), and 2) included in a segment’s reported measure of profit or loss. The disclosures should include an amount for "other segment items," reflecting the difference between 1) segment revenue less significant segment expenses, and 2) the reportable segment’s profit or loss measures. It requires that a public entity disclose the title and position of the CODM and how the CODM uses the reported measure of profit or loss to assess segment
119
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
performance and to allocate resources. Further it clarifies that entities with a single reportable segment must disclose both new and existing segment reporting requirements. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Entities must adopt the guidance on a retrospective basis. The Company is evaluating the internal control and disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements.
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 is evaluating the accounting and disclosure requirements of this update and does not expect them to have a material effectthe impact of adopting the new guidance on the consolidated financial statements.
Note 3—Acquisition of a Business
On July 1, 2023, the Company acquired all of the outstanding common stock of Inland Bancorp, Inc. (“Inland”("Inland") and its subsidiaries pursuant to an Agreement and Plan of Merger, dated as of November 30, 2022 (the “Merger Agreement”"Merger Agreement"). Inland was merged with and into Byline. As a result of the merger, Inland’s wholly owned subsidiary bank, Inland Bank and Trust, was merged with and into Byline Bank, with Byline Bank as the surviving bank. The acquisition improves the Company’s footprint in the Chicagoland market, diversifies its commercial banking business, and strengthens the core deposit base.
In a related but separate transaction, on March 31, 2023, Byline entered into a side letter agreement with the majority shareholder of Inland in which Byline agreed to purchase 2,408,992 shares of Inland common stock. The purchase price was calculated based on the terms of the Merger Agreement. The transaction was completed on June 30, 2023, which resulted in the payment of cash in the amount of $9.9$9.9 million.
At the effective time of the merger (the “Effective Time”"Effective Time"), each share of Inland’s common stock was converted into the right to receive: (1) 0.19 shares of Byline’s common stock, par value $0.01$0.01 per share, and (2) a cash payment in the amount of $0.68$0.68 per share, with cash paid in lieu of any fractional shares. The per share cash consideration was based on the total $21.2$21.2 million divided by the outstanding shares of Inland common stock. Based on the closing price of shares of the Company’s common stock of $18.09,$18.09, as reported by the New York Stock Exchange, and 5,932,323 shares of common stock issued with respect to the outstanding shares of Inland common stock, the stock consideration was valued at $107.3$107.3 million. Options to acquire 288,200 shares of Inland common stock that were outstanding at the Effective Time were canceled, at the option holders' election, in exchange for a cash payment in accordance with the Merger Agreement of $424,000,$424,000, to be paid after the closing date. In addition, the 2,408,992 shares of Inland common stock purchased on June 30, 2023 were canceled as of the effective time of the transaction. The value of the total merger consideration at closing was $138.9$138.9 million. Stock issuance costs were $299,000.$299,000.
The transaction resulted in goodwill of $33.4$33.4 million, which is nondeductible for tax purposes, as this acquisition was a nontaxable transaction. Goodwill represents the premium paid over the fair value of the net tangible and intangible assets acquired and reflects related synergies expected from the combined operations.
Merger-related expenses, including acquisition advisory expenses of $256,000, core system conversion expenses of $3.0 million, acquisition advisory expenses of $2.4 million,$199,000, salaries and employee benefits of $2.4 million,$18,000, and other non-interest expenses of $397,000$16,000 related to the Inland acquisition, are reflected in non-interest expense on the Consolidated Statements of Operations for the ninethree months ended September 30,March 31, 2023.
The acquisition of Inland 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. 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.
1210
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 fair values of assets acquired and liabilities assumed as of the acquisition date:
Assets |
|
|
| |
Cash and cash equivalents |
| $ | 39,731 |
|
Securities available-for-sale |
|
| 239,602 |
|
Restricted stock |
|
| 3,058 |
|
Loans |
|
| 808,000 |
|
Allowance for credit losses |
|
| (10,596 | ) |
Premises and equipment |
|
| 11,307 |
|
Operating lease right-of-use asset |
|
| 3,813 |
|
Other intangible assets |
|
| 17,250 |
|
Bank-owned life insurance |
|
| 12,455 |
|
Deferred tax assets, net |
|
| 14,848 |
|
Other assets |
|
| 21,023 |
|
Total assets acquired |
|
| 1,160,491 |
|
Liabilities |
|
|
| |
Deposits |
|
| 964,491 |
|
Federal Home Loan Bank advances |
|
| 40,000 |
|
Securities sold under agreements to repurchase |
|
| 455 |
|
Junior subordinated debentures |
|
| 32,661 |
|
Operating lease liability |
|
| 4,034 |
|
Accrued expenses and other liabilities |
|
| 13,288 |
|
Total liabilities assumed |
|
| 1,054,929 |
|
Net assets acquired |
| $ | 105,562 |
|
Consideration paid |
|
|
| |
Common stock (5,932,323 shares issued at $18.09 per share) |
|
| 107,017 |
|
Cash paid |
|
| 31,897 |
|
Total consideration paid |
|
| 138,914 |
|
Goodwill |
| $ | 33,352 |
|
The following table presents the fair value and gross contractual amounts receivable of acquired non-credit-deteriorated loans from the Inland acquisition, and their respective expected contractual cash flows as of the acquisition date:
Fair value |
| $ | 582,831 |
|
Gross contractual amounts receivable |
|
| 699,918 |
|
Estimate of contractual cash flows not expected to be collected(1) |
|
| 4,239 |
|
Estimate of contractual cash flows expected to be collected |
|
| 695,679 |
|
(1) Includes interest payments not expected to be collected due to loan prepayments as well as principal and interest payments not expected to be collected due to customer default.
The following table provides the unaudited pro forma information for the results of operations for the three and nine months ended September 30, 2022 and the nine months ended September 30,March 31, 2023, as if the acquisition had occurred on January 1, 2022.2023. The pro forma results combine the historical results of Inland into the Company’s Consolidated Statements of Operations, including the impact of certain acquisition accounting adjustments, which includes loan discount accretion, intangible assets amortization, deposit premium accretion, fixed assets amortization, and borrowing discount amortization. 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, 2022.2023. 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:
1311
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
|
| For the Three Months Ended |
|
| For the Nine Months Ended |
| ||||||
|
| September 30, |
|
| September 30, |
| ||||||
|
| 2022 |
|
| 2023 |
|
| 2022 |
| |||
Total revenues (net interest income and non-interest income) |
| $ | 97,383 |
|
| $ | 310,476 |
|
| $ | 287,663 |
|
Net income |
| $ | 28,502 |
|
| $ | 85,879 |
|
| $ | 76,724 |
|
Earnings per share—basic |
| $ | 0.67 |
|
| $ | 2.00 |
|
| $ | 1.79 |
|
Earnings per share—diluted |
| $ | 0.66 |
|
| $ | 1.98 |
|
| $ | 1.76 |
|
|
| For the Three Months Ended |
| |
|
| March 31, |
| |
|
| 2023 |
| |
Total revenues (net interest income and non-interest income) |
| $ | 107,807 |
|
Net income |
| $ | 22,153 |
|
Earnings per share—basic |
| $ | 0.52 |
|
Earnings per share—diluted |
| $ | 0.51 |
|
The operating results of the Company include the operating results generated by the acquired assets and assumed liabilities of Inland for the period from July 1, 2023 through September 30, 2023. Revenues and earnings of the acquired company since the acquisition date have not been disclosed as it is not practicable as Inland 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:
September 30, 2023 |
| Amortized |
|
| Gross |
|
| Gross |
|
| Fair |
| ||||||||||||||||||||
March 31, 2024 |
| Amortized |
|
| Gross |
|
| Gross |
|
| Fair |
| ||||||||||||||||||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
U.S. Treasury Notes |
| $ | 105,792 |
|
| $ | 8 |
|
| $ | (1,771 | ) |
| $ | 104,029 |
|
| $ | 87,147 |
|
| $ | 9 |
|
| $ | (1,044 | ) |
| $ | 86,112 |
|
U.S. Government agencies |
|
| 147,889 |
|
|
| 49 |
|
|
| (22,823 | ) |
|
| 125,115 |
|
|
| 155,659 |
|
|
| 22 |
|
|
| (17,627 | ) |
|
| 138,054 |
|
Obligations of states, municipalities, and |
|
| 89,370 |
|
|
| — |
|
|
| (8,850 | ) |
|
| 80,520 |
|
|
| 86,160 |
|
|
| 264 |
|
|
| (4,715 | ) |
|
| 81,709 |
|
Residential mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Agency |
|
| 750,675 |
|
|
| — |
|
|
| (128,699 | ) |
|
| 621,976 |
|
|
| 825,180 |
|
|
| 2,060 |
|
|
| (100,653 | ) |
|
| 726,587 |
|
Non-agency |
|
| 124,569 |
|
|
| — |
|
|
| (27,638 | ) |
|
| 96,931 |
|
|
| 136,561 |
|
|
| — |
|
|
| (22,852 | ) |
|
| 113,709 |
|
Commercial mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Agency |
|
| 183,183 |
|
|
| — |
|
|
| (43,318 | ) |
|
| 139,865 |
|
|
| 197,171 |
|
|
| — |
|
|
| (33,625 | ) |
|
| 163,546 |
|
Corporate securities |
|
| 40,696 |
|
|
| — |
|
|
| (5,724 | ) |
|
| 34,972 |
|
|
| 40,667 |
|
|
| 5 |
|
|
| (3,920 | ) |
|
| 36,752 |
|
Asset-backed securities |
|
| 38,220 |
|
|
| — |
|
|
| (1,699 | ) |
|
| 36,521 |
|
|
| 33,882 |
|
|
| 30 |
|
|
| (1,234 | ) |
|
| 32,678 |
|
Total |
| $ | 1,480,394 |
|
| $ | 57 |
|
| $ | (240,522 | ) |
| $ | 1,239,929 |
|
| $ | 1,562,427 |
|
| $ | 2,390 |
|
| $ | (185,670 | ) |
| $ | 1,379,147 |
|
September 30, 2023 |
| Amortized |
|
| Gross |
|
| Gross |
|
| Fair |
| ||||||||||||||||||||
March 31, 2024 |
| Amortized |
|
| Gross |
|
| Gross |
|
| Fair |
| ||||||||||||||||||||
Held-to-maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Obligations of states, municipalities, and |
| $ | 1,157 |
|
| $ | — |
|
| $ | (24 | ) |
| $ | 1,133 |
|
| $ | 1,156 |
|
| $ | — |
|
| $ | (7 | ) |
| $ | 1,149 |
|
Total |
| $ | 1,157 |
|
| $ | — |
|
| $ | (24 | ) |
| $ | 1,133 |
|
| $ | 1,156 |
|
| $ | — |
|
| $ | (7 | ) |
| $ | 1,149 |
|
December 31, 2022 |
| Amortized |
|
| Gross |
|
| Gross |
|
| Fair |
| ||||||||||||||||||||
December 31, 2023 |
| Amortized |
|
| Gross |
|
| Gross |
|
| Fair |
| ||||||||||||||||||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
U.S. Treasury Notes |
| $ | 42,430 |
|
| $ | 2 |
|
| $ | (1,709 | ) |
| $ | 40,723 |
|
| $ | 116,398 |
|
| $ | 61 |
|
| $ | (1,025 | ) |
| $ | 115,434 |
|
U.S. Government agencies |
|
| 150,524 |
|
|
| 116 |
|
|
| (20,276 | ) |
|
| 130,364 |
|
|
| 147,062 |
|
|
| 37 |
|
|
| (16,404 | ) |
|
| 130,695 |
|
Obligations of states, municipalities, and |
|
| 68,019 |
|
|
| 9 |
|
|
| (6,152 | ) |
|
| 61,876 |
|
|
| 86,022 |
|
|
| 396 |
|
|
| (4,143 | ) |
|
| 82,275 |
|
Residential mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Agency |
|
| 707,157 |
|
|
| — |
|
|
| (111,361 | ) |
|
| 595,796 |
|
|
| 786,970 |
|
|
| 4,247 |
|
|
| (95,414 | ) |
|
| 695,803 |
|
Non-agency |
|
| 130,654 |
|
|
| — |
|
|
| (24,405 | ) |
|
| 106,249 |
|
|
| 122,359 |
|
|
| — |
|
|
| (22,099 | ) |
|
| 100,260 |
|
Commercial mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Agency |
|
| 191,172 |
|
|
| — |
|
|
| (34,142 | ) |
|
| 157,030 |
|
|
| 181,452 |
|
|
| — |
|
|
| (34,248 | ) |
|
| 147,204 |
|
Corporate securities |
|
| 45,302 |
|
|
| — |
|
|
| (3,866 | ) |
|
| 41,436 |
|
|
| 40,681 |
|
|
| — |
|
|
| (4,510 | ) |
|
| 36,171 |
|
Asset-backed securities |
|
| 43,085 |
|
|
| — |
|
|
| (2,128 | ) |
|
| 40,957 |
|
|
| 35,857 |
|
|
| 2 |
|
|
| (1,221 | ) |
|
| 34,638 |
|
Total |
| $ | 1,378,343 |
|
| $ | 127 |
|
| $ | (204,039 | ) |
| $ | 1,174,431 |
|
| $ | 1,516,801 |
|
| $ | 4,743 |
|
| $ | (179,064 | ) |
| $ | 1,342,480 |
|
1412
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
December 31, 2022 |
| Amortized |
|
| Gross |
|
| Gross |
|
| Fair |
| ||||||||||||||||||||
December 31, 2023 |
| Amortized |
|
| Gross |
|
| Gross |
|
| Fair |
| ||||||||||||||||||||
Held-to-maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Obligations of states, municipalities, and political |
| $ | 2,705 |
|
| $ | — |
|
| $ | (33 | ) |
| $ | 2,672 |
|
| $ | 1,157 |
|
| $ | — |
|
| $ | (8 | ) |
| $ | 1,149 |
|
Total |
| $ | 2,705 |
|
| $ | — |
|
| $ | (33 | ) |
| $ | 2,672 |
|
| $ | 1,157 |
|
| $ | — |
|
| $ | (8 | ) |
| $ | 1,149 |
|
The Company did notnot classify securities as trading during the ninethree months ended September 30, 2023March 31, 2024 or during 2022.2023.
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 September 30, 2023March 31, 2024 and December 31, 2022,2023, are summarized as follows:
|
|
|
| Less than 12 Months |
|
| 12 Months or Longer |
|
| Total |
|
|
|
| Less than 12 Months |
|
| 12 Months or Longer |
|
| Total |
| ||||||||||||||||||||||||||||||||
September 30, 2023 |
| Number of |
| Fair |
|
| Unrealized |
|
| Fair |
|
| Unrealized |
|
| Fair |
|
| Unrealized |
| ||||||||||||||||||||||||||||||||||
March 31, 2024 |
| Number of |
| Fair |
|
| Unrealized |
|
| Fair |
|
| Unrealized |
|
| Fair |
|
| Unrealized |
| ||||||||||||||||||||||||||||||||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
U.S. Treasury Notes |
|
| 10 |
| $ | 28,974 |
|
| $ | (210 | ) |
| $ | 31,278 |
|
| $ | (1,561 | ) |
| $ | 60,252 |
|
| $ | (1,771 | ) |
|
| 9 |
| $ | 19,532 |
|
| $ | (95 | ) |
| $ | 31,939 |
|
| $ | (949 | ) |
| $ | 51,471 |
|
| $ | (1,044 | ) |
U.S. Government agencies |
|
| 18 |
| 564 |
|
|
| (13 | ) |
|
| 112,665 |
|
|
| (22,810 | ) |
|
| 113,229 |
|
|
| (22,823 | ) |
|
| 19 |
| 10,517 |
|
|
| (30 | ) |
|
| 117,934 |
|
|
| (17,597 | ) |
|
| 128,451 |
|
|
| (17,627 | ) | ||
Obligations of states, |
|
| 104 |
| 31,806 |
|
|
| (1,400 | ) |
|
| 48,214 |
|
|
| (7,450 | ) |
|
| 80,020 |
|
|
| (8,850 | ) |
|
| 76 |
| 19,232 |
|
|
| (295 | ) |
|
| 49,261 |
|
|
| (4,420 | ) |
|
| 68,493 |
|
|
| (4,715 | ) | ||
Residential mortgage-backed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Agency |
|
| 130 |
| 93,545 |
|
|
| (2,438 | ) |
|
| 528,431 |
|
|
| (126,261 | ) |
|
| 621,976 |
|
|
| (128,699 | ) |
|
| 122 |
| 88,634 |
|
|
| (808 | ) |
|
| 526,201 |
|
|
| (99,845 | ) |
|
| 614,835 |
|
|
| (100,653 | ) | ||
Non-agency |
|
| 20 |
| 629 |
|
|
| (14 | ) |
|
| 96,302 |
|
|
| (27,624 | ) |
|
| 96,931 |
|
|
| (27,638 | ) |
|
| 21 |
| 16,710 |
|
|
| (62 | ) |
|
| 96,999 |
|
|
| (22,790 | ) |
|
| 113,709 |
|
|
| (22,852 | ) | ||
Commercial mortgage-backed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Agency |
|
| 48 |
| 6,671 |
|
|
| (1,643 | ) |
|
| 133,194 |
|
|
| (41,675 | ) |
|
| 139,865 |
|
|
| (43,318 | ) |
|
| 49 |
| 19,677 |
|
|
| (114 | ) |
|
| 143,869 |
|
|
| (33,511 | ) |
|
| 163,546 |
|
|
| (33,625 | ) | ||
Corporate securities |
|
| 21 |
|
| — |
|
|
| — |
|
|
| 34,972 |
|
|
| (5,724 | ) |
|
| 34,972 |
|
|
| (5,724 | ) |
|
| 20 |
| — |
|
|
| — |
|
|
| 35,256 |
|
|
| (3,920 | ) |
|
| 35,256 |
|
|
| (3,920 | ) | |
Asset-backed securities |
|
| 8 |
|
| — |
|
|
| — |
|
|
| 36,521 |
|
|
| (1,699 | ) |
|
| 36,521 |
|
|
| (1,699 | ) |
|
| 3 |
|
| 6,586 |
|
|
| — |
|
|
| 6,608 |
|
|
| (1,234 | ) |
|
| 13,194 |
|
|
| (1,234 | ) |
Total |
|
| 359 |
| $ | 162,189 |
|
| $ | (5,718 | ) |
| $ | 1,021,577 |
|
| $ | (234,804 | ) |
| $ | 1,183,766 |
|
| $ | (240,522 | ) |
|
| 319 |
| $ | 180,888 |
|
| $ | (1,404 | ) |
| $ | 1,008,067 |
|
| $ | (184,266 | ) |
| $ | 1,188,955 |
|
| $ | (185,670 | ) |
Held-to-maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Obligations of states, |
|
| 2 |
| $ | — |
|
| $ | — |
|
| $ | 1,133 |
|
| $ | (24 | ) |
| $ | 1,133 |
|
| $ | (24 | ) |
|
| 1 |
| $ | — |
|
| $ | — |
|
| $ | 599 |
|
| $ | (7 | ) |
| $ | 599 |
|
| $ | (7 | ) |
Total |
|
| 2 |
| $ | — |
|
| $ | — |
|
| $ | 1,133 |
|
| $ | (24 | ) |
| $ | 1,133 |
|
| $ | (24 | ) |
|
| 1 |
| $ | — |
|
| $ | — |
|
| $ | 599 |
|
| $ | (7 | ) |
| $ | 599 |
|
| $ | (7 | ) |
1513
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
|
|
|
| Less than 12 Months |
|
| 12 Months or Longer |
|
| Total |
|
|
|
| Less than 12 Months |
|
| 12 Months or Longer |
|
| Total |
| ||||||||||||||||||||||||||||||||
December 31, 2022 |
| Number of |
| Fair |
|
| Unrealized |
|
| Fair |
|
| Unrealized |
|
| Fair |
|
| Unrealized |
| ||||||||||||||||||||||||||||||||||
December 31, 2023 |
| Number of |
| Fair |
|
| Unrealized |
|
| Fair |
|
| Unrealized |
|
| Fair |
|
| Unrealized |
| ||||||||||||||||||||||||||||||||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
U.S. Treasury Notes |
|
| 6 |
| $ | 21,720 |
|
| $ | (1,078 | ) |
| $ | 9,339 |
|
| $ | (631 | ) |
| $ | 31,059 |
|
| $ | (1,709 | ) |
|
| 7 |
| $ | 5,018 |
|
| $ | (4 | ) |
| $ | 31,843 |
|
| $ | (1,021 | ) |
| $ | 36,861 |
|
| $ | (1,025 | ) |
U.S. Government agencies |
|
| 17 |
| 44,508 |
|
|
| (4,782 | ) |
|
| 70,609 |
|
|
| (15,494 | ) |
|
| 115,117 |
|
|
| (20,276 | ) |
|
| 18 |
| 535 |
|
|
| (9 | ) |
|
| 119,109 |
|
|
| (16,395 | ) |
|
| 119,644 |
|
|
| (16,404 | ) | ||
Obligations of states, |
|
| 58 |
| 50,216 |
|
|
| (3,858 | ) |
|
| 7,185 |
|
|
| (2,294 | ) |
|
| 57,401 |
|
|
| (6,152 | ) |
|
| 61 |
| 12,267 |
|
|
| (156 | ) |
|
| 49,617 |
|
|
| (3,987 | ) |
|
| 61,884 |
|
|
| (4,143 | ) | ||
Residential mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Agency |
|
| 101 |
| 117,598 |
|
|
| (11,045 | ) |
|
| 478,198 |
|
|
| (100,316 | ) |
|
| 595,796 |
|
|
| (111,361 | ) |
|
| 102 |
| 8,332 |
|
|
| (49 | ) |
|
| 543,648 |
|
|
| (95,365 | ) |
|
| 551,980 |
|
|
| (95,414 | ) | ||
Non-agency |
|
| 19 |
| 35,486 |
|
|
| (7,569 | ) |
|
| 70,763 |
|
|
| (16,836 | ) |
|
| 106,249 |
|
|
| (24,405 | ) |
|
| 20 |
| 636 |
|
|
| — |
|
|
| 99,624 |
|
|
| (22,099 | ) |
|
| 100,260 |
|
|
| (22,099 | ) | ||
Commercial mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Agency |
|
| 47 |
| 76,193 |
|
|
| (11,840 | ) |
|
| 74,315 |
|
|
| (22,302 | ) |
|
| 150,508 |
|
|
| (34,142 | ) |
|
| 48 |
| 6,765 |
|
|
| (1,517 | ) |
|
| 140,439 |
|
|
| (32,731 | ) |
|
| 147,204 |
|
|
| (34,248 | ) | ||
Corporate securities |
|
| 24 |
| 37,130 |
|
|
| (3,128 | ) |
|
| 4,306 |
|
|
| (738 | ) |
|
| 41,436 |
|
|
| (3,866 | ) |
|
| 21 |
| — |
|
|
| — |
|
|
| 36,171 |
|
|
| (4,510 | ) |
|
| 36,171 |
|
|
| (4,510 | ) | ||
Asset-backed securities |
|
| 8 |
|
| 25,455 |
|
|
| (503 | ) |
|
| 15,502 |
|
|
| (1,625 | ) |
|
| 40,957 |
|
|
| (2,128 | ) |
|
| 6 |
|
| — |
|
|
| — |
|
|
| 25,653 |
|
|
| (1,221 | ) |
|
| 25,653 |
|
|
| (1,221 | ) |
Total |
|
| 280 |
| $ | 408,306 |
|
| $ | (43,803 | ) |
| $ | 730,217 |
|
| $ | (160,236 | ) |
| $ | 1,138,523 |
|
| $ | (204,039 | ) |
|
| 283 |
| $ | 33,553 |
|
| $ | (1,735 | ) |
| $ | 1,046,104 |
|
| $ | (177,329 | ) |
| $ | 1,079,657 |
|
| $ | (179,064 | ) |
Held-to-maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Obligations of states, |
|
| 4 |
| $ | 2,672 |
|
| $ | (33 | ) |
| $ | — |
|
| $ | — |
|
| $ | 2,672 |
|
| $ | (33 | ) |
|
| 2 |
| $ | — |
|
| $ | — |
|
| $ | 1,149 |
|
| $ | (8 | ) |
| $ | 1,149 |
|
| $ | (8 | ) |
Total |
|
| 4 |
| $ | 2,672 |
|
| $ | (33 | ) |
| $ | — |
|
| $ | — |
|
| $ | 2,672 |
|
| $ | (33 | ) |
|
| 2 |
| $ | — |
|
| $ | — |
|
| $ | 1,149 |
|
| $ | (8 | ) |
| $ | 1,149 |
|
| $ | (8 | ) |
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 359319 securities available-for-sale with unrealized losses at September 30, 2023.March 31, 2024. There were two securitieswas one security held-to-maturity with unrealized losses at September 30, 2023.March 31, 2024. There was no allowance for credit losses for held-to-maturity debt securities at September 30, 2023March 31, 2024 or December 31, 2022.2023. The evaluation for potential credit losses is based upon factors such as the creditworthiness of the issuers/guarantors, the underlying collateral, if applicable, and the continuing payment performance of the securities.
Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security types. The Company’s held-to-maturity portfolio contains municipal bonds that are typically rated by major rating agencies as ‘Aa’ or better. The Company uses industry historical credit loss information adjusted for current conditions to establish an allowance for credit losses. Accrued interest receivable on securities available-for-sale and held-to-maturity totaled $4.4$4.9 million and $3.9$4.5 million at September 30, 2023March 31, 2024 and December 31, 2022,2023, respectively, and are excluded from the estimate of credit losses.
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.
TheThere were no proceeds from all sales of securities available-for-sale, and thenor associated gains and losses on sales and calls of securities, for the three and nine months ended September 30,March 31, 2024 and 2023, and 2022 are listed below:respectively.
Securities posted and pledged as collateral were $
|
| For the Three Months Ended |
|
| For the Nine Months Ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Proceeds |
| $ | 163,649 |
|
| $ | 10,287 |
|
| $ | 163,649 |
|
| $ | 23,293 |
|
Gross gains |
|
| — |
|
|
| 38 |
|
|
| — |
|
|
| 100 |
|
Gross losses |
|
| — |
|
|
| 40 |
|
|
| — |
|
|
| 50 |
|
659.9 million and $
There464.5 million at March 31, 2024 and December 31, 2023. At March 31, 2024 and December 31, 2023, of those pledged, the carrying amounts of securities pledged as collateral for public fund deposits were $163.6$388.6 million and $390.3 million, respectively, and for customer repurchase agreements of $50.2 million and $47.8 million, respectively. At March 31, 2024, there were $194.3 million of sales of acquired Inland securities during the three and nine months ended September 30, 2023, respectively. The sales did not result in gains or losses given their close proximitypledged to the acquisition date. ThereFederal Reserve Bank ("FRB"). At December 31, 2023 no securities were pledged to the FRB. At March 31, 2024 and December 31, 2023, there were no securities pledged for advances from the Federal Home Loan Bank. Other securities were pledged for letters of credit and for purposes required or permitted by law. At March 31, 2024 and December 31, 2023, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.
1614
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
$2,000 in net losses and $50,000 in net gains reclassified from accumulated other comprehensive income (loss) into earnings for the three and nine months ended September 30, 2022, respectively.
Securities posted and pledged as collateral were $431.2 million and $270.6 million at September 30, 2023 and December 31, 2022. At September 30, 2023 and December 31, 2022, of those pledged, the carrying amounts of securities pledged as collateral for public fund deposits were $349.3 million and $223.5 million, respectively, and for customer repurchase agreements of $43.1 million and $23.8 million, respectively. At September 30, 2023 and December 31, 2022, there were no securities pledged for advances from the Federal Home Loan Bank. Other securities were pledged for letters of credit and for purposes required or permitted by law. At September 30, 2023 and December 31, 2022, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.
At September 30, 2023,March 31, 2024, 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 |
|
| Amortized |
|
| Fair |
| ||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Due in one year or less |
| $ | 68,353 |
|
| $ | 68,299 |
|
| $ | 75,272 |
|
| $ | 74,486 |
|
Due from one to five years |
|
| 124,265 |
|
|
| 116,033 |
|
|
| 118,834 |
|
|
| 113,034 |
|
Due from five to ten years |
|
| 180,997 |
|
|
| 156,247 |
|
|
| 163,174 |
|
|
| 146,082 |
|
Due after ten years |
|
| 48,352 |
|
|
| 40,578 |
|
|
| 46,235 |
|
|
| 41,703 |
|
Mortgage-backed securities |
|
| 1,058,427 |
|
|
| 858,772 |
|
|
| 1,158,912 |
|
|
| 1,003,842 |
|
Total |
| $ | 1,480,394 |
|
| $ | 1,239,929 |
|
| $ | 1,562,427 |
|
| $ | 1,379,147 |
|
Held-to-maturity |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Due in one year or less |
| $ | 550 |
|
| $ | 542 |
|
| $ | 1,156 |
|
| $ | 1,149 |
|
Due from one to five years |
|
| 607 |
|
|
| 591 |
|
|
| — |
|
|
| — |
|
Total |
| $ | 1,157 |
|
| $ | 1,133 |
|
| $ | 1,156 |
|
| $ | 1,149 |
|
Note 5—Loan and Lease Receivables and Allowance for Credit Losses
Loan and Lease Receivables
Outstanding loan and lease receivables as of the dates shown were categorized as follows:
|
| September 30, |
|
| December 31, |
|
| March 31, |
|
| December 31, |
| ||||
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||
Commercial real estate |
| $ | 2,285,311 |
|
| $ | 1,905,909 |
|
| $ | 2,265,195 |
|
| $ | 2,317,289 |
|
Residential real estate |
|
| 721,287 |
|
|
| 489,411 |
|
|
| 732,230 |
|
|
| 718,733 |
|
Construction, land development, and other land |
|
| 524,482 |
|
|
| 440,016 |
|
|
| 530,320 |
|
|
| 528,275 |
|
Commercial and industrial |
|
| 2,431,001 |
|
|
| 2,055,213 |
|
|
| 2,548,442 |
|
|
| 2,444,405 |
|
Installment and other |
|
| 3,188 |
|
|
| 1,709 |
|
|
| 3,076 |
|
|
| 3,138 |
|
Lease financing receivables |
|
| 635,862 |
|
|
| 518,654 |
|
|
| 685,763 |
|
|
| 659,686 |
|
Total loans and leases |
|
| 6,601,131 |
|
|
| 5,410,912 |
|
|
| 6,765,026 |
|
|
| 6,671,526 |
|
Net unamortized deferred fees and costs |
|
| 6,102 |
|
|
| 5,014 |
|
|
| 6,908 |
|
|
| 6,600 |
|
Initial direct costs |
|
| 6,070 |
|
|
| 5,332 |
|
|
| 6,280 |
|
|
| 6,180 |
|
Allowance for credit losses - loans and leases |
|
| (105,696 | ) |
|
| (81,924 | ) |
|
| (102,366 | ) |
|
| (101,686 | ) |
Net loans and leases |
| $ | 6,507,607 |
|
| $ | 5,339,334 |
|
| $ | 6,675,848 |
|
| $ | 6,582,620 |
|
|
| September 30, |
|
| December 31, |
|
| March 31, |
|
| December 31, |
| ||||
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||
Lease financing receivables |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net minimum lease payments |
| $ | 621,751 |
|
| $ | 509,980 |
|
| $ | 666,340 |
|
| $ | 644,507 |
|
Unguaranteed residual values |
|
| 84,890 |
|
|
| 54,118 |
|
|
| 101,536 |
|
|
| 92,127 |
|
Unearned income |
|
| (70,779 | ) |
|
| (45,444 | ) |
|
| (82,113 | ) |
|
| (76,948 | ) |
Total lease financing receivables |
|
| 635,862 |
|
|
| 518,654 |
|
|
| 685,763 |
|
|
| 659,686 |
|
Initial direct costs |
|
| 6,070 |
|
|
| 5,332 |
|
|
| 6,280 |
|
|
| 6,180 |
|
Lease financial receivables before allowance for |
| $ | 641,932 |
|
| $ | 523,986 |
|
| $ | 692,043 |
|
| $ | 665,866 |
|
1715
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
Total loans and leases consist of originated loans and leases, purchased credit deteriorated ("PCD") and acquired non-credit-deteriorated loans and leases. At September 30, 2023March 31, 2024 and December 31, 2022,2023, total loans and leases included the guaranteed amount of U.S. government guaranteed loans of $110.3$101.0 million and $123.2$93.3 million, respectively. At September 30, 2023March 31, 2024 and December 31, 2022,2023, the discount on the unguaranteed portion of U.S. government guaranteed loans was $26.1$25.9 million and $26.7$26.2 million, respectively, which are included in total loans and leases. At September 30, 2023March 31, 2024 and December 31, 2022,2023, installment and other loans included overdraft deposits of $359,000$1.2 million and $467,000,$754,000, respectively, which were reclassified as loans. At September 30, 2023March 31, 2024 and December 31, 2022,2023, loans and leases and loans held for sale pledged as security for borrowings were $1.8$2.1 billion and $2.2$2.2 billion, respectively. Accrued interest on loans and leases were $34.6$37.8 million and $25.5$38.9 million as of September 30, 2023March 31, 2024 and December 31, 2022,2023, respectively, and are included in the accrued interest receivable and other assets line item on the Condensed Consolidated Statement of Financial Condition.
The minimum annual lease payments for lease financing receivables as of September 30, 2023March 31, 2024 are summarized as follows:
|
| Minimum Lease |
|
| Minimum Lease |
| ||
2023 |
| $ | 41,372 |
| ||||
2024 |
|
| 202,216 |
|
| $ | 164,051 |
|
2025 |
|
| 164,780 |
|
|
| 202,138 |
|
2026 |
|
| 119,404 |
|
|
| 154,408 |
|
2027 |
|
| 69,303 |
|
|
| 96,119 |
|
2028 |
|
| 43,021 |
| ||||
Thereafter |
|
| 24,676 |
|
|
| 6,603 |
|
Total |
| $ | 621,751 |
|
| $ | 666,340 |
|
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 deterioration and are accounted for under ASC Topic 310-20. The following tables summarize the balances for each respective loan and lease category as of September 30, 2023March 31, 2024 and December 31, 2022:2023:
September 30, 2023 |
| Originated |
|
| Purchased Credit Deteriorated |
|
| Acquired |
|
| Total |
| ||||||||||||||||||||
March 31, 2024 |
| Originated |
|
| Purchased Credit Deteriorated |
|
| Acquired |
|
| Total |
| ||||||||||||||||||||
Commercial real estate |
| $ | 1,837,531 |
|
| $ | 154,573 |
|
| $ | 296,656 |
|
| $ | 2,288,760 |
|
| $ | 1,879,149 |
|
| $ | 117,460 |
|
| $ | 271,720 |
|
| $ | 2,268,329 |
|
Residential real estate |
|
| 454,456 |
|
|
| 47,485 |
|
|
| 220,091 |
|
|
| 722,032 |
|
|
| 488,887 |
|
|
| 39,535 |
|
|
| 204,589 |
|
|
| 733,011 |
|
Construction, land development, and other land |
|
| 406,334 |
|
|
| 29,587 |
|
|
| 87,087 |
|
|
| 523,008 |
|
|
| 416,996 |
|
|
| 26,418 |
|
|
| 85,553 |
|
|
| 528,967 |
|
Commercial and industrial |
|
| 2,286,058 |
|
|
| 21,014 |
|
|
| 127,253 |
|
|
| 2,434,325 |
|
|
| 2,420,952 |
|
|
| 18,100 |
|
|
| 113,673 |
|
|
| 2,552,725 |
|
Installment and other |
|
| 2,968 |
|
|
| 125 |
|
|
| 153 |
|
|
| 3,246 |
|
|
| 2,855 |
|
|
| 118 |
|
|
| 166 |
|
|
| 3,139 |
|
Lease financing receivables |
|
| 641,032 |
|
|
| — |
|
|
| 900 |
|
|
| 641,932 |
|
|
| 691,617 |
|
|
| — |
|
|
| 426 |
|
|
| 692,043 |
|
Total loans and leases |
| $ | 5,628,379 |
|
| $ | 252,784 |
|
| $ | 732,140 |
|
| $ | 6,613,303 |
|
| $ | 5,900,456 |
|
| $ | 201,631 |
|
| $ | 676,127 |
|
| $ | 6,778,214 |
|
December 31, 2022 |
| Originated |
|
| Purchased Credit Deteriorated |
|
| Acquired |
|
| Total |
| ||||||||||||||||||||
December 31, 2023 |
| Originated |
|
| Purchased Credit Deteriorated |
|
| Acquired |
|
| Total |
| ||||||||||||||||||||
Commercial real estate |
| $ | 1,712,152 |
|
| $ | 45,143 |
|
| $ | 152,193 |
|
| $ | 1,909,488 |
|
| $ | 1,907,029 |
|
| $ | 137,807 |
|
| $ | 275,476 |
|
| $ | 2,320,312 |
|
Residential real estate |
|
| 426,226 |
|
|
| 32,228 |
|
|
| 31,508 |
|
|
| 489,962 |
|
|
| 465,133 |
|
|
| 42,510 |
|
|
| 211,887 |
|
|
| 719,530 |
|
Construction, land development, and other land |
|
| 438,617 |
|
|
| 372 |
|
|
| — |
|
|
| 438,989 |
|
|
| 415,162 |
|
|
| 25,331 |
|
|
| 86,344 |
|
|
| 526,837 |
|
Commercial and industrial |
|
| 2,030,616 |
|
|
| 2,192 |
|
|
| 24,266 |
|
|
| 2,057,074 |
|
|
| 2,311,563 |
|
|
| 19,460 |
|
|
| 117,538 |
|
|
| 2,448,561 |
|
Installment and other |
|
| 1,410 |
|
|
| 140 |
|
|
| 209 |
|
|
| 1,759 |
|
|
| 2,919 |
|
|
| 125 |
|
|
| 156 |
|
|
| 3,200 |
|
Lease financing receivables |
|
| 521,689 |
|
|
| — |
|
|
| 2,297 |
|
|
| 523,986 |
|
|
| 665,239 |
|
|
| — |
|
|
| 627 |
|
|
| 665,866 |
|
Total loans and leases |
| $ | 5,130,710 |
|
| $ | 80,075 |
|
| $ | 210,473 |
|
| $ | 5,421,258 |
|
| $ | 5,767,045 |
|
| $ | 225,233 |
|
| $ | 692,028 |
|
| $ | 6,684,306 |
|
1816
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
PCD loans—The unpaid principal balance and carrying amount of PCD loans excluding an allowance for credit losses - loans and leases of $8.5$10.1 million and $1.9$10.0 million at September 30, 2023March 31, 2024 and December 31, 2022,2023, were as follows:
|
| September 30, 2023 |
|
| December 31, 2022 |
| ||||||||||
|
| Unpaid |
|
| Carrying |
|
| Unpaid |
|
| Carrying |
| ||||
Commercial real estate |
| $ | 203,025 |
|
| $ | 154,573 |
|
| $ | 85,089 |
|
| $ | 45,143 |
|
Residential real estate |
|
| 93,180 |
|
|
| 47,485 |
|
|
| 76,270 |
|
|
| 32,228 |
|
Construction, land development, and other land |
|
| 36,644 |
|
|
| 29,587 |
|
|
| 7,042 |
|
|
| 372 |
|
Commercial and industrial |
|
| 23,401 |
|
|
| 21,014 |
|
|
| 3,902 |
|
|
| 2,192 |
|
Installment and other |
|
| 789 |
|
|
| 125 |
|
|
| 807 |
|
|
| 140 |
|
Total purchased credit deteriorated loans |
| $ | 357,039 |
|
| $ | 252,784 |
|
| $ | 173,110 |
|
| $ | 80,075 |
|
|
| March 31, 2024 |
|
| December 31, 2023 |
| ||||||||||
|
| Unpaid |
|
| Carrying |
|
| Unpaid |
|
| Carrying |
| ||||
Commercial real estate |
| $ | 162,977 |
|
| $ | 117,460 |
|
| $ | 185,007 |
|
| $ | 137,807 |
|
Residential real estate |
|
| 84,559 |
|
|
| 39,535 |
|
|
| 88,036 |
|
|
| 42,510 |
|
Construction, land development, and other land |
|
| 33,140 |
|
|
| 26,418 |
|
|
| 32,140 |
|
|
| 25,331 |
|
Commercial and industrial |
|
| 20,400 |
|
|
| 18,100 |
|
|
| 21,870 |
|
|
| 19,460 |
|
Installment and other |
|
| 783 |
|
|
| 118 |
|
|
| 789 |
|
|
| 125 |
|
Total purchased credit deteriorated loans |
| $ | 301,859 |
|
| $ | 201,631 |
|
| $ | 327,842 |
|
| $ | 225,233 |
|
The following table is a reconciliation of acquired Inland 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.
Purchase price of loans at acquisition |
| $ | 214,573 |
| ||||
Fair value of loans at acquisition |
| $ | 214,573 |
| ||||
Allowance for credit losses - loans and leases, at acquisition |
|
| 10,596 |
|
|
| 10,596 |
|
Non-credit discount/premium at acquisition |
|
| 17,909 |
|
|
| 17,909 |
|
Par value of acquired loans at acquisition |
| $ | 243,078 |
| ||||
Par value of acquired PCD loans at acquisition |
| $ | 243,078 |
| ||||
Acquired non-credit-deteriorated loans and leases—The unpaid principal balance and carrying value for acquired non-credit deteriorated loans and leases, excluding an allowance for credit losses of $6.7$4.6 million and $5.3$4.7 million at September 30, 2023March 31, 2024 and December 31, 2022,2023, were as follows:
|
| September 30, 2023 |
|
| December 31, 2022 |
|
| March 31, 2024 |
|
| December 31, 2023 |
| ||||||||||||||||||||
|
| Unpaid |
|
| Carrying |
|
| Unpaid |
|
| Carrying |
|
| Unpaid |
|
| Carrying |
|
| Unpaid |
|
| Carrying |
| ||||||||
Commercial real estate |
| $ | 307,159 |
|
| $ | 296,656 |
|
| $ | 155,652 |
|
| $ | 152,193 |
|
| $ | 280,291 |
|
| $ | 271,720 |
|
| $ | 284,819 |
|
| $ | 275,476 |
|
Residential real estate |
|
| 236,123 |
|
|
| 220,091 |
|
|
| 31,863 |
|
|
| 31,508 |
|
|
| 209,952 |
|
|
| 204,589 |
|
|
| 227,392 |
|
|
| 211,887 |
|
Construction, land development, and other land |
|
| 88,089 |
|
|
| 87,087 |
|
|
| 63 |
|
|
| — |
|
|
| 86,168 |
|
|
| 85,553 |
|
|
| 87,143 |
|
|
| 86,344 |
|
Commercial and industrial |
|
| 133,886 |
|
|
| 127,253 |
|
|
| 25,022 |
|
|
| 24,266 |
|
|
| 119,197 |
|
|
| 113,673 |
|
|
| 123,540 |
|
|
| 117,538 |
|
Installment and other |
|
| 168 |
|
|
| 153 |
|
|
| 216 |
|
|
| 209 |
|
|
| 179 |
|
|
| 166 |
|
|
| 170 |
|
|
| 156 |
|
Lease financing receivables |
|
| 901 |
|
|
| 900 |
|
|
| 2,302 |
|
|
| 2,297 |
|
|
| 427 |
|
|
| 426 |
|
|
| 628 |
|
|
| 627 |
|
Total acquired non-credit-deteriorated |
| $ | 766,326 |
|
| $ | 732,140 |
|
| $ | 215,118 |
|
| $ | 210,473 |
|
| $ | 696,214 |
|
| $ | 676,127 |
|
| $ | 723,692 |
|
| $ | 692,028 |
|
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 Hedging 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 $1.0$1.0 million or more are reviewed annually. The risk rating categories are described by the following groupings:
Pass—1‑4, risk levels of borrowers and guarantors that offer a minimal to an acceptable level of risk.
Watch—5, credit exposure that presents higher than average risk and warrants greater than routine attention.
Special Mention—6, potential weaknesses that if left uncorrected may result in deterioration of the repayment prospects.
Substandard Accrual—7, weaknesses in cash flow and collateral coverage resulting in a distinct possibility of losses if not corrected. Used in limited cases, where the borrower is current on payments and an agreed plan for credit remediation.
19
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
Substandard Non‑Accrual—8, well‑defined weakness or weaknesses in cash flow and collateral coverage resulting in the distinct possibility of losses if not corrected.
Doubtful—9, weaknesses inherent in 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.
17
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
Loss—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.
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 the risk rating categories of the loans and leases considered for inclusion in the allowance for credit losses - loans and leases calculation, as of September 30, 2023March 31, 2024 and December 31, 2022:2023:
|
| Term loans amortized cost by origination year |
|
| Revolving |
|
| Total |
|
| Term loans amortized cost by origination year |
|
| Revolving |
|
| Total |
| ||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2023 |
| 2023 |
|
| 2022 |
|
| 2021 |
|
| 2020 |
|
| 2019 |
|
| Prior |
|
| Loans |
|
| Loans |
| ||||||||||||||||||||||||||||||||||||||||
March 31, 2024 |
| 2024 |
|
| 2023 |
|
| 2022 |
|
| 2021 |
|
| 2020 |
|
| Prior |
|
| Loans |
|
| Loans |
| ||||||||||||||||||||||||||||||||||||||||
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Pass |
| $ | 182,440 |
|
| $ | 463,022 |
|
| $ | 531,822 |
|
| $ | 230,286 |
|
| $ | 130,489 |
|
| $ | 413,552 |
|
| $ | 16,867 |
|
| $ | 1,968,478 |
|
| $ | 49,831 |
|
| $ | 249,142 |
|
| $ | 438,366 |
|
| $ | 497,715 |
|
| $ | 236,622 |
|
| $ | 514,023 |
|
| $ | 14,124 |
|
| $ | 1,999,823 |
|
Watch |
|
| 862 |
|
|
| 24,096 |
|
|
| 38,106 |
|
|
| 36,454 |
|
|
| 21,379 |
|
|
| 83,326 |
|
|
| — |
|
|
| 204,223 |
|
|
| 975 |
|
|
| 13,665 |
|
|
| 19,734 |
|
|
| 16,039 |
|
|
| 37,322 |
|
|
| 72,490 |
|
|
| — |
|
|
| 160,225 |
|
Special Mention |
|
| — |
|
|
| 1,100 |
|
|
| 3,419 |
|
|
| 2,645 |
|
|
| 7,581 |
|
|
| 20,539 |
|
|
| — |
|
|
| 35,284 |
|
|
| — |
|
|
| 7,635 |
|
|
| 1,836 |
|
|
| 10,432 |
|
|
| 2,595 |
|
|
| 34,684 |
|
|
| — |
|
|
| 57,182 |
|
Substandard |
|
| — |
|
|
| 1,228 |
|
|
| 5,509 |
|
|
| 2,787 |
|
|
| 18,081 |
|
|
| 52,348 |
|
|
| 822 |
|
|
| 80,775 |
|
|
| — |
|
|
| 638 |
|
|
| 3,808 |
|
|
| 4,852 |
|
|
| 1,194 |
|
|
| 40,607 |
|
|
| — |
|
|
| 51,099 |
|
Total |
| $ | 183,302 |
|
| $ | 489,446 |
|
| $ | 578,856 |
|
| $ | 272,172 |
|
| $ | 177,530 |
|
| $ | 569,765 |
|
| $ | 17,689 |
|
| $ | 2,288,760 |
|
| $ | 50,806 |
|
| $ | 271,080 |
|
| $ | 463,744 |
|
| $ | 529,038 |
|
| $ | 277,733 |
|
| $ | 661,804 |
|
| $ | 14,124 |
|
| $ | 2,268,329 |
|
Gross charge-offs for the nine months |
| $ | — |
|
| $ | — |
|
| $ | 60 |
|
| $ | 211 |
|
| $ | 2,042 |
|
| $ | 2,958 |
|
| $ | — |
|
| $ | 5,271 |
| ||||||||||||||||||||||||||||||||
Gross charge-offs for the three months |
| $ | — |
|
| $ | — |
|
| $ | 286 |
|
| $ | 88 |
|
| $ | 575 |
|
| $ | 2,108 |
|
| $ | — |
|
| $ | 3,057 |
| ||||||||||||||||||||||||||||||||
Residential Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Pass |
| $ | 46,819 |
|
| $ | 140,026 |
|
| $ | 90,326 |
|
| $ | 68,315 |
|
| $ | 37,126 |
|
| $ | 229,323 |
|
| $ | 57,802 |
|
| $ | 669,737 |
|
| $ | 6,795 |
|
| $ | 49,973 |
|
| $ | 135,135 |
|
| $ | 119,107 |
|
| $ | 51,950 |
|
| $ | 263,998 |
|
| $ | 56,965 |
|
| $ | 683,923 |
|
Watch |
|
| — |
|
|
| 1,374 |
|
|
| 14,450 |
|
|
| 4,710 |
|
|
| 8,354 |
|
|
| 15,131 |
|
|
| 2,683 |
|
|
| 46,702 |
|
|
| — |
|
|
| — |
|
|
| 5,389 |
|
|
| 406 |
|
|
| 16,848 |
|
|
| 12,933 |
|
|
| 2,392 |
|
|
| 37,968 |
|
Special Mention |
|
| — |
|
|
| — |
|
|
| 108 |
|
|
| 3,610 |
|
|
| 14 |
|
|
| 526 |
|
|
| 24 |
|
|
| 4,282 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 3,767 |
|
|
| 480 |
|
|
| — |
|
|
| 4,247 |
|
Substandard |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 193 |
|
|
| 358 |
|
|
| 760 |
|
|
| — |
|
|
| 1,311 |
|
|
| 200 |
|
|
| — |
|
|
| 29 |
|
|
| 105 |
|
|
| 1,077 |
|
|
| 4,516 |
|
|
| 946 |
|
|
| 6,873 |
|
Total |
| $ | 46,819 |
|
| $ | 141,400 |
|
| $ | 104,884 |
|
| $ | 76,828 |
|
| $ | 45,852 |
|
| $ | 245,740 |
|
| $ | 60,509 |
|
| $ | 722,032 |
|
| $ | 6,995 |
|
| $ | 49,973 |
|
| $ | 140,553 |
|
| $ | 119,618 |
|
| $ | 73,642 |
|
| $ | 281,927 |
|
| $ | 60,303 |
|
| $ | 733,011 |
|
Gross charge-offs for the nine months |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 21 |
|
| $ | — |
|
| $ | 21 |
| ||||||||||||||||||||||||||||||||
Gross charge-offs for the three months |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
| ||||||||||||||||||||||||||||||||
Construction, Land Development, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Pass |
| $ | 46,456 |
|
| $ | 126,737 |
|
| $ | 186,112 |
|
| $ | 53,507 |
|
| $ | 23,459 |
|
| $ | 26,763 |
|
| $ | 11,557 |
|
| $ | 474,591 |
|
| $ | — |
|
| $ | 114,072 |
|
| $ | 124,789 |
|
| $ | 179,184 |
|
| $ | 37,041 |
|
| $ | 11,126 |
|
| $ | 826 |
|
| $ | 467,038 |
|
Watch |
|
| 1,466 |
|
|
| 6,585 |
|
|
| 12,395 |
|
|
| 18,421 |
|
|
| 3,139 |
|
|
| — |
|
|
| — |
|
|
| 42,006 |
|
|
| — |
|
|
| 1,391 |
|
|
| 14,408 |
|
|
| 24,777 |
|
|
| 8,805 |
|
|
| 3,110 |
|
|
| — |
|
|
| 52,491 |
|
Special Mention |
|
| — |
|
|
| — |
|
|
| 6,411 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 6,411 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 9,438 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 9,438 |
|
Substandard |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total |
| $ | 47,922 |
|
| $ | 133,322 |
|
| $ | 204,918 |
|
| $ | 71,928 |
|
| $ | 26,598 |
|
| $ | 26,763 |
|
| $ | 11,557 |
|
| $ | 523,008 |
|
| $ | — |
|
| $ | 115,463 |
|
| $ | 139,197 |
|
| $ | 213,399 |
|
| $ | 45,846 |
|
| $ | 14,236 |
|
| $ | 826 |
|
| $ | 528,967 |
|
Gross charge-offs for the nine months |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
| ||||||||||||||||||||||||||||||||
Gross charge-offs for the three months |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
| ||||||||||||||||||||||||||||||||
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Pass |
| $ | 384,457 |
|
| $ | 523,358 |
|
| $ | 290,411 |
|
| $ | 139,512 |
|
| $ | 79,656 |
|
| $ | 162,813 |
|
| $ | 524,326 |
|
| $ | 2,104,533 |
|
| $ | 127,262 |
|
| $ | 472,634 |
|
| $ | 488,279 |
|
| $ | 282,042 |
|
| $ | 103,274 |
|
| $ | 206,107 |
|
| $ | 540,979 |
|
| $ | 2,220,577 |
|
Watch |
|
| 39,312 |
|
|
| 34,762 |
|
|
| 58,411 |
|
|
| 1,697 |
|
|
| 7,963 |
|
|
| 21,433 |
|
|
| 51,924 |
|
|
| 215,502 |
|
|
| 80 |
|
|
| 55,427 |
|
|
| 21,754 |
|
|
| 46,969 |
|
|
| 2,478 |
|
|
| 20,120 |
|
|
| 40,803 |
|
|
| 187,631 |
|
Special Mention |
|
| — |
|
|
| 3,338 |
|
|
| 7,551 |
|
|
| 1,208 |
|
|
| 557 |
|
|
| 8,791 |
|
|
| 37,257 |
|
|
| 58,702 |
|
|
| — |
|
|
| 366 |
|
|
| 20,531 |
|
|
| 10,589 |
|
|
| 2,326 |
|
|
| 6,418 |
|
|
| 40,738 |
|
|
| 80,968 |
|
Substandard |
|
| 999 |
|
|
| 4,441 |
|
|
| 7,853 |
|
|
| 8,582 |
|
|
| 11,016 |
|
|
| 10,279 |
|
|
| 12,418 |
|
|
| 55,588 |
|
|
| — |
|
|
| 541 |
|
|
| 9,390 |
|
|
| 9,867 |
|
|
| 5,785 |
|
|
| 25,346 |
|
|
| 12,620 |
|
|
| 63,549 |
|
Total |
| $ | 424,768 |
|
| $ | 565,899 |
|
| $ | 364,226 |
|
| $ | 150,999 |
|
| $ | 99,192 |
|
| $ | 203,316 |
|
| $ | 625,925 |
|
| $ | 2,434,325 |
|
| $ | 127,342 |
|
| $ | 528,968 |
|
| $ | 539,954 |
|
| $ | 349,467 |
|
| $ | 113,863 |
|
| $ | 257,991 |
|
| $ | 635,140 |
|
| $ | 2,552,725 |
|
Gross charge-offs for the nine months |
| $ | 510 |
|
| $ | 1,598 |
|
| $ | 1,772 |
|
| $ | 2,581 |
|
| $ | 807 |
|
| $ | 819 |
|
| $ | — |
|
| $ | 8,087 |
| ||||||||||||||||||||||||||||||||
Gross charge-offs for the three months |
| $ | — |
|
| $ | — |
|
| $ | 909 |
|
| $ | 735 |
|
| $ | 398 |
|
| $ | 1,577 |
|
| $ | — |
|
| $ | 3,619 |
| ||||||||||||||||||||||||||||||||
Installment and Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Pass |
| $ | 562 |
|
| $ | 118 |
|
| $ | 114 |
|
| $ | 136 |
|
| $ | 43 |
|
| $ | 440 |
|
| $ | 1,804 |
|
| $ | 3,217 |
|
| $ | 145 |
|
| $ | 408 |
|
| $ | 116 |
|
| $ | 56 |
|
| $ | 130 |
|
| $ | 430 |
|
| $ | 1,830 |
|
| $ | 3,115 |
|
Watch |
|
| — |
|
|
| 29 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 29 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 23 |
|
|
| — |
|
|
| — |
|
|
| 1 |
|
|
| 24 |
|
Special Mention |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Substandard |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total |
| $ | 562 |
|
| $ | 147 |
|
| $ | 114 |
|
| $ | 136 |
|
| $ | 43 |
|
| $ | 440 |
|
| $ | 1,804 |
|
| $ | 3,246 |
|
| $ | 145 |
|
| $ | 408 |
|
| $ | 116 |
|
| $ | 79 |
|
| $ | 130 |
|
| $ | 430 |
|
| $ | 1,831 |
|
| $ | 3,139 |
|
Gross charge-offs for the nine months |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 3 |
|
| $ | — |
|
| $ | 3 |
| ||||||||||||||||||||||||||||||||
Gross charge-offs for the three months |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
| ||||||||||||||||||||||||||||||||
Lease Financing Receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Pass |
| $ | 260,590 |
|
| $ | 228,612 |
|
| $ | 106,232 |
|
| $ | 34,456 |
|
| $ | 7,362 |
|
| $ | 1,814 |
|
| $ | — |
|
| $ | 639,066 |
|
| $ | 87,748 |
|
| $ | 303,606 |
|
| $ | 187,907 |
|
| $ | 81,700 |
|
| $ | 24,808 |
|
| $ | 4,149 |
|
| $ | — |
|
| $ | 689,918 |
|
Watch |
|
| — |
|
|
| 74 |
|
|
| 1,224 |
|
|
| 18 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,316 |
|
|
| — |
|
|
| — |
|
|
| 61 |
|
|
| 912 |
|
|
| 14 |
|
|
| — |
|
|
| — |
|
|
| 987 |
|
Special Mention |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 203 |
|
|
| 122 |
|
|
| 64 |
|
|
| — |
|
|
| 389 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 155 |
|
|
| 99 |
|
|
| — |
|
|
| 254 |
|
Substandard |
|
| — |
|
|
| 567 |
|
|
| 508 |
|
|
| 86 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,161 |
|
|
| — |
|
|
| 173 |
|
|
| 141 |
|
|
| 523 |
|
|
| 44 |
|
|
| 3 |
|
|
| — |
|
|
| 884 |
|
Total |
| $ | 260,590 |
|
| $ | 229,253 |
|
| $ | 107,964 |
|
| $ | 34,763 |
|
| $ | 7,484 |
|
| $ | 1,878 |
|
| $ | — |
|
| $ | 641,932 |
|
| $ | 87,748 |
|
| $ | 303,779 |
|
| $ | 188,109 |
|
| $ | 83,135 |
|
| $ | 25,021 |
|
| $ | 4,251 |
|
| $ | — |
|
| $ | 692,043 |
|
Gross charge-offs for the nine months |
| $ | — |
|
| $ | 676 |
|
| $ | 446 |
|
| $ | 119 |
|
| $ | 75 |
|
| $ | 54 |
|
| $ | — |
|
| $ | 1,370 |
| ||||||||||||||||||||||||||||||||
Gross charge-offs for the three months |
| $ | — |
|
| $ | 95 |
|
| $ | 175 |
|
| $ | 80 |
|
| $ | 23 |
|
| $ | — |
|
| $ | — |
|
| $ | 373 |
| ||||||||||||||||||||||||||||||||
Total Loans and Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Pass |
| $ | 921,324 |
|
| $ | 1,481,873 |
|
| $ | 1,205,017 |
|
| $ | 526,212 |
|
| $ | 278,135 |
|
| $ | 834,705 |
|
| $ | 612,356 |
|
| $ | 5,859,622 |
|
| $ | 271,781 |
|
| $ | 1,189,835 |
|
| $ | 1,374,592 |
|
| $ | 1,159,804 |
|
| $ | 453,825 |
|
| $ | 999,833 |
|
| $ | 614,724 |
|
| $ | 6,064,394 |
|
Watch |
|
| 41,640 |
|
|
| 66,920 |
|
|
| 124,586 |
|
|
| 61,300 |
|
|
| 40,835 |
|
|
| 119,890 |
|
|
| 54,607 |
|
|
| 509,778 |
|
|
| 1,055 |
|
|
| 70,483 |
|
|
| 61,346 |
|
|
| 89,126 |
|
|
| 65,467 |
|
|
| 108,653 |
|
|
| 43,196 |
|
|
| 439,326 |
|
Special Mention |
|
| — |
|
|
| 4,438 |
|
|
| 17,489 |
|
|
| 7,666 |
|
|
| 8,274 |
|
|
| 29,920 |
|
|
| 37,281 |
|
|
| 105,068 |
|
|
| — |
|
|
| 8,001 |
|
|
| 22,367 |
|
|
| 30,459 |
|
|
| 8,843 |
|
|
| 41,681 |
|
|
| 40,738 |
|
|
| 152,089 |
|
Substandard |
|
| 999 |
|
|
| 6,236 |
|
|
| 13,870 |
|
|
| 11,648 |
|
|
| 29,455 |
|
|
| 63,387 |
|
|
| 13,240 |
|
|
| 138,835 |
|
|
| 200 |
|
|
| 1,352 |
|
|
| 13,368 |
|
|
| 15,347 |
|
|
| 8,100 |
|
|
| 70,472 |
|
|
| 13,566 |
|
|
| 122,405 |
|
Total |
| $ | 963,963 |
|
| $ | 1,559,467 |
|
| $ | 1,360,962 |
|
| $ | 606,826 |
|
| $ | 356,699 |
|
| $ | 1,047,902 |
|
| $ | 717,484 |
|
| $ | 6,613,303 |
|
| $ | 273,036 |
|
| $ | 1,269,671 |
|
| $ | 1,471,673 |
|
| $ | 1,294,736 |
|
| $ | 536,235 |
|
| $ | 1,220,639 |
|
| $ | 712,224 |
|
| $ | 6,778,214 |
|
Gross charge-offs for the nine months |
| $ | 510 |
|
| $ | 2,274 |
|
| $ | 2,278 |
|
| $ | 2,911 |
|
| $ | 2,924 |
|
| $ | 3,855 |
|
| $ | — |
|
| $ | 14,752 |
| ||||||||||||||||||||||||||||||||
Gross charge-offs for the three months |
| $ | — |
|
| $ | 95 |
|
| $ | 1,370 |
|
| $ | 903 |
|
| $ | 996 |
|
| $ | 3,685 |
|
| $ | — |
|
| $ | 7,049 |
| ||||||||||||||||||||||||||||||||
18
21
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, 2022 |
| 2022 |
|
| 2021 |
|
| 2020 |
|
| 2019 |
|
| 2018 |
|
| Prior |
|
| Loans |
|
| Loans (1) |
| ||||||||
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pass |
| $ | 471,009 |
|
| $ | 510,529 |
|
| $ | 207,765 |
|
| $ | 111,792 |
|
| $ | 84,382 |
|
| $ | 324,271 |
|
| $ | 28,343 |
|
| $ | 1,738,091 |
|
Watch |
|
| 6,422 |
|
|
| 12,723 |
|
|
| 20,583 |
|
|
| 11,004 |
|
|
| 17,269 |
|
|
| 44,462 |
|
|
| — |
|
|
| 112,463 |
|
Special Mention |
|
| — |
|
|
| — |
|
|
| 121 |
|
|
| 1,075 |
|
|
| 1,232 |
|
|
| 10,075 |
|
|
| — |
|
|
| 12,503 |
|
Substandard |
|
| — |
|
|
| 1,910 |
|
|
| 915 |
|
|
| 13,042 |
|
|
| 12,685 |
|
|
| 22,915 |
|
|
| — |
|
|
| 51,467 |
|
Total |
| $ | 477,431 |
|
| $ | 525,162 |
|
| $ | 229,384 |
|
| $ | 136,913 |
|
| $ | 115,568 |
|
| $ | 401,723 |
|
| $ | 28,343 |
|
| $ | 1,914,524 |
|
Residential Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pass |
| $ | 68,752 |
|
| $ | 59,075 |
|
| $ | 41,768 |
|
| $ | 31,726 |
|
| $ | 48,432 |
|
| $ | 170,279 |
|
| $ | 49,622 |
|
| $ | 469,654 |
|
Watch |
|
| — |
|
|
| — |
|
|
| 1,137 |
|
|
| 682 |
|
|
| 4,098 |
|
|
| 9,026 |
|
|
| 2,586 |
|
|
| 17,529 |
|
Special Mention |
|
| — |
|
|
| — |
|
|
| 323 |
|
|
| 32 |
|
|
| 420 |
|
|
| 876 |
|
|
| — |
|
|
| 1,651 |
|
Substandard |
|
| — |
|
|
| — |
|
|
| 234 |
|
|
| 381 |
|
|
| 296 |
|
|
| 2,185 |
|
|
| 660 |
|
|
| 3,756 |
|
Total |
| $ | 68,752 |
|
| $ | 59,075 |
|
| $ | 43,462 |
|
| $ | 32,821 |
|
| $ | 53,246 |
|
| $ | 182,366 |
|
| $ | 52,868 |
|
| $ | 492,590 |
|
Construction, Land Development, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pass |
| $ | 62,310 |
|
| $ | 203,672 |
|
| $ | 61,895 |
|
| $ | 27,189 |
|
| $ | 26,489 |
|
| $ | 38,186 |
|
| $ | 185 |
|
| $ | 419,926 |
|
Watch |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,409 |
|
|
| — |
|
|
| 3,064 |
|
|
| — |
|
|
| 7,473 |
|
Special Mention |
|
| — |
|
|
| — |
|
|
| 1,845 |
|
|
| — |
|
|
| 4,199 |
|
|
| — |
|
|
| — |
|
|
| 6,044 |
|
Substandard |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,530 |
|
|
| 4,012 |
|
|
| 4 |
|
|
| — |
|
|
| 5,546 |
|
Total |
| $ | 62,310 |
|
| $ | 203,672 |
|
| $ | 63,740 |
|
| $ | 33,128 |
|
| $ | 34,700 |
|
| $ | 41,254 |
|
| $ | 185 |
|
| $ | 438,989 |
|
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pass |
| $ | 508,664 |
|
| $ | 305,056 |
|
| $ | 137,335 |
|
| $ | 72,486 |
|
| $ | 96,304 |
|
| $ | 113,965 |
|
| $ | 549,431 |
|
| $ | 1,783,241 |
|
Watch |
|
| 16,657 |
|
|
| 20,856 |
|
|
| 15,857 |
|
|
| 32,282 |
|
|
| 19,362 |
|
|
| 9,809 |
|
|
| 47,119 |
|
|
| 161,942 |
|
Special Mention |
|
| — |
|
|
| 13,056 |
|
|
| 697 |
|
|
| 1,162 |
|
|
| 2,958 |
|
|
| 7,831 |
|
|
| 22,320 |
|
|
| 48,024 |
|
Substandard |
|
| 1,156 |
|
|
| 3,415 |
|
|
| 6,671 |
|
|
| 11,949 |
|
|
| 5,434 |
|
|
| 25,275 |
|
|
| 10,738 |
|
|
| 64,638 |
|
Total |
| $ | 526,477 |
|
| $ | 342,383 |
|
| $ | 160,560 |
|
| $ | 117,879 |
|
| $ | 124,058 |
|
| $ | 156,880 |
|
| $ | 629,608 |
|
| $ | 2,057,845 |
|
Installment and Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pass |
| $ | 332 |
|
| $ | 146 |
|
| $ | 65 |
|
| $ | 79 |
|
| $ | 15 |
|
| $ | 584 |
|
| $ | 429 |
|
| $ | 1,650 |
|
Watch |
|
| 34 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2 |
|
|
| 73 |
|
|
| — |
|
|
| 109 |
|
Special Mention |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Substandard |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total |
| $ | 366 |
|
| $ | 146 |
|
| $ | 65 |
|
| $ | 79 |
|
| $ | 17 |
|
| $ | 657 |
|
| $ | 429 |
|
| $ | 1,759 |
|
Lease Financing Receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pass |
| $ | 296,395 |
|
| $ | 148,588 |
|
| $ | 53,642 |
|
| $ | 14,478 |
|
| $ | 7,245 |
|
| $ | 934 |
|
| $ | — |
|
| $ | 521,282 |
|
Watch |
|
| 93 |
|
|
| 1,560 |
|
|
| 26 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,679 |
|
Special Mention |
|
| — |
|
|
| — |
|
|
| 290 |
|
|
| 182 |
|
|
| 250 |
|
|
| 23 |
|
|
| — |
|
|
| 745 |
|
Substandard |
|
| 35 |
|
|
| 82 |
|
|
| 80 |
|
|
| 77 |
|
|
| 6 |
|
|
| — |
|
|
| — |
|
|
| 280 |
|
Total |
| $ | 296,523 |
|
| $ | 150,230 |
|
| $ | 54,038 |
|
| $ | 14,737 |
|
| $ | 7,501 |
|
| $ | 957 |
|
| $ | — |
|
| $ | 523,986 |
|
Total Loans and Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pass |
| $ | 1,407,462 |
|
| $ | 1,227,066 |
|
| $ | 502,470 |
|
| $ | 257,750 |
|
| $ | 262,867 |
|
| $ | 648,219 |
|
| $ | 628,010 |
|
| $ | 4,933,844 |
|
Watch |
|
| 23,206 |
|
|
| 35,139 |
|
|
| 37,603 |
|
|
| 48,377 |
|
|
| 40,731 |
|
|
| 66,434 |
|
|
| 49,705 |
|
|
| 301,195 |
|
Special Mention |
|
| — |
|
|
| 13,056 |
|
|
| 3,276 |
|
|
| 2,451 |
|
|
| 9,059 |
|
|
| 18,805 |
|
|
| 22,320 |
|
|
| 68,967 |
|
Substandard |
|
| 1,191 |
|
|
| 5,407 |
|
|
| 7,900 |
|
|
| 26,979 |
|
|
| 22,433 |
|
|
| 50,379 |
|
|
| 11,398 |
|
|
| 125,687 |
|
Total |
| $ | 1,431,859 |
|
| $ | 1,280,668 |
|
| $ | 551,249 |
|
| $ | 335,557 |
|
| $ | 335,090 |
|
| $ | 783,837 |
|
| $ | 711,433 |
|
| $ | 5,429,693 |
|
|
| Term loans amortized cost by origination year |
|
| Revolving |
|
| Total |
| |||||||||||||||||||||||
December 31, 2023 |
| 2023 |
|
| 2022 |
|
| 2021 |
|
| 2020 |
|
| 2019 |
|
| Prior |
|
| Loans |
|
| Loans |
| ||||||||
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pass |
| $ | 247,856 |
|
| $ | 452,127 |
|
| $ | 516,624 |
|
| $ | 229,053 |
|
| $ | 143,283 |
|
| $ | 388,872 |
|
| $ | 28,360 |
|
| $ | 2,006,175 |
|
Watch |
|
| 12,501 |
|
|
| 22,094 |
|
|
| 26,408 |
|
|
| 46,713 |
|
|
| 20,364 |
|
|
| 68,003 |
|
|
| — |
|
|
| 196,083 |
|
Special Mention |
|
| — |
|
|
| 799 |
|
|
| 10,752 |
|
|
| 2,618 |
|
|
| 12,751 |
|
|
| 25,790 |
|
|
| — |
|
|
| 52,710 |
|
Substandard |
|
| — |
|
|
| 2,888 |
|
|
| 5,841 |
|
|
| 1,771 |
|
|
| 7,483 |
|
|
| 46,532 |
|
|
| 829 |
|
|
| 65,344 |
|
Total |
| $ | 260,357 |
|
| $ | 477,908 |
|
| $ | 559,625 |
|
| $ | 280,155 |
|
| $ | 183,881 |
|
| $ | 529,197 |
|
| $ | 29,189 |
|
| $ | 2,320,312 |
|
Gross charge-offs, year ended |
| $ | — |
|
| $ | 193 |
|
| $ | 60 |
|
| $ | 1,511 |
|
| $ | 4,054 |
|
| $ | 3,911 |
|
| $ | — |
|
| $ | 9,729 |
|
Residential Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pass |
| $ | 55,178 |
|
| $ | 135,477 |
|
| $ | 104,005 |
|
| $ | 54,651 |
|
| $ | 37,806 |
|
| $ | 225,593 |
|
| $ | 57,865 |
|
| $ | 670,575 |
|
Watch |
|
| — |
|
|
| 4,811 |
|
|
| — |
|
|
| 17,417 |
|
|
| 7,167 |
|
|
| 8,708 |
|
|
| 1,597 |
|
|
| 39,700 |
|
Special Mention |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 3,594 |
|
|
| 127 |
|
|
| 1 |
|
|
| 413 |
|
|
| 4,135 |
|
Substandard |
|
| — |
|
|
| — |
|
|
| 107 |
|
|
| 189 |
|
|
| 349 |
|
|
| 3,523 |
|
|
| 952 |
|
|
| 5,120 |
|
Total |
| $ | 55,178 |
|
| $ | 140,288 |
|
| $ | 104,112 |
|
| $ | 75,851 |
|
| $ | 45,449 |
|
| $ | 237,825 |
|
| $ | 60,827 |
|
| $ | 719,530 |
|
Gross charge-offs, year ended |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 21 |
|
| $ | — |
|
| $ | 21 |
|
Construction, Land Development, & Land |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pass |
| $ | 82,449 |
|
| $ | 145,174 |
|
| $ | 184,544 |
|
| $ | 35,466 |
|
| $ | 9,772 |
|
| $ | 1,429 |
|
| $ | 174 |
|
| $ | 459,008 |
|
Watch |
|
| 1,392 |
|
|
| 13,990 |
|
|
| 21,313 |
|
|
| 18,716 |
|
|
| 3,125 |
|
|
| — |
|
|
| — |
|
|
| 58,536 |
|
Special Mention |
|
| — |
|
|
| — |
|
|
| 9,279 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 9,279 |
|
Substandard |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 14 |
|
|
| — |
|
|
| 14 |
|
Total |
| $ | 83,841 |
|
| $ | 159,164 |
|
| $ | 215,136 |
|
| $ | 54,182 |
|
| $ | 12,897 |
|
| $ | 1,443 |
|
| $ | 174 |
|
| $ | 526,837 |
|
Gross charge-offs, year ended |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pass |
| $ | 475,720 |
|
| $ | 514,902 |
|
| $ | 288,392 |
|
| $ | 109,430 |
|
| $ | 73,059 |
|
| $ | 147,168 |
|
| $ | 524,348 |
|
| $ | 2,133,019 |
|
Watch |
|
| 41,027 |
|
|
| 33,080 |
|
|
| 50,407 |
|
|
| 1,385 |
|
|
| 6,951 |
|
|
| 18,180 |
|
|
| 39,531 |
|
|
| 190,561 |
|
Special Mention |
|
| — |
|
|
| 6,164 |
|
|
| 10,595 |
|
|
| 2,631 |
|
|
| 1,112 |
|
|
| 6,643 |
|
|
| 36,354 |
|
|
| 63,499 |
|
Substandard |
|
| — |
|
|
| 7,332 |
|
|
| 6,067 |
|
|
| 6,431 |
|
|
| 10,116 |
|
|
| 18,381 |
|
|
| 13,155 |
|
|
| 61,482 |
|
Total |
| $ | 516,747 |
|
| $ | 561,478 |
|
| $ | 355,461 |
|
| $ | 119,877 |
|
| $ | 91,238 |
|
| $ | 190,372 |
|
| $ | 613,388 |
|
| $ | 2,448,561 |
|
Gross charge-offs, year ended |
| $ | 1,518 |
|
| $ | 1,938 |
|
| $ | 5,372 |
|
| $ | 4,451 |
|
| $ | 1,087 |
|
| $ | 1,045 |
|
| $ | — |
|
| $ | 15,411 |
|
Installment and Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pass |
| $ | 564 |
|
| $ | 132 |
|
| $ | 79 |
|
| $ | 133 |
|
| $ | 28 |
|
| $ | 424 |
|
| $ | 1,814 |
|
| $ | 3,174 |
|
Watch |
|
| — |
|
|
| — |
|
|
| 25 |
|
|
| — |
|
|
| — |
|
|
| 1 |
|
|
| — |
|
|
| 26 |
|
Special Mention |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Substandard |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total |
| $ | 564 |
|
| $ | 132 |
|
| $ | 104 |
|
| $ | 133 |
|
| $ | 28 |
|
| $ | 425 |
|
| $ | 1,814 |
|
| $ | 3,200 |
|
Gross charge-offs, year ended |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 3 |
|
| $ | — |
|
| $ | 3 |
|
Lease Financing Receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pass |
| $ | 327,099 |
|
| $ | 207,640 |
|
| $ | 93,242 |
|
| $ | 29,343 |
|
| $ | 5,443 |
|
| $ | 856 |
|
| $ | — |
|
| $ | 663,623 |
|
Watch |
|
| — |
|
|
| 67 |
|
|
| 1,008 |
|
|
| 16 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,091 |
|
Special Mention |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 179 |
|
|
| 101 |
|
|
| 36 |
|
|
| — |
|
|
| 316 |
|
Substandard |
|
| 259 |
|
|
| 138 |
|
|
| 384 |
|
|
| 55 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 836 |
|
Total |
| $ | 327,358 |
|
| $ | 207,845 |
|
| $ | 94,634 |
|
| $ | 29,593 |
|
| $ | 5,544 |
|
| $ | 892 |
|
| $ | — |
|
| $ | 665,866 |
|
Gross charge-offs, year ended |
| $ | 734 |
|
| $ | 886 |
|
| $ | 549 |
|
| $ | 139 |
|
| $ | 75 |
|
| $ | 54 |
|
| $ | — |
|
| $ | 2,437 |
|
Total Loans and Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pass |
| $ | 1,188,866 |
|
| $ | 1,455,452 |
|
| $ | 1,186,886 |
|
| $ | 458,076 |
|
| $ | 269,391 |
|
| $ | 764,342 |
|
| $ | 612,561 |
|
| $ | 5,935,574 |
|
Watch |
|
| 54,920 |
|
|
| 74,042 |
|
|
| 99,161 |
|
|
| 84,247 |
|
|
| 37,607 |
|
|
| 94,892 |
|
|
| 41,128 |
|
|
| 485,997 |
|
Special Mention |
|
| — |
|
|
| 6,963 |
|
|
| 30,626 |
|
|
| 9,022 |
|
|
| 14,091 |
|
|
| 32,470 |
|
|
| 36,767 |
|
|
| 129,939 |
|
Substandard |
|
| 259 |
|
|
| 10,358 |
|
|
| 12,399 |
|
|
| 8,446 |
|
|
| 17,948 |
|
|
| 68,450 |
|
|
| 14,936 |
|
|
| 132,796 |
|
Total |
| $ | 1,244,045 |
|
| $ | 1,546,815 |
|
| $ | 1,329,072 |
|
| $ | 559,791 |
|
| $ | 339,037 |
|
| $ | 960,154 |
|
| $ | 705,392 |
|
| $ | 6,684,306 |
|
Gross charge-offs, year ended |
| $ | 2,252 |
|
| $ | 3,017 |
|
| $ | 5,981 |
|
| $ | 6,101 |
|
| $ | 5,216 |
|
| $ | 5,034 |
|
| $ | — |
|
| $ | 27,601 |
|
(1) - Includes $8.4At March 31, 2024 and at December 31, 2023 there were no loans or leases which were risk rated Doubtful or Loss. As of March 31, 2024 and December 31, 2023, respectively, there were $51.9 million and $52.2 million of substandardterm loans classified as held for sale.that had been converted from revolving loans.
19
22
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 at September 30, 2023March 31, 2024 and December 31, 2022:2023:
September 30, 2023 |
| 2023 |
|
| 2022 |
|
| 2021 |
|
| 2020 |
|
| 2019 |
|
| Prior |
|
| Revolving |
|
| Total |
| ||||||||||||||||||||||||||||||||||||||||
March 31, 2024 |
| 2024 |
|
| 2023 |
|
| 2022 |
|
| 2021 |
|
| 2020 |
|
| Prior |
|
| Revolving |
|
| Total |
| ||||||||||||||||||||||||||||||||||||||||
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Current |
| $ | 183,302 |
|
| $ | 488,788 |
|
| $ | 578,105 |
|
| $ | 267,874 |
|
| $ | 162,622 |
|
| $ | 539,786 |
|
| $ | 17,689 |
|
| $ | 2,238,166 |
|
| $ | 50,806 |
|
| $ | 270,638 |
|
| $ | 459,995 |
|
| $ | 524,429 |
|
| $ | 276,731 |
|
| $ | 635,489 |
|
| $ | 14,124 |
|
| $ | 2,232,212 |
|
30-59 Days Past Due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,175 |
|
|
| 2,748 |
|
|
| 4,376 |
|
|
| — |
|
|
| 11,299 |
|
|
| — |
|
|
| 442 |
|
|
| 1,043 |
|
|
| 3,809 |
|
|
| 595 |
|
|
| 2,791 |
|
|
| — |
|
|
| 8,680 |
|
60-89 Days Past Due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 9,190 |
|
|
| 440 |
|
|
| — |
|
|
| 9,630 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Greater than 90 Accruing |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Non-accrual |
|
| — |
|
|
| 658 |
|
|
| 751 |
|
|
| 123 |
|
|
| 2,970 |
|
|
| 25,163 |
|
|
| — |
|
|
| 29,665 |
|
|
| — |
|
|
| — |
|
|
| 2,706 |
|
|
| 800 |
|
|
| 407 |
|
|
| 23,524 |
|
|
| — |
|
|
| 27,437 |
|
Total Past Due |
|
| — |
|
|
| 658 |
|
|
| 751 |
|
|
| 4,298 |
|
|
| 14,908 |
|
|
| 29,979 |
|
|
| — |
|
|
| 50,594 |
|
|
| — |
|
|
| 442 |
|
|
| 3,749 |
|
|
| 4,609 |
|
|
| 1,002 |
|
|
| 26,315 |
|
|
| — |
|
|
| 36,117 |
|
Total |
| $ | 183,302 |
|
| $ | 489,446 |
|
| $ | 578,856 |
|
| $ | 272,172 |
|
| $ | 177,530 |
|
| $ | 569,765 |
|
| $ | 17,689 |
|
| $ | 2,288,760 |
|
| $ | 50,806 |
|
| $ | 271,080 |
|
| $ | 463,744 |
|
| $ | 529,038 |
|
| $ | 277,733 |
|
| $ | 661,804 |
|
| $ | 14,124 |
|
| $ | 2,268,329 |
|
Residential Real Estate |
|
|
|
|
|
|
|
|
| �� |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Current |
| $ | 46,819 |
|
| $ | 141,217 |
|
| $ | 104,776 |
|
| $ | 76,635 |
|
| $ | 45,494 |
|
| $ | 242,113 |
|
| $ | 59,628 |
|
| $ | 716,682 |
|
| $ | 6,995 |
|
| $ | 49,973 |
|
| $ | 140,035 |
|
| $ | 119,107 |
|
| $ | 72,402 |
|
| $ | 276,374 |
|
| $ | 59,007 |
|
| $ | 723,893 |
|
30-59 Days Past Due |
|
| — |
|
|
| 183 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 70 |
|
|
| 800 |
|
|
| 1,053 |
|
|
| — |
|
|
| — |
|
|
| 489 |
|
|
| 406 |
|
|
| 174 |
|
|
| 578 |
|
|
| 350 |
|
|
| 1,997 |
|
60-89 Days Past Due |
|
| — |
|
|
| — |
|
|
| 108 |
|
|
| — |
|
|
| — |
|
|
| 2,799 |
|
|
| 81 |
|
|
| 2,988 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 461 |
|
|
| — |
|
|
| 461 |
|
Greater than 90 Accruing |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Non-accrual |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 193 |
|
|
| 358 |
|
|
| 758 |
|
|
| — |
|
|
| 1,309 |
|
|
| — |
|
|
| — |
|
|
| 29 |
|
|
| 105 |
|
|
| 1,066 |
|
|
| 4,514 |
|
|
| 946 |
|
|
| 6,660 |
|
Total Past Due |
|
| — |
|
|
| 183 |
|
|
| 108 |
|
|
| 193 |
|
|
| 358 |
|
|
| 3,627 |
|
|
| 881 |
|
|
| 5,350 |
|
|
| — |
|
|
| — |
|
|
| 518 |
|
|
| 511 |
|
|
| 1,240 |
|
|
| 5,553 |
|
|
| 1,296 |
|
|
| 9,118 |
|
Total |
| $ | 46,819 |
|
| $ | 141,400 |
|
| $ | 104,884 |
|
| $ | 76,828 |
|
| $ | 45,852 |
|
| $ | 245,740 |
|
| $ | 60,509 |
|
| $ | 722,032 |
|
| $ | 6,995 |
|
| $ | 49,973 |
|
| $ | 140,553 |
|
| $ | 119,618 |
|
| $ | 73,642 |
|
| $ | 281,927 |
|
| $ | 60,303 |
|
| $ | 733,011 |
|
Construction, Land Development, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Current |
| $ | 47,922 |
|
| $ | 133,322 |
|
| $ | 204,099 |
|
| $ | 71,928 |
|
| $ | 26,598 |
|
| $ | 26,763 |
|
| $ | 11,557 |
|
| $ | 522,189 |
|
| $ | — |
|
| $ | 115,463 |
|
| $ | 139,197 |
|
| $ | 213,399 |
|
| $ | 45,846 |
|
| $ | 14,236 |
|
| $ | 826 |
|
| $ | 528,967 |
|
30-59 Days Past Due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
60-89 Days Past Due |
|
| — |
|
|
| — |
|
|
| 819 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 819 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Greater than 90 Accruing |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Non-accrual |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total Past Due |
|
| — |
|
|
| — |
|
|
| 819 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 819 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total |
| $ | 47,922 |
|
| $ | 133,322 |
|
| $ | 204,918 |
|
| $ | 71,928 |
|
| $ | 26,598 |
|
| $ | 26,763 |
|
| $ | 11,557 |
|
| $ | 523,008 |
|
| $ | — |
|
| $ | 115,463 |
|
| $ | 139,197 |
|
| $ | 213,399 |
|
| $ | 45,846 |
|
| $ | 14,236 |
|
| $ | 826 |
|
| $ | 528,967 |
|
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Current |
| $ | 423,769 |
|
| $ | 560,141 |
|
| $ | 358,522 |
|
| $ | 145,702 |
|
| $ | 93,658 |
|
| $ | 200,354 |
|
| $ | 625,142 |
|
| $ | 2,407,288 |
|
| $ | 127,342 |
|
| $ | 525,182 |
|
| $ | 530,704 |
|
| $ | 346,250 |
|
| $ | 108,120 |
|
| $ | 238,084 |
|
| $ | 632,383 |
|
| $ | 2,508,065 |
|
30-59 Days Past Due |
|
| — |
|
|
| 1,815 |
|
|
| 2 |
|
|
| 25 |
|
|
| 960 |
|
|
| 9 |
|
|
| — |
|
|
| 2,811 |
|
|
| — |
|
|
| 3,246 |
|
|
| 1,697 |
|
|
| 903 |
|
|
| 1,454 |
|
|
| 3,729 |
|
|
| 576 |
|
|
| 11,605 |
|
60-89 Days Past Due |
|
| — |
|
|
| 185 |
|
|
| 7 |
|
|
| 163 |
|
|
| 3,269 |
|
|
| 505 |
|
|
| 150 |
|
|
| 4,279 |
|
|
| — |
|
|
| 127 |
|
|
| 1 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 128 |
|
Greater than 90 Accruing |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Non-accrual |
|
| 999 |
|
|
| 3,758 |
|
|
| 5,695 |
|
|
| 5,109 |
|
|
| 1,305 |
|
|
| 2,448 |
|
|
| 633 |
|
|
| 19,947 |
|
|
| — |
|
|
| 413 |
|
|
| 7,552 |
|
|
| 2,314 |
|
|
| 4,289 |
|
|
| 16,178 |
|
|
| 2,181 |
|
|
| 32,927 |
|
Total Past Due |
|
| 999 |
|
|
| 5,758 |
|
|
| 5,704 |
|
|
| 5,297 |
|
|
| 5,534 |
|
|
| 2,962 |
|
|
| 783 |
|
|
| 27,037 |
|
|
| — |
|
|
| 3,786 |
|
|
| 9,250 |
|
|
| 3,217 |
|
|
| 5,743 |
|
|
| 19,907 |
|
|
| 2,757 |
|
|
| 44,660 |
|
Total |
| $ | 424,768 |
|
| $ | 565,899 |
|
| $ | 364,226 |
|
| $ | 150,999 |
|
| $ | 99,192 |
|
| $ | 203,316 |
|
| $ | 625,925 |
|
| $ | 2,434,325 |
|
| $ | 127,342 |
|
| $ | 528,968 |
|
| $ | 539,954 |
|
| $ | 349,467 |
|
| $ | 113,863 |
|
| $ | 257,991 |
|
| $ | 635,140 |
|
| $ | 2,552,725 |
|
Installment and Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Current |
| $ | 562 |
|
| $ | 147 |
|
| $ | 114 |
|
| $ | 136 |
|
| $ | 43 |
|
| $ | 440 |
|
| $ | 1,804 |
|
| $ | 3,246 |
|
| $ | 145 |
|
| $ | 408 |
|
| $ | 116 |
|
| $ | 56 |
|
| $ | 130 |
|
| $ | 430 |
|
| $ | 1,831 |
|
| $ | 3,116 |
|
30-59 Days Past Due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 23 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 23 |
|
60-89 Days Past Due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Greater than 90 Accruing |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Non-accrual |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total Past Due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 23 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 23 |
|
Total |
| $ | 562 |
|
| $ | 147 |
|
| $ | 114 |
|
| $ | 136 |
|
| $ | 43 |
|
| $ | 440 |
|
| $ | 1,804 |
|
| $ | 3,246 |
|
| $ | 145 |
|
| $ | 408 |
|
| $ | 116 |
|
| $ | 79 |
|
| $ | 130 |
|
| $ | 430 |
|
| $ | 1,831 |
|
| $ | 3,139 |
|
Lease Financing Receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Current |
| $ | 258,049 |
|
| $ | 227,679 |
|
| $ | 107,157 |
|
| $ | 34,515 |
|
| $ | 7,466 |
|
| $ | 1,859 |
|
| $ | — |
|
| $ | 636,725 |
|
| $ | 87,703 |
|
| $ | 301,476 |
|
| $ | 185,879 |
|
| $ | 81,572 |
|
| $ | 24,672 |
|
| $ | 4,138 |
|
| $ | — |
|
| $ | 685,440 |
|
30-59 Days Past Due |
|
| 1,872 |
|
|
| 781 |
|
|
| 177 |
|
|
| 166 |
|
|
| 16 |
|
|
| 18 |
|
|
| — |
|
|
| 3,030 |
|
|
| 45 |
|
|
| 1,602 |
|
|
| 577 |
|
|
| 789 |
|
|
| 206 |
|
|
| 71 |
|
|
| — |
|
|
| 3,290 |
|
60-89 Days Past Due |
|
| 669 |
|
|
| 225 |
|
|
| 123 |
|
|
| 8 |
|
|
| 2 |
|
|
| 1 |
|
|
| — |
|
|
| 1,028 |
|
|
| — |
|
|
| 528 |
|
|
| 1,512 |
|
|
| 251 |
|
|
| 108 |
|
|
| 39 |
|
|
| — |
|
|
| 2,438 |
|
Greater than 90 Accruing |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Non-accrual |
|
| — |
|
|
| 568 |
|
|
| 507 |
|
|
| 74 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,149 |
|
|
| — |
|
|
| 173 |
|
|
| 141 |
|
|
| 523 |
|
|
| 35 |
|
|
| 3 |
|
|
| — |
|
|
| 875 |
|
Total Past Due |
|
| 2,541 |
|
|
| 1,574 |
|
|
| 807 |
|
|
| 248 |
|
|
| 18 |
|
|
| 19 |
|
|
| — |
|
|
| 5,207 |
|
|
| 45 |
|
|
| 2,303 |
|
|
| 2,230 |
|
|
| 1,563 |
|
|
| 349 |
|
|
| 113 |
|
|
| — |
|
|
| 6,603 |
|
Total |
| $ | 260,590 |
|
| $ | 229,253 |
|
| $ | 107,964 |
|
| $ | 34,763 |
|
| $ | 7,484 |
|
| $ | 1,878 |
|
| $ | — |
|
| $ | 641,932 |
|
| $ | 87,748 |
|
| $ | 303,779 |
|
| $ | 188,109 |
|
| $ | 83,135 |
|
| $ | 25,021 |
|
| $ | 4,251 |
|
| $ | — |
|
| $ | 692,043 |
|
Total Loans and Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Current |
| $ | 960,423 |
|
| $ | 1,551,294 |
|
| $ | 1,352,773 |
|
| $ | 596,790 |
|
| $ | 335,881 |
|
| $ | 1,011,315 |
|
| $ | 715,820 |
|
| $ | 6,524,296 |
|
| $ | 272,991 |
|
| $ | 1,263,140 |
|
| $ | 1,455,926 |
|
| $ | 1,284,813 |
|
| $ | 527,901 |
|
| $ | 1,168,751 |
|
| $ | 708,171 |
|
| $ | 6,681,693 |
|
30-59 Days Past Due |
|
| 1,872 |
|
|
| 2,779 |
|
|
| 179 |
|
|
| 4,366 |
|
|
| 3,724 |
|
|
| 4,473 |
|
|
| 800 |
|
|
| 18,193 |
|
|
| 45 |
|
|
| 5,290 |
|
|
| 3,806 |
|
|
| 5,930 |
|
|
| 2,429 |
|
|
| 7,169 |
|
|
| 926 |
|
|
| 25,595 |
|
60-89 Days Past Due |
|
| 669 |
|
|
| 410 |
|
|
| 1,057 |
|
|
| 171 |
|
|
| 12,461 |
|
|
| 3,745 |
|
|
| 231 |
|
|
| 18,744 |
|
|
| — |
|
|
| 655 |
|
|
| 1,513 |
|
|
| 251 |
|
|
| 108 |
|
|
| 500 |
|
|
| — |
|
|
| 3,027 |
|
Greater than 90 Accruing |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Non-accrual |
|
| 999 |
|
|
| 4,984 |
|
|
| 6,953 |
|
|
| 5,499 |
|
|
| 4,633 |
|
|
| 28,369 |
|
|
| 633 |
|
|
| 52,070 |
|
|
| — |
|
|
| 586 |
|
|
| 10,428 |
|
|
| 3,742 |
|
|
| 5,797 |
|
|
| 44,219 |
|
|
| 3,127 |
|
|
| 67,899 |
|
Total Past Due |
|
| 3,540 |
|
|
| 8,173 |
|
|
| 8,189 |
|
|
| 10,036 |
|
|
| 20,818 |
|
|
| 36,587 |
|
|
| 1,664 |
|
|
| 89,007 |
|
|
| 45 |
|
|
| 6,531 |
|
|
| 15,747 |
|
|
| 9,923 |
|
|
| 8,334 |
|
|
| 51,888 |
|
|
| 4,053 |
|
|
| 96,521 |
|
Total |
| $ | 963,963 |
|
| $ | 1,559,467 |
|
| $ | 1,360,962 |
|
| $ | 606,826 |
|
| $ | 356,699 |
|
| $ | 1,047,902 |
|
| $ | 717,484 |
|
| $ | 6,613,303 |
|
| $ | 273,036 |
|
| $ | 1,269,671 |
|
| $ | 1,471,673 |
|
| $ | 1,294,736 |
|
| $ | 536,235 |
|
| $ | 1,220,639 |
|
| $ | 712,224 |
|
| $ | 6,778,214 |
|
2320
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
Total non-accrual loans without an allowance included $2.2$8.4 million of commercial real estate loans, $3.6 million of residential real estate, and $657,000$3.4 million of commercial and industrial loans as of September 30, 2023.March 31, 2024. The Company recognized $2.8 million$255,000 of interest income on non-accrual loans and leases for the ninethree months ended September 30, 2023.March 31, 2024.
December 31, 2022 |
| 2022 |
|
| 2021 |
|
| 2020 |
|
| 2019 |
|
| 2018 |
|
| Prior |
|
| Revolving |
|
| Total |
| ||||||||||||||||||||||||||||||||||||||||
December 31, 2023 |
| 2023 |
|
| 2022 |
|
| 2021 |
|
| 2020 |
|
| 2019 |
|
| Prior |
|
| Revolving |
|
| Total |
| ||||||||||||||||||||||||||||||||||||||||
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Current |
| $ | 477,334 |
|
| $ | 525,048 |
|
| $ | 229,260 |
|
| $ | 132,067 |
|
| $ | 112,126 |
|
| $ | 387,349 |
|
| $ | 28,343 |
|
| $ | 1,891,527 |
|
| $ | 259,998 |
|
| $ | 474,878 |
|
| $ | 558,236 |
|
| $ | 279,098 |
|
| $ | 178,729 |
|
| $ | 501,620 |
|
| $ | 29,189 |
|
| $ | 2,281,748 |
|
30-59 Days Past Due |
|
| 97 |
|
|
| 54 |
|
|
| — |
|
|
| — |
|
|
| 471 |
|
|
| 2,060 |
|
|
| — |
|
|
| 2,682 |
|
|
| 359 |
|
|
| 648 |
|
|
| 638 |
|
|
| 74 |
|
|
| 3,176 |
|
|
| 484 |
|
|
| — |
|
|
| 5,379 |
|
60-89 Days Past Due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,016 |
|
|
| — |
|
|
| 1,016 |
|
|
| — |
|
|
| 826 |
|
|
| — |
|
|
| 286 |
|
|
| — |
|
|
| 1,208 |
|
|
| — |
|
|
| 2,320 |
|
Greater than 90 Accruing |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Non-accrual |
|
| — |
|
|
| 60 |
|
|
| 124 |
|
|
| 4,846 |
|
|
| 2,971 |
|
|
| 11,298 |
|
|
| — |
|
|
| 19,299 |
|
|
| — |
|
|
| 1,556 |
|
|
| 751 |
|
|
| 697 |
|
|
| 1,976 |
|
|
| 25,885 |
|
|
| — |
|
|
| 30,865 |
|
Total Past Due |
|
| 97 |
|
|
| 114 |
|
|
| 124 |
|
|
| 4,846 |
|
|
| 3,442 |
|
|
| 14,374 |
|
|
| — |
|
|
| 22,997 |
|
|
| 359 |
|
|
| 3,030 |
|
|
| 1,389 |
|
|
| 1,057 |
|
|
| 5,152 |
|
|
| 27,577 |
|
|
| — |
|
|
| 38,564 |
|
Total |
| $ | 477,431 |
|
| $ | 525,162 |
|
| $ | 229,384 |
|
| $ | 136,913 |
|
| $ | 115,568 |
|
| $ | 401,723 |
|
| $ | 28,343 |
|
| $ | 1,914,524 |
|
| $ | 260,357 |
|
| $ | 477,908 |
|
| $ | 559,625 |
|
| $ | 280,155 |
|
| $ | 183,881 |
|
| $ | 529,197 |
|
| $ | 29,189 |
|
| $ | 2,320,312 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||
Residential Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Current |
| $ | 68,752 |
|
| $ | 59,075 |
|
| $ | 40,731 |
|
| $ | 32,440 |
|
| $ | 52,950 |
|
| $ | 180,128 |
|
| $ | 52,146 |
|
| $ | 486,222 |
|
| $ | 55,178 |
|
| $ | 136,448 |
|
| $ | 102,973 |
|
| $ | 75,125 |
|
| $ | 45,050 |
|
| $ | 230,102 |
|
| $ | 59,476 |
|
| $ | 704,352 |
|
30-59 Days Past Due |
|
| — |
|
|
| — |
|
|
| 2,497 |
|
|
| — |
|
|
| — |
|
|
| 108 |
|
|
| 122 |
|
|
| 2,727 |
|
|
| — |
|
|
| 3,840 |
|
|
| 1,032 |
|
|
| 537 |
|
|
| 29 |
|
|
| 4,122 |
|
|
| 399 |
|
|
| 9,959 |
|
60-89 Days Past Due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 21 |
|
|
| 127 |
|
|
| — |
|
|
| 148 |
|
Greater than 90 Accruing |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Non-accrual |
|
| — |
|
|
| — |
|
|
| 234 |
|
|
| 381 |
|
|
| 296 |
|
|
| 2,130 |
|
|
| 600 |
|
|
| 3,641 |
|
|
| — |
|
|
| — |
|
|
| 107 |
|
|
| 189 |
|
|
| 349 |
|
|
| 3,474 |
|
|
| 952 |
|
|
| 5,071 |
|
Total Past Due |
|
| — |
|
|
| — |
|
|
| 2,731 |
|
|
| 381 |
|
|
| 296 |
|
|
| 2,238 |
|
|
| 722 |
|
|
| 6,368 |
|
|
| — |
|
|
| 3,840 |
|
|
| 1,139 |
|
|
| 726 |
|
|
| 399 |
|
|
| 7,723 |
|
|
| 1,351 |
|
|
| 15,178 |
|
Total |
| $ | 68,752 |
|
| $ | 59,075 |
|
| $ | 43,462 |
|
| $ | 32,821 |
|
| $ | 53,246 |
|
| $ | 182,366 |
|
| $ | 52,868 |
|
| $ | 492,590 |
|
| $ | 55,178 |
|
| $ | 140,288 |
|
| $ | 104,112 |
|
| $ | 75,851 |
|
| $ | 45,449 |
|
| $ | 237,825 |
|
| $ | 60,827 |
|
| $ | 719,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||
Construction, Land Development, & Land |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Current |
| $ | 62,310 |
|
| $ | 203,672 |
|
| $ | 63,740 |
|
| $ | 33,128 |
|
| $ | 34,700 |
|
| $ | 41,250 |
|
| $ | 185 |
|
| $ | 438,985 |
|
| $ | 83,841 |
|
| $ | 156,815 |
|
| $ | 215,136 |
|
| $ | 54,182 |
|
| $ | 12,897 |
|
| $ | 1,443 |
|
| $ | 174 |
|
| $ | 524,488 |
|
30-59 Days Past Due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
60-89 Days Past Due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,349 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,349 |
|
Greater than 90 Accruing |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Non-accrual |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4 |
|
|
| — |
|
|
| 4 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total Past Due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4 |
|
|
| — |
|
|
| 4 |
|
|
| — |
|
|
| 2,349 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,349 |
|
Total |
| $ | 62,310 |
|
| $ | 203,672 |
|
| $ | 63,740 |
|
| $ | 33,128 |
|
| $ | 34,700 |
|
| $ | 41,254 |
|
| $ | 185 |
|
| $ | 438,989 |
|
| $ | 83,841 |
|
| $ | 159,164 |
|
| $ | 215,136 |
|
| $ | 54,182 |
|
| $ | 12,897 |
|
| $ | 1,443 |
|
| $ | 174 |
|
| $ | 526,837 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Current |
| $ | 524,341 |
|
| $ | 339,915 |
|
| $ | 156,713 |
|
| $ | 113,350 |
|
| $ | 122,523 |
|
| $ | 153,039 |
|
| $ | 628,747 |
|
| $ | 2,038,628 |
|
| $ | 516,747 |
|
| $ | 552,251 |
|
| $ | 351,534 |
|
| $ | 114,859 |
|
| $ | 83,780 |
|
| $ | 177,239 |
|
| $ | 611,766 |
|
| $ | 2,408,176 |
|
30-59 Days Past Due |
|
| 980 |
|
|
| 1,371 |
|
|
| 391 |
|
|
| 1,717 |
|
|
| 368 |
|
|
| 922 |
|
|
| — |
|
|
| 5,749 |
|
|
| — |
|
|
| 1,545 |
|
|
| 1,099 |
|
|
| 238 |
|
|
| 2,513 |
|
|
| 400 |
|
|
| 455 |
|
|
| 6,250 |
|
60-89 Days Past Due |
|
| — |
|
|
| 8 |
|
|
| 80 |
|
|
| 87 |
|
|
| — |
|
|
| 472 |
|
|
| — |
|
|
| 647 |
|
|
| — |
|
|
| 1,505 |
|
|
| — |
|
|
| 234 |
|
|
| 3,416 |
|
|
| 1,139 |
|
|
| 496 |
|
|
| 6,790 |
|
Greater than 90 Accruing |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Non-accrual |
|
| 1,156 |
|
|
| 1,089 |
|
|
| 3,376 |
|
|
| 2,725 |
|
|
| 1,167 |
|
|
| 2,447 |
|
|
| 861 |
|
|
| 12,821 |
|
|
| — |
|
|
| 6,177 |
|
|
| 2,828 |
|
|
| 4,546 |
|
|
| 1,529 |
|
|
| 11,594 |
|
|
| 671 |
|
|
| 27,345 |
|
Total Past Due |
|
| 2,136 |
|
|
| 2,468 |
|
|
| 3,847 |
|
|
| 4,529 |
|
|
| 1,535 |
|
|
| 3,841 |
|
|
| 861 |
|
|
| 19,217 |
|
|
| — |
|
|
| 9,227 |
|
|
| 3,927 |
|
|
| 5,018 |
|
|
| 7,458 |
|
|
| 13,133 |
|
|
| 1,622 |
|
|
| 40,385 |
|
Total |
| $ | 526,477 |
|
| $ | 342,383 |
|
| $ | 160,560 |
|
| $ | 117,879 |
|
| $ | 124,058 |
|
| $ | 156,880 |
|
| $ | 629,608 |
|
| $ | 2,057,845 |
|
| $ | 516,747 |
|
| $ | 561,478 |
|
| $ | 355,461 |
|
| $ | 119,877 |
|
| $ | 91,238 |
|
| $ | 190,372 |
|
| $ | 613,388 |
|
| $ | 2,448,561 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||
Installment and Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Current |
| $ | 366 |
|
| $ | 146 |
|
| $ | 65 |
|
| $ | 79 |
|
| $ | 17 |
|
| $ | 657 |
|
| $ | 429 |
|
| $ | 1,759 |
|
| $ | 564 |
|
| $ | 132 |
|
| $ | 104 |
|
| $ | 133 |
|
| $ | 28 |
|
| $ | 425 |
|
| $ | 1,814 |
|
| $ | 3,200 |
|
30-59 Days Past Due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
60-89 Days Past Due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Greater than 90 Accruing |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Non-accrual |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total Past Due |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total |
| $ | 366 |
|
| $ | 146 |
|
| $ | 65 |
|
| $ | 79 |
|
| $ | 17 |
|
| $ | 657 |
|
| $ | 429 |
|
| $ | 1,759 |
|
| $ | 564 |
|
| $ | 132 |
|
| $ | 104 |
|
| $ | 133 |
|
| $ | 28 |
|
| $ | 425 |
|
| $ | 1,814 |
|
| $ | 3,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||
Lease Financing Receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Current |
| $ | 294,948 |
|
| $ | 149,642 |
|
| $ | 53,680 |
|
| $ | 14,557 |
|
| $ | 7,411 |
|
| $ | 955 |
|
| $ | — |
|
| $ | 521,193 |
|
| $ | 325,833 |
|
| $ | 206,800 |
|
| $ | 93,795 |
|
| $ | 29,292 |
|
| $ | 5,537 |
|
| $ | 889 |
|
| $ | — |
|
| $ | 662,146 |
|
30-59 Days Past Due |
|
| 1,461 |
|
|
| 467 |
|
|
| 295 |
|
|
| 104 |
|
|
| 77 |
|
|
| 2 |
|
|
| — |
|
|
| 2,406 |
|
|
| 726 |
|
|
| 426 |
|
|
| 153 |
|
|
| 38 |
|
|
| 4 |
|
|
| 2 |
|
|
| — |
|
|
| 1,349 |
|
60-89 Days Past Due |
|
| 79 |
|
|
| 39 |
|
|
| — |
|
|
| — |
|
|
| 9 |
|
|
| — |
|
|
| — |
|
|
| 127 |
|
|
| 540 |
|
|
| 481 |
|
|
| 302 |
|
|
| 218 |
|
|
| 3 |
|
|
| 1 |
|
|
| — |
|
|
| 1,545 |
|
Greater than 90 Accruing |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Non-accrual |
|
| 35 |
|
|
| 82 |
|
|
| 63 |
|
|
| 76 |
|
|
| 4 |
|
|
| — |
|
|
| — |
|
|
| 260 |
|
|
| 259 |
|
|
| 138 |
|
|
| 384 |
|
|
| 45 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 826 |
|
Total Past Due |
|
| 1,575 |
|
|
| 588 |
|
|
| 358 |
|
|
| 180 |
|
|
| 90 |
|
|
| 2 |
|
|
| — |
|
|
| 2,793 |
|
|
| 1,525 |
|
|
| 1,045 |
|
|
| 839 |
|
|
| 301 |
|
|
| 7 |
|
|
| 3 |
|
|
| — |
|
|
| 3,720 |
|
Total |
| $ | 296,523 |
|
| $ | 150,230 |
|
| $ | 54,038 |
|
| $ | 14,737 |
|
| $ | 7,501 |
|
| $ | 957 |
|
| $ | — |
|
| $ | 523,986 |
|
| $ | 327,358 |
|
| $ | 207,845 |
|
| $ | 94,634 |
|
| $ | 29,593 |
|
| $ | 5,544 |
|
| $ | 892 |
|
| $ | — |
|
| $ | 665,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||
Total Loans and Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Current |
| $ | 1,428,051 |
|
| $ | 1,277,498 |
|
| $ | 544,189 |
|
| $ | 325,621 |
|
| $ | 329,727 |
|
| $ | 763,378 |
|
| $ | 709,850 |
|
| $ | 5,378,314 |
|
| $ | 1,242,161 |
|
| $ | 1,527,324 |
|
| $ | 1,321,778 |
|
| $ | 552,689 |
|
| $ | 326,021 |
|
| $ | 911,718 |
|
| $ | 702,419 |
|
| $ | 6,584,110 |
|
30-59 Days Past Due |
|
| 2,538 |
|
|
| 1,892 |
|
|
| 3,183 |
|
|
| 1,821 |
|
|
| 916 |
|
|
| 3,092 |
|
|
| 122 |
|
|
| 13,564 |
|
|
| 1,085 |
|
|
| 6,459 |
|
|
| 2,922 |
|
|
| 887 |
|
|
| 5,722 |
|
|
| 5,008 |
|
|
| 854 |
|
|
| 22,937 |
|
60-89 Days Past Due |
|
| 79 |
|
|
| 47 |
|
|
| 80 |
|
|
| 87 |
|
|
| 9 |
|
|
| 1,488 |
|
|
| — |
|
|
| 1,790 |
|
|
| 540 |
|
|
| 5,161 |
|
|
| 302 |
|
|
| 738 |
|
|
| 3,440 |
|
|
| 2,475 |
|
|
| 496 |
|
|
| 13,152 |
|
Greater than 90 Accruing |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Non-accrual |
|
| 1,191 |
|
|
| 1,231 |
|
|
| 3,797 |
|
|
| 8,028 |
|
|
| 4,438 |
|
|
| 15,879 |
|
|
| 1,461 |
|
|
| 36,025 |
|
|
| 259 |
|
|
| 7,871 |
|
|
| 4,070 |
|
|
| 5,477 |
|
|
| 3,854 |
|
|
| 40,953 |
|
|
| 1,623 |
|
|
| 64,107 |
|
Total Past Due |
|
| 3,808 |
|
|
| 3,170 |
|
|
| 7,060 |
|
|
| 9,936 |
|
|
| 5,363 |
|
|
| 20,459 |
|
|
| 1,583 |
|
|
| 51,379 |
|
|
| 1,884 |
|
|
| 19,491 |
|
|
| 7,294 |
|
|
| 7,102 |
|
|
| 13,016 |
|
|
| 48,436 |
|
|
| 2,973 |
|
|
| 100,196 |
|
Total |
| $ | 1,431,859 |
|
| $ | 1,280,668 |
|
| $ | 551,249 |
|
| $ | 335,557 |
|
| $ | 335,090 |
|
| $ | 783,837 |
|
| $ | 711,433 |
|
| $ | 5,429,693 |
|
| $ | 1,244,045 |
|
| $ | 1,546,815 |
|
| $ | 1,329,072 |
|
| $ | 559,791 |
|
| $ | 339,037 |
|
| $ | 960,154 |
|
| $ | 705,392 |
|
| $ | 6,684,306 |
|
(1) - Includes $8.4 million of substandard loans classified as held for sale.
21
24
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
Total non-accrual loans without an allowance included $10.8$1.6 million of commercial real estate loans, $4.3$3.6 million of residential real estate loans, and $2.3 million of commercial and industrial loans, and $2.6 million of residential real estate loans, as of December 31, 2022.2023. The Company recognized $2.5 million$970,000 of interest income on non-accrual loans and leases for the yearthree months ended DecemberMarch 31, 2022.2023.
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 three and nine months ended September 30, 2023March 31, 2024 are as follows:
September 30, 2023 |
| Commercial |
|
| Residential |
|
| Construction, |
|
| Commercial |
|
| Installment |
|
| Lease |
|
| Total |
| |||||||||||||||||||||||||||||||||||
March 31, 2024 |
| Commercial |
|
| Residential |
|
| Construction, |
|
| Commercial |
|
| Installment |
|
| Lease |
|
| Total |
| |||||||||||||||||||||||||||||||||||
Allowance for credit losses - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Three months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Beginning balance |
| $ | 26,377 |
|
| $ | 2,544 |
|
| $ | 1,935 |
|
| $ | 53,640 |
|
| $ | 43 |
|
| $ | 8,126 |
|
| $ | 92,665 |
|
| $ | 33,237 |
|
| $ | 3,495 |
|
| $ | 2,906 |
|
| $ | 53,782 |
|
| $ | 36 |
|
| $ | 8,230 |
|
| $ | 101,686 |
|
Adjustment for acquired PCD loans |
|
| 8,230 |
|
|
| 660 |
|
|
| 97 |
|
|
| 1,609 |
|
|
| — |
|
|
| — |
|
|
| 10,596 |
| ||||||||||||||||||||||||||||
Provision/(recapture) |
|
| 1,614 |
|
|
| 941 |
|
|
| 1,168 |
|
|
| 3,329 |
|
|
| 4 |
|
|
| 809 |
|
|
| 7,865 |
| ||||||||||||||||||||||||||||
Charge-offs |
|
| (1,360 | ) |
|
| (12 | ) |
|
| — |
|
|
| (4,200 | ) |
|
| (3 | ) |
|
| (604 | ) |
|
| (6,179 | ) | ||||||||||||||||||||||||||||
Recoveries |
|
| 124 |
|
|
| 18 |
|
|
| — |
|
|
| 460 |
|
|
| — |
|
|
| 147 |
|
|
| 749 |
| ||||||||||||||||||||||||||||
Ending balance |
| $ | 34,985 |
|
| $ | 4,151 |
|
| $ | 3,200 |
|
| $ | 54,838 |
|
| $ | 44 |
|
| $ | 8,478 |
|
| $ | 105,696 |
| ||||||||||||||||||||||||||||
Nine months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||
Beginning balance |
| $ | 26,061 |
|
| $ | 3,140 |
|
| $ | 3,134 |
|
| $ | 41,889 |
|
| $ | 24 |
|
| $ | 7,676 |
|
| $ | 81,924 |
| ||||||||||||||||||||||||||||
Adjustment for acquired PCD loans |
|
| 8,230 |
|
|
| 660 |
|
|
| 97 |
|
|
| 1,609 |
|
|
| — |
|
|
| — |
|
|
| 10,596 |
| ||||||||||||||||||||||||||||
Provision/(recapture) |
|
| 4,854 |
|
|
| 290 |
|
|
| (31 | ) |
|
| 17,293 |
|
|
| 19 |
|
|
| 1,619 |
|
|
| 24,044 |
|
|
| 824 |
|
|
| (148 | ) |
|
| 24 |
|
|
| 5,836 |
|
|
| (3 | ) |
|
| 358 |
|
|
| 6,891 |
|
Charge-offs |
|
| (5,271 | ) |
|
| (21 | ) |
|
| — |
|
|
| (8,087 | ) |
|
| (3 | ) |
|
| (1,370 | ) |
|
| (14,752 | ) |
|
| (3,057 | ) |
|
| — |
|
|
| — |
|
|
| (3,619 | ) |
|
| — |
|
|
| (373 | ) |
|
| (7,049 | ) |
Recoveries |
|
| 1,111 |
|
|
| 82 |
|
|
| — |
|
|
| 2,134 |
|
|
| 4 |
|
|
| 553 |
|
|
| 3,884 |
|
|
| 436 |
|
|
| 1 |
|
|
| — |
|
|
| 232 |
|
|
| — |
|
|
| 169 |
|
|
| 838 |
|
Ending balance |
| $ | 34,985 |
|
| $ | 4,151 |
|
| $ | 3,200 |
|
| $ | 54,838 |
|
| $ | 44 |
|
| $ | 8,478 |
|
| $ | 105,696 |
|
| $ | 31,440 |
|
| $ | 3,348 |
|
| $ | 2,930 |
|
| $ | 56,231 |
|
| $ | 33 |
|
| $ | 8,384 |
|
| $ | 102,366 |
|
Ending balance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Individually evaluated |
| $ | 13,199 |
|
| $ | — |
|
| $ | — |
|
| $ | 15,135 |
|
| $ | — |
|
| $ | — |
|
| $ | 28,334 |
|
| $ | 8,905 |
|
| $ | — |
|
| $ | — |
|
| $ | 12,772 |
|
| $ | — |
|
| $ | — |
|
| $ | 21,677 |
|
Collectively evaluated |
|
| 21,786 |
|
|
| 4,151 |
|
|
| 3,200 |
|
|
| 39,703 |
|
|
| 44 |
|
|
| 8,478 |
|
|
| 77,362 |
|
|
| 22,535 |
|
|
| 3,348 |
|
|
| 2,930 |
|
|
| 43,459 |
|
|
| 33 |
|
|
| 8,384 |
|
|
| 80,689 |
|
Total allowance for credit |
| $ | 34,985 |
|
| $ | 4,151 |
|
| $ | 3,200 |
|
| $ | 54,838 |
|
| $ | 44 |
|
| $ | 8,478 |
|
| $ | 105,696 |
|
| $ | 31,440 |
|
| $ | 3,348 |
|
| $ | 2,930 |
|
| $ | 56,231 |
|
| $ | 33 |
|
| $ | 8,384 |
|
| $ | 102,366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Loans and leases ending balance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Individually evaluated for |
| $ | 67,596 |
|
| $ | — |
|
| $ | — |
|
| $ | 48,814 |
|
| $ | — |
|
| $ | — |
|
| $ | 116,410 |
|
| $ | 40,778 |
|
| $ | 4,658 |
|
| $ | — |
|
| $ | 39,889 |
|
| $ | — |
|
| $ | — |
|
| $ | 85,325 |
|
Collectively evaluated for |
|
| 2,221,164 |
|
|
| 722,032 |
|
|
| 523,008 |
|
|
| 2,385,511 |
|
|
| 3,246 |
|
|
| 641,932 |
|
|
| 6,496,893 |
|
|
| 2,227,551 |
|
|
| 728,353 |
|
|
| 528,967 |
|
|
| 2,512,836 |
|
|
| 3,139 |
|
|
| 692,043 |
|
|
| 6,692,889 |
|
Total loans and leases |
| $ | 2,288,760 |
|
| $ | 722,032 |
|
| $ | 523,008 |
|
| $ | 2,434,325 |
|
| $ | 3,246 |
|
| $ | 641,932 |
|
| $ | 6,613,303 |
|
| $ | 2,268,329 |
|
| $ | 733,011 |
|
| $ | 528,967 |
|
| $ | 2,552,725 |
|
| $ | 3,139 |
|
| $ | 692,043 |
|
| $ | 6,778,214 |
|
2522
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
The allowance for credit losses increased $10.6 million for the three and nine months end September 30, 2023 due to an acquisition adjustment on PCD loans related to the Inland transaction. For the same periods, a provision for credit losses of $2.7 million was recorded for acquired non-credit deteriorated loans related to the Inland acquisition.
The following table summarize the balance and activity within the allowance for loancredit losses - loans and lease losses,leases, the components of the allowance for loancredit losses - loans and lease lossesleases 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 three and nine months ended September 30, 2022:March 31, 2023:
September 30, 2022 |
| Commercial |
|
| Residential |
|
| Construction, |
|
| Commercial |
|
| Installment |
|
| Lease |
|
| Total |
| |||||||||||||||||||||||||||||||||||
Allowance for loan and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||
March 31, 2023 |
| Commercial |
|
| Residential |
|
| Construction, |
|
| Commercial |
|
| Installment |
|
| Lease |
|
| Total |
| |||||||||||||||||||||||||||||||||||
Allowance for credit losses - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||
Three months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Beginning balance |
| $ | 19,818 |
|
| $ | 2,489 |
|
| $ | 1,792 |
|
| $ | 34,735 |
|
| $ | 11 |
|
| $ | 3,591 |
|
| $ | 62,436 |
|
| $ | 26,061 |
|
| $ | 3,140 |
|
| $ | 3,134 |
|
| $ | 41,889 |
|
| $ | 24 |
|
| $ | 7,676 |
|
| $ | 81,924 |
|
Provision |
|
| 1,115 |
|
|
| 204 |
|
|
| 553 |
|
|
| 2,040 |
|
|
| 2 |
|
|
| 262 |
|
|
| 4,176 |
| ||||||||||||||||||||||||||||
Charge-offs |
|
| (1,102 | ) |
|
| (17 | ) |
|
| — |
|
|
| (1,184 | ) |
|
| (3 | ) |
|
| (416 | ) |
|
| (2,722 | ) | ||||||||||||||||||||||||||||
Recoveries |
|
| 219 |
|
|
| 5 |
|
|
| — |
|
|
| 161 |
|
|
| — |
|
|
| 380 |
|
|
| 765 |
| ||||||||||||||||||||||||||||
Ending balance |
| $ | 20,050 |
|
| $ | 2,681 |
|
| $ | 2,345 |
|
| $ | 35,752 |
|
| $ | 10 |
|
| $ | 3,817 |
|
| $ | 64,655 |
| ||||||||||||||||||||||||||||
Nine months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||
Beginning balance |
| $ | 16,918 |
|
| $ | 1,628 |
|
| $ | 522 |
|
| $ | 33,129 |
|
| $ | 9 |
|
| $ | 2,806 |
|
| $ | 55,012 |
| ||||||||||||||||||||||||||||
Provision |
|
| 4,465 |
|
|
| 1,056 |
|
|
| 1,823 |
|
|
| 6,350 |
|
|
| 4 |
|
|
| 1,381 |
|
|
| 15,079 |
| ||||||||||||||||||||||||||||
Provision/(recapture) |
|
| (1,119 | ) |
|
| (453 | ) |
|
| 364 |
|
|
| 10,803 |
|
|
| (2 | ) |
|
| 119 |
|
|
| 9,712 |
| ||||||||||||||||||||||||||||
Charge-offs |
|
| (1,839 | ) |
|
| (17 | ) |
|
| — |
|
|
| (4,301 | ) |
|
| (3 | ) |
|
| (1,103 | ) |
|
| (7,263 | ) |
|
| (966 | ) |
|
| (9 | ) |
|
| — |
|
|
| (1,790 | ) |
|
| — |
|
|
| (304 | ) |
|
| (3,069 | ) |
Recoveries |
|
| 506 |
|
|
| 14 |
|
|
| — |
|
|
| 574 |
|
|
| — |
|
|
| 733 |
|
|
| 1,827 |
|
|
| 762 |
|
|
| 1 |
|
|
| — |
|
|
| 947 |
|
|
| 3 |
|
|
| 185 |
|
|
| 1,898 |
|
Ending balance |
| $ | 20,050 |
|
| $ | 2,681 |
|
| $ | 2,345 |
|
| $ | 35,752 |
|
| $ | 10 |
|
| $ | 3,817 |
|
| $ | 64,655 |
|
| $ | 24,738 |
|
| $ | 2,679 |
|
| $ | 3,498 |
|
| $ | 51,849 |
|
| $ | 25 |
|
| $ | 7,676 |
|
| $ | 90,465 |
|
Ending balance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Individually evaluated |
| $ | 6,094 |
|
| $ | — |
|
| $ | — |
|
| $ | 12,584 |
|
| $ | — |
|
| $ | — |
|
| $ | 18,678 |
|
| $ | 6,302 |
|
| $ | — |
|
| $ | 1,198 |
|
| $ | 14,518 |
|
| $ | — |
|
| $ | — |
|
| $ | 22,018 |
|
Collectively evaluated |
|
| 12,631 |
|
|
| 1,831 |
|
|
| 2,247 |
|
|
| 23,089 |
|
|
| 8 |
|
|
| 3,817 |
|
|
| 43,623 |
|
|
| 18,436 |
|
|
| 2,679 |
|
|
| 2,300 |
|
|
| 37,331 |
|
|
| 25 |
|
|
| 7,676 |
|
|
| 68,447 |
|
Loans acquired with |
|
| 1,325 |
|
|
| 850 |
|
|
| 98 |
|
|
| 79 |
|
|
| 2 |
|
|
| — |
|
|
| 2,354 |
| ||||||||||||||||||||||||||||
Total allowance for loan |
| $ | 20,050 |
|
| $ | 2,681 |
|
| $ | 2,345 |
|
| $ | 35,752 |
|
| $ | 10 |
|
| $ | 3,817 |
|
| $ | 64,655 |
| ||||||||||||||||||||||||||||
Total allowance for credit losses - |
| $ | 24,738 |
|
| $ | 2,679 |
|
| $ | 3,498 |
|
| $ | 51,849 |
|
| $ | 25 |
|
| $ | 7,676 |
|
| $ | 90,465 |
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Loans and leases ending balance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Individually evaluated for |
| $ | 44,977 |
|
| $ | 4,782 |
|
| $ | 5,541 |
|
| $ | 35,979 |
|
| $ | — |
|
| $ | — |
|
| $ | 91,279 |
|
| $ | 31,622 |
|
| $ | — |
|
| $ | 5,541 |
|
| $ | 34,245 |
|
| $ | — |
|
| $ | — |
|
| $ | 71,408 |
|
Collectively evaluated for |
|
| 1,767,043 |
|
|
| 439,816 |
|
|
| 450,922 |
|
|
| 1,930,822 |
|
|
| 1,215 |
|
|
| 495,828 |
|
|
| 5,085,646 |
|
|
| 1,897,762 |
|
|
| 499,336 |
|
|
| 441,567 |
|
|
| 2,049,560 |
|
|
| 1,822 |
|
|
| 553,877 |
|
|
| 5,443,924 |
|
Loans acquired with |
|
| 56,974 |
|
|
| 37,246 |
|
|
| 1,144 |
|
|
| 3,029 |
|
|
| 153 |
|
|
| — |
|
|
| 98,546 |
| ||||||||||||||||||||||||||||
Total loans and leases |
| $ | 1,868,994 |
|
| $ | 481,844 | �� |
| $ | 457,607 |
|
| $ | 1,969,830 |
|
| $ | 1,368 |
|
| $ | 495,828 |
|
| $ | 5,275,471 |
|
| $ | 1,929,384 |
|
| $ | 499,336 |
|
| $ | 447,108 |
|
| $ | 2,083,805 |
|
| $ | 1,822 |
|
| $ | 553,877 |
|
| $ | 5,515,332 |
|
26
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 $13.0 million$680,000 and $23.8$8.5 million for the three and nine months ended September 30,March 31, 2024 and 2023, respectively, and increased the allowance for loan and lease losses by $2.2 million and $9.6 million for the three and nine months ended September 30, 2022, respectively. In 2023, a $10.6 million adjustment was made to the allowance for credit losses to account for acquired PCD loans. For loans individually evaluated for impairment, the Company increaseddecreased allowance for credit losses - loans and leases by $2.4 million and $13.0$5.6 million for the three and nine months ended September 30, 2023, respectively. The CompanyMarch 31, 2024, and increased the allowance for loans individually evaluated by $1.3$6.7 million and recaptured $2.4 million of the allowance for loan and lease losses for the three and nine months ended September 30, 2022, respectively.March 31, 2023. For loans and leases collectively evaluated for impairment, the Company increased the allowance by $10.7$6.2 million and $10.8$1.9 million for the three and nine months ended September 30, 2023. The Company increased the allowance for loanMarch 31, 2024 and lease losses by $992,000 and $12.8 million for the three and nine months ended September 30, 2022,2023, respectively. The change in allowance for credit losses - loans and leases collectively evaluated for impairment was mainly due to changes in expected losses driven by macro-economic factors, as well as growth in the loan and lease portfolio and through acquisition.
There were no borrowers receiving loan modifications during the three months ended March 31, 2024. The following table presents loans with modified terms as of September 30,March 31, 2023:
September 30, 2023 |
| Payment Delay |
|
| Term Modification |
|
| Combination Term Modification and Interest Rate Reduction |
|
| Total Modified by Class |
|
| % of Class of Loans and Leases |
| |||||||||||||||||||||||||
Modified loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
March 31, 2023 |
| Payment Delay |
|
| Term Modification |
|
| Combination Term Modification and Interest Rate Reduction |
|
| Total Modified by Class |
|
| % of Class of Loans and Leases |
| |||||||||||||||||||||||||
Commercial and industrial |
| $ | 383 |
|
| $ | 62,394 |
|
| $ | 374 |
|
| $ | 63,151 |
|
|
| 2.6 | % |
| $ | 9,405 |
|
| $ | 40,420 |
|
| $ | 395 |
|
| $ | 50,220 |
|
|
| 2.4 | % |
Total modified loans |
| $ | 383 |
|
| $ | 62,394 |
|
| $ | 374 |
|
| $ | 63,151 |
|
|
| 1.0 | % |
| $ | 9,405 |
|
| $ | 40,420 |
|
| $ | 395 |
|
| $ | 50,220 |
|
|
| 0.9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Loans reflected as having a payment delay included a general adjustment in loan terms similar to those of pass-rated credits. The weighted average term extension (in months) for the commercial and industrial loans identified above are four months and seventeen months for the three and nine months ended September 30, 2023, respectively. One commercial relationship in the amount of $383,000 has been designated non-accrual subsequent to its modification. In addition, there were no additional amounts committed to loans modified during 2023. Loans having term modifications included extension of term as a result of a new borrower structure and other miscellaneous term adjustments. Loans having a combination of term modification and interest rate reduction reflect a longer amortization period and a reduced weighted average contractual rate from 8.85%8.85% to 7.01%7.01%.
Prior to 2023, TDRs were granted due to borrower financial difficulty and provide for a modification of loan repayment terms. The tables below present TDRs by loan category as of December 31, 2022:23
December 31, 2022 |
| Number |
|
| Pre- |
|
| Post- |
|
| Charge-offs |
|
| Individually Evaluated |
| |||||
Accruing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Commercial real estate |
|
| 2 |
|
| $ | 551 |
|
| $ | 551 |
|
| $ | — |
|
| $ | 109 |
|
Commercial and industrial |
|
| 1 |
|
|
| 24 |
|
|
| 24 |
|
|
| — |
|
|
| 34 |
|
Residential real estate |
|
| 2 |
|
|
| 144 |
|
|
| 144 |
|
|
| — |
|
|
| — |
|
Total accruing |
|
| 5 |
|
|
| 719 |
|
|
| 719 |
|
|
| — |
|
|
| 143 |
|
Non-accruing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Commercial real estate |
|
| 3 |
|
|
| 830 |
|
|
| 623 |
|
|
| 207 |
|
|
| 73 |
|
Commercial and industrial |
|
| 6 |
|
|
| 2,017 |
|
|
| 982 |
|
|
| 1,035 |
|
|
| 38 |
|
Total non-accruing |
|
| 9 |
|
|
| 2,847 |
|
|
| 1,605 |
|
|
| 1,242 |
|
|
| 111 |
|
Total troubled debt restructurings |
|
| 14 |
|
| $ | 3,566 |
|
| $ | 2,324 |
|
| $ | 1,242 |
|
| $ | 254 |
|
27
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
LoansThe following table presents the amortized cost basis of loans that had a payment default as of March 31, 2024 and were modified as troubled debt restructurings that occurred duringin the three and nine months ended September 30, 2022 were:
|
| Three Months Ended |
|
| Nine Months Ended |
| ||
|
| September 30, |
|
| September 30, |
| ||
|
| 2022 |
|
| 2022 |
| ||
Accruing: |
|
|
|
|
|
| ||
Beginning balance |
| $ | 1,358 |
|
| $ | 1,927 |
|
Additions |
|
| — |
|
|
| — |
|
Net payments |
|
| (621 | ) |
|
| (1,190 | ) |
Net transfers from non-accrual |
|
| — |
|
|
| — |
|
Ending balance |
|
| 737 |
|
|
| 737 |
|
Non-accruing: |
|
|
|
|
|
| ||
Beginning balance |
|
| 1,134 |
|
|
| 1,506 |
|
Additions |
|
| 756 |
|
|
| 756 |
|
Net payments |
|
| (96 | ) |
|
| (468 | ) |
Charge-offs |
|
| (4 | ) |
|
| (4 | ) |
Net transfers to accrual |
|
| — |
|
|
| — |
|
Ending balance |
|
| 1,790 |
|
|
| 1,790 |
|
Total troubled debt restructurings |
| $ | 2,527 |
|
| $ | 2,527 |
|
There wereno troubled debt restructurings that subsequently defaulted within twelve months prior to default.
March 31, 2024 |
| Payment Delay |
|
| Term Modification |
|
| Combination Term Modification and Interest Rate Reduction |
|
| Total Modified by Class |
|
| % of Class of Loans and Leases |
| |||||
Commercial real estate |
| $ | — |
|
| $ | 2,842 |
|
| $ | — |
|
| $ | 2,842 |
|
|
| 0.13 | % |
Commercial and industrial |
|
| 43 |
|
|
| — |
|
|
| 353 |
|
|
| 396 |
|
|
| 0.02 | % |
Total loans and leases |
| $ | 43 |
|
| $ | 2,842 |
|
| $ | 353 |
|
| $ | 3,238 |
|
|
| 0.05 | % |
As of December 31, 2023, the amortized cost of commercial and industrial loans that had a payment default and were modified in the twelve months prior to default was $406,000, which represented 0.02% of outstanding commercial and industrial loans.
Modified loans are either collectively assessed based on portfolio risk segment and risk rating or individually assessed for loans exceeding $500,000. Upon the Company’s determination that a modified loan has subsequently been deemed uncollectible, the loan (or a portion of the restructure date duringloan) is written off. Therefore, the nine months ended September 30, 2022. In addition, there was no commitment outstanding on troubled debt restructurings at December 31, 2022.amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.
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 September 30, 2023March 31, 2024 and December 31, 2022:2023:
September 30, 2023 |
| Commercial Construction |
|
| Non-owner Occupied Commercial |
|
| Owner-Occupied Commercial |
|
| Multi-Family |
|
| Single Family Residence (1st Lien) |
|
| Single Family Residence (2nd Lien) |
|
| Business Assets |
|
| Total |
| ||||||||||||||||||||||||||||||||||||||||
March 31, 2024 |
| Commercial Construction |
|
| Non-owner Occupied Commercial |
|
| Owner-Occupied Commercial |
|
| Multi-Family |
|
| Single Family Residence (1st Lien) |
|
| Single Family Residence (2nd Lien) |
|
| Business Assets |
|
| Total |
| ||||||||||||||||||||||||||||||||||||||||
Commercial real estate |
| $ | — |
|
| $ | 32,338 |
|
| $ | 35,258 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 67,596 |
|
| $ | — |
|
| $ | 11,590 |
|
| $ | 29,188 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 40,778 |
|
Residential real estate |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,792 |
|
|
| 1,866 |
|
|
| — |
|
|
| — |
|
|
| 4,658 |
| ||||||||||||||||||||||||||||||||
Commercial and industrial |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 48,814 |
|
|
| 48,814 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 39,889 |
|
|
| 39,889 |
|
Total |
| $ | — |
|
| $ | 32,338 |
|
| $ | 35,258 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 48,814 |
|
| $ | 116,410 |
|
| $ | — |
|
| $ | 11,590 |
|
| $ | 29,188 |
|
| $ | 2,792 |
|
| $ | 1,866 |
|
| $ | — |
|
| $ | 39,889 |
|
| $ | 85,325 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
December 31, 2022 |
| Commercial Construction |
|
| Non-owner Occupied Commercial |
|
| Owner-Occupied Commercial |
|
| Multi-Family |
|
| Single Family Residence (1st Lien) |
|
| Single Family Residence (2nd Lien) |
|
| Business Assets |
|
| Total |
| ||||||||||||||||||||||||||||||||||||||||
December 31, 2023 |
| Commercial Construction |
|
| Non-owner Occupied Commercial |
|
| Owner-Occupied Commercial |
|
| Multi-Family |
|
| Single Family Residence (1st Lien) |
|
| Single Family Residence (2nd Lien) |
|
| Business Assets |
|
| Total |
| ||||||||||||||||||||||||||||||||||||||||
Commercial real estate |
| $ | — |
|
| $ | 9,749 |
|
| $ | 28,210 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 37,959 |
|
| $ | — |
|
| $ | 28,767 |
|
| $ | 35,572 |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 64,339 |
|
Residential real estate |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 237 |
|
|
| 422 |
|
|
| 220 |
|
|
| — |
|
|
| 879 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,793 |
|
|
| 800 |
|
|
| — |
|
|
| — |
|
|
| 3,593 |
|
Construction, land |
|
| 5,541 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 5,541 |
|
|
| 813 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 813 |
|
Commercial and industrial |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 26,034 |
|
|
| 26,034 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 44,749 |
|
|
| 44,749 |
|
Total |
| $ | 5,541 |
|
| $ | 9,749 |
|
| $ | 28,210 |
|
| $ | 237 |
|
| $ | 422 |
|
| $ | 220 |
|
| $ | 26,034 |
|
| $ | 70,413 |
|
| $ | 813 |
|
| $ | 28,767 |
|
| $ | 35,572 |
|
| $ | 2,793 |
|
| $ | 800 |
|
| $ | — |
|
| $ | 44,749 |
|
| $ | 113,494 |
|
The following table presents the change in the balance of the allowance for credit losses - unfunded commitments as of September 30, 2023March 31, 2024 and 2022:2023:
|
| For the Three Months Ended |
|
| For the Nine Months Ended |
|
| For the Three Months Ended |
|
| |||||||||||||||
|
| September 30, |
|
| September 30, |
|
| March 31, |
|
| |||||||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
|
| ||||||
Beginning balance |
| $ | 3,639 |
|
| $ | 2,191 |
|
| $ | 4,203 |
|
| $ | 1,403 |
|
| $ | 3,636 |
|
| $ | 4,203 |
|
|
Provision for unfunded commitments |
|
| 937 |
|
|
| 136 |
|
|
| 373 |
|
|
| 924 |
| |||||||||
Provision/(recapture) for unfunded commitments |
|
| (248 | ) |
|
| 113 |
|
| ||||||||||||||||
Ending balance |
| $ | 4,576 |
|
| $ | 2,327 |
|
| $ | 4,576 |
|
| $ | 2,327 |
|
| $ | 3,388 |
|
| $ | 4,316 |
|
|
2824
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 three and nine months ended September 30,March 31, 2024 and 2023 and 2022 was as follows:
|
| Three Months Ended |
|
| Nine Months Ended |
|
| Three Months Ended |
| |||||||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||||
Beginning balance |
| $ | 21,715 |
|
| $ | 22,155 |
|
| $ | 19,172 |
|
| $ | 23,744 |
|
| $ | 19,844 |
|
| $ | 19,172 |
|
Additions, net |
|
| 1,674 |
|
|
| 1,314 |
|
|
| 4,426 |
|
|
| 5,592 |
|
|
| 1,851 |
|
|
| 1,116 |
|
Changes in fair value |
|
| (3,646 | ) |
|
| (2,342 | ) |
|
| (3,855 | ) |
|
| (8,209 | ) |
|
| (703 | ) |
|
| 656 |
|
Ending balance |
| $ | 19,743 |
|
| $ | 21,127 |
|
| $ | 19,743 |
|
| $ | 21,127 |
|
| $ | 20,992 |
|
| $ | 20,944 |
|
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 September 30, 2023March 31, 2024 and December 31, 20222023 were as follows:
|
| September 30, |
| December 31, |
|
| March 31, |
| December 31, |
| ||||||
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||
Loan portfolios serviced for: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
SBA guaranteed loans |
| $ | 1,522,691 |
|
| $ | 1,521,014 |
|
| $ | 1,524,421 |
|
| $ | 1,530,401 |
|
USDA guaranteed loans |
|
| 191,382 |
|
|
| 211,150 |
|
|
| 207,701 |
|
|
| 197,942 |
|
Total |
| $ | 1,714,073 |
|
| $ | 1,732,164 |
|
| $ | 1,732,122 |
|
| $ | 1,728,343 |
|
Loan servicing revenue totaled $3.4$3.4 million for each of the three months ended September 30, 2023March 31, 2024 and 2022. Loan servicing revenue totaled $10.1 million and $10.2 million for the nine months ended September 30, 2023 and 2022, respectively.2023.
Loan servicing asset revaluation, which represents the changes in fair value of servicing assets, resulted in a downward valuation adjustment of $3.6 million$703,000 and $2.3 millionan upward valuation of $656,000 for the three months ended September 30,March 31, 2024 and 2023, and 2022, respectively. Loan servicing asset revaluation resulted in a downward valuation adjustment of $3.9 million and $8.2 million for the nine months ended September 30, 2023 and 2022, respectively.
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. The following table presents the change in otherOREO for the three months ended March 31, 2024 and 2023:
|
| Three Months Ended |
| |||||
|
| 2024 |
|
| 2023 |
| ||
Beginning balance |
| $ | 1,200 |
|
| $ | 4,717 |
|
Net additions to OREO |
|
| 5 |
|
|
| 55 |
|
Proceeds from sales of OREO |
|
| (402 | ) |
|
| (764 | ) |
Gains (losses) on sales of OREO |
|
| (18 | ) |
|
| 35 |
|
Valuation adjustments |
|
| — |
|
|
| (331 | ) |
Ending balance |
| $ | 785 |
|
| $ | 3,712 |
|
At March 31, 2024, and December 31, 2023, the balance of real estate owned (“OREO”)did not include any foreclosed residential real estate properties recorded as a result of obtaining physical possession of the property.
At March 31, 2024, and December 31, 2023, there was a $27,000 of consumer mortgage loan secured by residential real estate properties in foreclosure.
There were no internally financed sales of OREO for the three and nine months ended September 30, 2023 and 2022:March 31, 2024 or 2023.
|
| Three Months Ended |
|
| Nine Months Ended |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Beginning balance |
| $ | 2,265 |
|
| $ | 4,749 |
|
| $ | 4,717 |
|
| $ | 2,112 |
|
Net additions to OREO |
|
| 72 |
|
|
| — |
|
|
| 571 |
|
|
| 2,837 |
|
Proceeds from sales of OREO |
|
| (614 | ) |
|
| (131 | ) |
|
| (3,173 | ) |
|
| (356 | ) |
Gains (losses) on sales of OREO |
|
| (39 | ) |
|
| — |
|
|
| (88 | ) |
|
| 76 |
|
Valuation adjustments |
|
| (13 | ) |
|
| (216 | ) |
|
| (356 | ) |
|
| (267 | ) |
Ending balance |
| $ | 1,671 |
|
| $ | 4,402 |
|
| $ | 1,671 |
|
| $ | 4,402 |
|
2925
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
At September 30, 2023, 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. At December 31, 2022, the balance included $2.3 million in foreclosed residential real estate properties recorded as a result of obtaining physical possession of the property.
At September 30, 2023, there was $27,000 of consumer mortgage loans secured by residential real estate properties in foreclosure. At December 31, 2022, there were no recorded investments of consumer mortgage loans secured by residential real estate properties in foreclosure.
There were no internally financed sales of OREO for the three or nine months ended September 30, 2023 or 2022.
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 2036, some of which include renewal or termination options to extend the lease. In addition, the Company leases or subleases real estate to third parties. The Company includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Company will exercise the option. In addition, the Company has elected to account for any non-lease components in its real estate leases as part of the associated lease component. The Company has also elected not to recognize leases with original lease terms of 12 months or less ("short-term leases") on the Company’s Condensed Consolidated Statements of Financial Condition.
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 periods indicated:
|
| Balance Sheet Line Item |
| September 30, 2023 |
|
| December 31, 2022 |
|
| Balance Sheet Line Item |
| March 31, 2024 |
|
| December 31, 2023 |
| ||||
Operating lease right-of-use asset |
| Accrued interest receivable and other assets |
| $ | 13,265 |
|
| $ | 11,352 |
|
| Accrued interest receivable and other assets |
| $ | 10,352 |
|
| $ | 12,474 |
|
Operating lease liability |
| Accrued interest payable and other liabilities |
|
| 15,128 |
|
|
| 14,391 |
|
| Accrued interest payable and other liabilities |
|
| 12,205 |
|
|
| 14,268 |
|
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 regular advance rate, adjusted for the lease term and other factors. At September 30, 2023,March 31, 2024, the weighted average discount rate of operating leases was 2.87%2.75% and the weighted average remaining life of operating leases was 56.2.0 years, compared to 1.95%2.90% and 6.26.1 years as of December 31, 2022.2023.
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 following periods:
|
| Three Months Ended |
|
| Nine Months Ended |
|
| Three Months Ended |
| |||||||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||||
Operating lease cost |
| $ | 770 |
|
| $ | 682 |
|
| $ | 2,014 |
|
| $ | 2,260 |
|
| $ | 727 |
|
| $ | 623 |
|
Short-term lease cost |
|
| 127 |
|
|
| 47 |
|
|
| 295 |
|
|
| 160 |
|
|
| 87 |
|
|
| 69 |
|
Variable lease cost |
|
| 470 |
|
|
| 384 |
|
|
| 1,239 |
|
|
| 1,264 |
|
|
| 423 |
|
|
| 412 |
|
Less: Sublease income |
|
| (160 | ) |
|
| (158 | ) |
|
| (475 | ) |
|
| (434 | ) |
|
| (130 | ) |
|
| (156 | ) |
Total lease cost, net |
| $ | 1,207 |
|
| $ | 955 |
|
| $ | 3,073 |
|
| $ | 3,250 |
|
| $ | 1,107 |
|
| $ | 948 |
|
Operating cash flows paid for operating lease amounts included in the measure of lease liabilities were $1.4 million$953,000 and $927,000$855,000 for the three months ended September 30,March 31, 2024 and 2023, respectively.
The Company recorded $422,000and 2022,$313,000 of right-of-use lease assets in exchange for operating lease liabilities for the three months ended March 31, 2024 and 2023, respectively. For
During the quarter ended September 30, 2023, operating cash flows paid included early termination paymentsMarch 31, 2024, the Company recorded $194,000 of $471,000 forimpairment related to two branch facilities to be closed at the end of the Company’s previously closedsecond quarter of 2024. Impairments were recognized on operating lease right-of-use assets and are reflected in other non-interest expense.
3026
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
branch facilities, resulting in a gain of $838,000. Operating cash flows paid for operating lease amounts included in the measure of lease liabilities were $3.1 million and $3.0 million for the nine months ended September 30, 2023 and 2022, respectively.
The Company recorded $3.8 million and $114,000 of right-of-use lease assets in exchange for operating lease liabilities for the three months ended September 30, 2023 and 2022, respectively. The Company recorded $4.8 million and $1.4 million of right-of-use lease assets in exchange for operating lease liabilities for the nine months ended September 30, 2023 and 2022, respectively. The additions recorded to right-of-use assets and operating lease liabilities included $3.8 million related to the acquisition of Inland. Refer to Note 3—Acquisition of a Business for further details.During the quarter ended September 30, 2023, the Company recorded $395,000 of impairment related to an acquired non-branch facility lease it intends to terminate by year end.
The future minimum lease payments for operating leases, subsequent to September 30, 2023,March 31, 2024, as recorded on the Condensed Consolidated Statements of Financial Condition, are summarized as follows:
|
| Operating Lease |
|
| Operating Lease |
| ||
2023 |
| $ | 946 |
| ||||
2024 |
|
| 3,807 |
|
| $ | 2,906 |
|
2025 |
|
| 3,210 |
|
|
| 3,266 |
|
2026 |
|
| 2,488 |
|
|
| 2,359 |
|
2027 |
|
| 1,442 |
|
|
| 1,313 |
|
2028 |
|
| 986 |
| ||||
Thereafter |
|
| 5,177 |
|
|
| 2,529 |
|
Total undiscounted lease payments |
|
| 17,070 |
|
|
| 13,359 |
|
Less: Imputed interest |
|
| (1,942 | ) |
|
| (1,154 | ) |
Net lease liabilities |
| $ | 15,128 |
|
| $ | 12,205 |
|
The total amount of minimum rentals to be received in the future on these subleases is approximately $1.3$1.0 million, and the leases have contractual lives extending through 2028. In addition to the above required lease payments, the Company has contractual obligations related primarily to information technology contracts and other maintenance contracts.
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 three and nine months ended September 30, 2023March 31, 2024 and 2022:2023:
|
| For the Three Months Ended September 30, |
| |||||||||||||||||||||
|
| 2023 |
|
| 2022 |
| ||||||||||||||||||
|
| Goodwill |
|
| Core |
|
| Customer Relationship |
|
| Goodwill |
|
| Core |
|
| Customer Relationship |
| ||||||
Beginning balance |
| $ | 148,353 |
|
| $ | 6,110 |
|
| $ | 1,514 |
|
| $ | 148,353 |
|
| $ | 11,945 |
|
| $ | 1,796 |
|
Additions |
|
| 33,352 |
|
|
| 17,250 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Amortization |
|
| — |
|
|
| (1,484 | ) |
|
| (67 | ) |
|
| — |
|
|
| (1,529 | ) |
|
| (81 | ) |
Ending balance |
| $ | 181,705 |
|
| $ | 21,876 |
|
| $ | 1,447 |
|
| $ | 148,353 |
|
| $ | 10,416 |
|
| $ | 1,715 |
|
Accumulated amortization |
| N/A |
|
| $ | 50,840 |
|
| $ | 1,769 |
|
| N/A |
|
| $ | 45,050 |
|
| $ | 1,501 |
| ||
Weighted average remaining |
| N/A |
|
| 8.4 Years |
|
| 5.4 Years |
|
| N/A |
|
| 4.5 Years |
|
| 6.4 Years |
| ||||||
31
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
|
| For the Nine Months Ended September 30, |
|
| For the Three Months Ended March 31, |
| ||||||||||||||||||||||||||||||||||||||||||
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||||||||||||||||||||||||||||||||||
|
| Goodwill |
|
| Core |
|
| Customer Relationship |
|
| Goodwill |
|
| Core |
|
| Customer Relationship |
|
| Goodwill |
|
| Core |
|
| Customer Relationship |
|
| Goodwill |
|
| Core |
|
| Customer Relationship |
| ||||||||||||
Beginning balance |
| $ | 148,353 |
|
| $ | 8,886 |
|
| $ | 1,648 |
|
| $ | 148,353 |
|
| $ | 15,004 |
|
| $ | 2,201 |
|
| $ | 181,705 |
|
| $ | 20,393 |
|
| $ | 1,380 |
|
| $ | 148,353 |
|
| $ | 8,886 |
|
| $ | 1,648 |
|
Additions |
|
| 33,352 |
|
|
| 17,250 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||
Amortization |
|
| — |
|
|
| (4,260 | ) |
|
| (201 | ) |
|
| — |
|
|
| (4,588 | ) |
|
| (486 | ) |
|
| — |
|
|
| (1,278 | ) |
|
| (67 | ) |
|
| — |
|
|
| (1,388 | ) |
|
| (67 | ) |
Ending balance |
| $ | 181,705 |
|
| $ | 21,876 |
|
| $ | 1,447 |
|
| $ | 148,353 |
|
| $ | 10,416 |
|
| $ | 1,715 |
|
| $ | 181,705 |
|
| $ | 19,115 |
|
| $ | 1,313 |
|
| $ | 148,353 |
|
| $ | 7,498 |
|
| $ | 1,581 |
|
Accumulated amortization |
| N/A |
|
| $ | 50,840 |
|
| $ | 1,769 |
|
| N/A |
|
| $ | 45,050 |
|
| $ | 1,501 |
|
| N/A |
| $ | 53,601 |
|
| $ | 1,903 |
|
| N/A |
| $ | 47,968 |
|
| $ | 1,635 |
| ||||||
Weighted average remaining |
| N/A |
|
| 8.4 Years |
|
| 5.4 Years |
|
| N/A |
|
| 4.5 Years |
|
| 6.4 Years |
|
| N/A |
| 8.1 Years |
| 4.9 Years |
| N/A |
| 4.5 Years |
| 5.9 Years |
| |||||||||||||||||
The Company added additional goodwill and core deposit intangible assets in conjunction with the Inland 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 September 30, 2023:March 31, 2024:
|
| Estimated |
|
| Estimated |
| ||
2023 |
| $ | 1,550 |
| ||||
2024 |
|
| 5,380 |
|
| $ | 4,035 |
|
2025 |
|
| 4,473 |
|
|
| 4,473 |
|
2026 |
|
| 3,566 |
|
|
| 3,566 |
|
2027 |
|
| 2,676 |
|
|
| 2,676 |
|
2028 |
|
| 2,101 |
| ||||
Thereafter |
|
| 5,678 |
|
|
| 3,577 |
|
Total |
| $ | 23,323 |
|
| $ | 20,428 |
|
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 ninethree months ended September 30,March 31, 2024 and 2023 was 25.0% and 2022 was 26.0% and 23.4%25.7%, respectively. The Company recorded discrete income tax benefit of $196,000$501,000 and $2.1 million$134,000 related to the exercise of stock options and vesting of restricted shares for the ninethree months ended September 30,March 31, 2024 and 2023, and 2022, respectively.
Net deferred tax assets increased to $89.8$53.0 million at September 30, 2023March 31, 2024 compared to $68.2$50.1 million at December 31, 2022,2023, primarily as a result of acquired deferred tax assets associated with the Inland acquisition. Refer to Note 3—Acquisition of a Business for further details.change in unrealized losses on available-for-sale securities.
Note 11—Deposits27
The composition of deposits was as follows as of September 30, 2023 and December 31, 2022:
|
| September 30, |
|
| December 31, |
| ||
|
| 2023 |
|
| 2022 |
| ||
Non-interest-bearing demand deposits |
| $ | 1,959,855 |
|
| $ | 2,138,645 |
|
Interest-bearing checking accounts |
|
| 592,771 |
|
|
| 592,098 |
|
Money market demand accounts |
|
| 2,062,252 |
|
|
| 1,415,653 |
|
Other savings |
|
| 581,073 |
|
|
| 625,798 |
|
Time deposits (below $250,000) |
|
| 1,447,053 |
|
|
| 762,250 |
|
Time deposits ($250,000 and above) |
|
| 310,686 |
|
|
| 160,677 |
|
Total deposits |
| $ | 6,953,690 |
|
| $ | 5,695,121 |
|
32
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
Note 11—Deposits
The composition of deposits was as follows as of March 31, 2024 and December 31, 2023:
|
| March 31, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
Non-interest-bearing demand deposits |
| $ | 1,851,727 |
|
| $ | 1,905,876 |
|
Interest-bearing checking accounts |
|
| 687,142 |
|
|
| 577,609 |
|
Money market demand accounts |
|
| 2,263,819 |
|
|
| 2,266,030 |
|
Other savings |
|
| 524,890 |
|
|
| 542,532 |
|
Time deposits (below $250,000) |
|
| 1,594,290 |
|
|
| 1,520,082 |
|
Time deposits ($250,000 and above) |
|
| 428,334 |
|
|
| 364,870 |
|
Total deposits |
| $ | 7,350,202 |
|
| $ | 7,176,999 |
|
There were $549.1$436.3 million and $251.5$480.0 million of brokered deposits included in time deposits below $250,000$250,000 at September 30, 2023March 31, 2024 and December 31, 2022,2023, respectively.
At September 30, 2023,March 31, 2024, the scheduled maturities of time deposits were:
|
| Scheduled Maturities |
|
| Scheduled Maturities |
| ||
2023 |
| $ | 584,912 |
| ||||
2024 |
|
| 1,125,546 |
|
| $ | 1,653,993 |
|
2025 |
|
| 32,981 |
|
|
| 354,598 |
|
2026 |
|
| 8,432 |
|
|
| 8,126 |
|
2027 |
|
| 5,046 |
|
|
| 4,689 |
|
2028 |
|
| 1,092 |
| ||||
Thereafter |
|
| 822 |
|
|
| 126 |
|
Total |
| $ | 1,757,739 |
|
| $ | 2,022,624 |
|
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 Hedging Activities for additional discussion.
Note 12—Other Borrowings
The following is a summary of the Company’s other borrowings as of the dates presented:
|
| September 30, |
|
| December 31, |
|
| March 31, |
|
| December 31, |
| ||||
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||
Federal Home Loan Bank advances |
| $ | 640,000 |
|
| $ | 625,000 |
|
| $ | 470,000 |
|
| $ | 325,000 |
|
Bank Term Funding Program |
|
| 200,000 |
|
|
| — |
| ||||||||
Securities sold under agreements to repurchase |
|
| 38,233 |
|
|
| 15,399 |
|
|
| 34,506 |
|
|
| 40,607 |
|
Term Loan |
|
| 20,000 |
|
|
| — |
|
|
| 16,667 |
|
|
| 18,333 |
|
Line of credit |
|
| 15,000 |
|
|
| — |
|
|
| — |
|
|
| 11,250 |
|
Total |
| $ | 713,233 |
|
| $ | 640,399 |
|
| $ | 721,173 |
|
| $ | 395,190 |
|
Byline Bank has the capacity to borrow funds from the discount window of the Federal Reserve System. As of September 30, 2023March 31, 2024 and December 31, 2022,2023, there were no outstanding advances under the Federal Reserve Bank discount window line. The Company pledges loans and leases as collateral for the FRB discount window borrowing. Refer to Note 5—Loan and Lease Receivables and Allowance for Credit Losses for additional discussion.
On January 17, 2024, the Company entered into a Letter Agreement with the Federal Reserve Bank of Chicago that allows the Bank 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 pledges securities to FBR Chicago as collateral for available advances. The advance carries a fixed interest rate of 4.91%, and matures on January 22, 2025. Advances under the BTFP are prepayable at any time without a prepayment penalty.
28
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
At September 30, 2023,March 31, 2024, fixed-rate Federal Home Loan Bank (“FHLB”) advances totaled $190.0$220.0 million, with an interest rate of 5.46%5.45% and maturity of October 2023.matured in April 2024. Total variable rate advances were $450.0$250.0 million at September 30, 2023,March 31, 2024, with an interest rates ranging from 5.51% to 5.55%,rate of 5.49% that may reset daily with maturities between November 2023 and December 2023.a maturity date of June 2024. Advances from the FHLB are collateralized by residential real estate loans, commercial real estate loans, and securities. The Bank’s maximum borrowing capacity is limited to 35%35% of total assets. Required investment in FHLB stock is $4.50$4.50 for every $100 in advances thereafter.
Securities sold under agreements to repurchase represent a demand deposit product offered to customers that sweep balances in excess of the FDIC insurance limit into overnight repurchase agreements. The Company pledges securities as collateral for the repurchase agreements. Refer to Note 4—Securities for additional discussion.
33
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, the Company entered into a $30.0$30.0 million revolving credit agreement with a correspondent bank. Through subsequent amendments, the revolving credit agreement was reduced to $15.0$15.0 million. The amended revolving line of credit bears interest at either SOFRthe Secured Overnight Financing Rate ("SOFR") plus 195205 basis points or 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. On May 26, 2023, the Company amended the agreement with the lender, which provides for: i) the renewal of the revolving line-of-credit facility of up to $15.0$15.0 million, extending its maturity date to May 26, 2024; and ii) a new term loan facility in the principal amount of up to $20.0$20.0 million with a maturity date of May 26, 2026, each subject to the existing Negative Pledge Agreement dated October 11, 2018, as amended.
At September 30, 2023,March 31, 2024, the variable term loan had an interest rate of 7.62%.7.62% and an outstanding balance of $16.7 million. At September 30,December 31, 2023, the variable term loan had an interest rate of 7.64% and an outstanding balance of $18.3 million. At March 31, 2024, the line of credit had a no outstanding balance. At December 31, 2023, the line of credit had a $15.0$11.3 million outstanding balance and an interest rate of 7.38%. At December 31, 2022, the line of credit had no outstanding balance.7.39%
The following table presents short-term credit lines available for use as of the dates presented:
|
| September 30, |
|
| December 31, |
|
| March 31, |
|
| December 31, |
| ||||
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||
Federal Home Loan Bank line |
| $ | 1,984,390 |
|
| $ | 1,903,549 |
|
| $ | 2,614,959 |
|
| $ | 2,781,747 |
|
Federal Reserve Bank of Chicago discount window line |
|
| 734,774 |
|
|
| 804,578 |
|
|
| 841,104 |
|
|
| 866,490 |
|
Available federal funds lines |
|
| 135,000 |
|
|
| 135,000 |
|
|
| 135,000 |
|
|
| 123,750 |
|
Bank Term Funding Program |
|
| 27,715 |
|
|
| — |
| ||||||||
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 Hedging Activities for additional discussion.
29
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
Note 13—Subordinated Notes and Junior Subordinated Debentures
In 2020, the Company issued $75.0$75.0 million in fixed-to-floating subordinated notes that mature on July 1, 2030. The subordinated notes bear a fixed interest rate of 6.00%6.00% until July 1, 2025 and a floating interest rate equal to a benchmark rate, which is expected to be the three-month SOFR, plus 588 basis points thereafter until maturity. The transaction resulted in debt issuance costs of approximately $1.7$1.7 million that is being amortized over 10 years.
As of September 30, 2023,March 31, 2024, the net liability outstanding of the subordinated notes was $73.8$73.9 million. The Company may, at its option, redeem the notes, in whole or in part, on a semi-annual basis beginning on July 1, 2025, subject to obtaining the prior approval of the Federal Reserve to the extent such approval is then required. The subordinated notes qualify as Tier 2 capital for regulatory capital purposes.
At September 30, 2023March 31, 2024 and December 31, 2022,2023, the Company’s junior subordinated debentures by issuance were as follows:
|
| Aggregate Principal Amount |
|
|
| Aggregate Principal Amount |
|
| ||||||||||||||||||||
Name of Trust |
| Stated |
| September 30, 2023 |
|
| December 31, 2022 |
|
| Contractual Rate September 30, 2023 |
| Interest Rate Spread(1) |
| Stated |
| March 31, 2024 |
|
| December 31, 2023 |
|
| Contractual Rate March 31, 2024 |
| Interest Rate Spread(1) | ||||
Metropolitan Statutory Trust I |
| March 17, 2034 |
| $ | 35,000 |
|
| $ | 35,000 |
|
| 8.46% |
| SOFR + spread adjustment + 2.79% |
| March 17, 2034 |
| $ | 35,000 |
|
| $ | 35,000 |
|
| 8.38% |
| SOFR + spread adjustment + 2.79% |
First Evanston Bancorp Trust I |
| March 15, 2035 |
|
| 10,000 |
|
|
| 10,000 |
|
| 7.45% |
| SOFR + spread adjustment + 1.78% |
| March 15, 2035 |
|
| 10,000 |
|
|
| 10,000 |
|
| 7.37% |
| SOFR + spread adjustment + 1.78% |
AmeriMark Capital Trust I |
| April 23, 2034 |
|
| 5,000 |
|
|
| — |
|
| 8.36% |
| SOFR + spread adjustment + 2.75% |
| April 23, 2034 |
|
| 5,000 |
|
|
| 5,000 |
|
| 8.33% |
| SOFR + spread adjustment + 2.75% |
Inland Bancorp Trust II |
| September 15, 2035 |
|
| 10,000 |
|
|
| — |
|
| 7.27% |
| SOFR + spread adjustment + 1.60% |
| September 15, 2035 |
|
| 10,000 |
|
|
| 10,000 |
|
| 7.19% |
| SOFR + spread adjustment + 1.60% |
Inland Bancorp Trust III |
| December 15, 2036 |
|
| 10,000 |
|
|
| — |
|
| 7.32% |
| SOFR + spread adjustment + 1.65% |
| December 15, 2036 |
|
| 10,000 |
|
|
| 10,000 |
|
| 7.24% |
| SOFR + spread adjustment + 1.65% |
Inland Bancorp Trust IV |
| June 6, 2037 |
|
| 7,000 |
|
|
| — |
|
| 7.28% |
| SOFR + spread adjustment + 1.62% |
| June 6, 2037 |
|
| 7,000 |
|
|
| 7,000 |
|
| 7.21% |
| SOFR + spread adjustment + 1.62% |
Inland Bancorp Trust V |
| September 15, 2037 |
|
| 10,000 |
|
|
| — |
|
| 7.09% |
| SOFR + spread adjustment + 1.42% |
| September 15, 2037 |
|
| 10,000 |
|
|
| 10,000 |
|
| 7.01% |
| SOFR + spread adjustment + 1.42% |
Total liability, at par |
|
| 87,000 |
|
|
| 45,000 |
|
|
|
|
|
|
| 87,000 |
|
|
| 87,000 |
|
|
|
|
| ||||
Discount |
|
| (16,664 | ) |
|
| (7,662 | ) |
|
|
|
|
|
| (16,433 | ) |
|
| (16,548 | ) |
|
|
|
| ||||
Total liability, at carrying value |
| $ | 70,336 |
|
| $ | 37,338 |
|
|
|
|
|
| $ | 70,567 |
|
| $ | 70,452 |
|
|
|
|
| ||||
(1) SOFR is three month SOFR and the spread adjustment is 0.26161%0.26161%
In 2004, the Company’s predecessor, Metropolitan Bank Group, Inc., issued $35.0$35.0 million floating rate junior subordinated debentures to Metropolitan Statutory Trust I, which was formed for the issuance of trust preferred securities. Beginning on September 14, 2023, the interest rate reset to the three-month CME Secured Overnight Financing Rate ("SOFR")SOFR plus a tenor spread adjustment of 0.26161%0.26161% plus 2.79% (8.46%2.79% (8.38% and 7.53%8.43% at September 30, 2023March 31, 2024 and December 31, 2022,2023, respectively). Interest is paid on a quarterly basis. The Company has the right to redeem the debentures, in whole or in part, on
34
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
any interest payment date on or after March 2009. Accrued interest payable was $110,000 and $98,000 as of September 30, 2023 and December 31, 2022, respectively.
As part of the First Evanston acquisition, the Company assumed the obligations to First Evanston Bancorp Trust I of $10.0$10.0 million in principal amount, which was formed for the issuance of trust preferred securities. Beginning on September 15, 2023, the interest rate reset to the three-month CME SOFR plus a tenor spread adjustment of 0.26161%0.26161% plus 1.78% (7.45%1.78% (7.37% and 6.55%7.43% at September 30, 2023March 31, 2024 and December 31, 2022,2023, respectively), which is in effect until the debentures mature in 2035. Interest is paid on a quarterly basis. The Company has the right to redeem the debentures, in whole or in part, on any interest payment date on or after March 2010. The Company has the option to defer interest payments on the debentures from time to time for a period not to exceed five consecutive years. Accrued interest payable was $32,000 and $30,000 as of September 30, 2023 and December 31, 2022, respectively.
As part of the Inland acquisition, the Company assumed the obligations to several trust preferred securities. Refer to Note 3—Acquisition of a Business for further details. Interest rates are calculated as the three-month CME SOFR plus a tenor spread adjustment of 0.26161%0.26161% plus negotiated additional basis points. Refer to table above for contractual rates and interest rate spread calculation. Interest is paid on a quarterly basis. Accrued interest payable for the AmeriMark and Inland trusts was $214,000 as of September 30, 2023.
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. 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 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.
30
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
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.
The following table summarizes the contract or notional amount of outstanding loan and lease commitments at September 30, 2023March 31, 2024 and December 31, 2022:2023:
|
| September 30, 2023 |
|
| December 31, 2022 |
|
| March 31, 2024 |
|
| December 31, 2023 |
| ||||||||||||||||||||||||||||||||||||
|
| Fixed Rate |
|
| Variable Rate |
|
| Total |
|
| Fixed Rate |
|
| Variable Rate |
|
| Total |
|
| Fixed Rate |
|
| Variable Rate |
|
| Total |
|
| Fixed Rate |
|
| Variable Rate |
|
| Total |
| ||||||||||||
Commitments to extend credit |
| $ | 291,801 |
|
| $ | 2,002,472 |
|
| $ | 2,294,273 |
|
| $ | 258,049 |
|
| $ | 1,821,175 |
|
| $ | 2,079,224 |
|
| $ | 258,617 |
|
| $ | 1,954,869 |
|
| $ | 2,213,486 |
|
| $ | 269,325 |
|
| $ | 2,013,819 |
|
| $ | 2,283,144 |
|
Letters of credit |
|
| 695 |
|
|
| 65,781 |
|
|
| 66,476 |
|
|
| 536 |
|
|
| 61,328 |
|
|
| 61,864 |
|
|
| 640 |
|
|
| 65,808 |
|
|
| 66,448 |
|
|
| 612 |
|
|
| 67,443 |
|
|
| 68,055 |
|
Total |
| $ | 292,496 |
|
| $ | 2,068,253 |
|
| $ | 2,360,749 |
|
| $ | 258,585 |
|
| $ | 1,882,503 |
|
| $ | 2,141,088 |
|
| $ | 259,257 |
|
| $ | 2,020,677 |
|
| $ | 2,279,934 |
|
| $ | 269,937 |
|
| $ | 2,081,262 |
|
| $ | 2,351,199 |
|
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
35
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
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 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 to a third-party the performance of a customer. 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 1.00%1.00% to 18.00%15.00% and maturities up to 20532052. Variable rate loan commitments have interest rates ranging from 3.00%4.00% to 18.50%18.50% and maturities up to 20492053.
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.
31
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
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:
36
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
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 20232024 and 2022,2023, 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-sale portfolio above.
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 September 30, 2023 and December 31, 2022:32
|
|
|
|
| Fair Value Measurements Using |
| ||||||||||
September 30, 2023 |
| Fair Value |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Securities available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
| ||||
U.S. Treasury Notes |
| $ | 104,029 |
|
| $ | 104,029 |
|
| $ | — |
|
| $ | — |
|
U.S. Government agencies |
|
| 125,115 |
|
|
| — |
|
|
| 125,115 |
|
|
| — |
|
Obligations of states, municipalities, and political |
|
| 80,520 |
|
|
| — |
|
|
| 80,520 |
|
|
| — |
|
Mortgage-backed securities; residential |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Agency |
|
| 621,976 |
|
|
| — |
|
|
| 621,976 |
|
|
| — |
|
Non-Agency |
|
| 96,931 |
|
|
| — |
|
|
| 96,931 |
|
|
| — |
|
Mortgage-backed securities; commercial |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Agency |
|
| 139,865 |
|
|
| — |
|
|
| 139,865 |
|
|
| — |
|
Corporate securities |
|
| 34,972 |
|
|
| — |
|
|
| 34,972 |
|
|
| — |
|
Asset-backed securities |
|
| 36,521 |
|
|
| — |
|
|
| 36,521 |
|
|
| — |
|
Equity and other securities, at fair value |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Mutual funds |
|
| 2,415 |
|
|
| 2,415 |
|
|
| — |
|
|
| — |
|
Equity securities |
|
| 5,487 |
|
|
| — |
|
|
| 5,206 |
|
|
| 281 |
|
Servicing assets |
|
| 19,743 |
|
|
| — |
|
|
| — |
|
|
| 19,743 |
|
Derivative assets |
|
| 77,002 |
|
|
| — |
|
|
| 77,002 |
|
|
| — |
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Derivative liabilities |
|
| 30,641 |
|
|
| — |
|
|
| 30,641 |
|
|
| — |
|
37
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 Company’s financial assets and liabilities that were measured at fair value on a recurring basis at March 31, 2024 and December 31, 2023:
|
|
|
|
| Fair Value Measurements Using |
|
|
|
|
| Fair Value Measurements Using |
| ||||||||||||||||||||
December 31, 2022 |
| Fair Value |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||||||||||||||||||
March 31, 2024 |
| Fair Value |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||||||||||||||||||
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Securities available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
U.S. Treasury Notes |
| $ | 40,723 |
|
| $ | 40,723 |
|
| $ | — |
|
| $ | — |
|
| $ | 86,112 |
|
| $ | 86,112 |
|
| $ | — |
|
| $ | — |
|
U.S. Government agencies |
|
| 130,364 |
|
|
| — |
|
|
| 130,364 |
|
|
| — |
|
|
| 138,054 |
|
|
|
|
|
| 138,054 |
|
|
|
| ||
Obligations of states, municipalities, and political |
|
| 61,876 |
|
|
| — |
|
|
| 61,876 |
|
|
|
|
|
| 81,709 |
|
|
| — |
|
|
| 81,709 |
|
|
| — |
| |
Mortgage-backed securities; residential |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Agency |
|
| 595,796 |
|
|
| — |
|
|
| 595,796 |
|
|
| — |
|
|
| 726,587 |
|
|
| — |
|
|
| 726,587 |
|
|
| — |
|
Non-Agency |
|
| 106,249 |
|
|
| — |
|
|
| 106,249 |
|
|
| — |
|
|
| 113,709 |
|
|
| — |
|
|
| 113,709 |
|
|
| — |
|
Mortgage-backed securities; commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Agency |
|
| 157,030 |
|
|
| — |
|
|
| 157,030 |
|
|
| — |
|
|
| 163,546 |
|
|
| — |
|
|
| 163,546 |
|
|
| — |
|
Corporate securities |
|
| 41,436 |
|
|
| — |
|
|
| 41,436 |
|
|
| — |
|
|
| 36,752 |
|
|
| — |
|
|
| 36,752 |
|
|
| — |
|
Asset-backed securities |
|
| 40,957 |
|
|
| — |
|
|
| 40,957 |
|
|
| — |
|
|
| 32,678 |
|
|
| — |
|
|
| 32,678 |
|
|
| — |
|
Equity and other securities, at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Mutual funds |
|
| 2,518 |
|
|
| 2,518 |
|
|
| — |
|
|
| — |
|
|
| 2,517 |
|
|
| 2,517 |
|
|
| — |
|
|
| — |
|
Equity securities |
|
| 5,471 |
|
|
| — |
|
|
| 4,805 |
|
|
| 666 |
|
|
| 6,618 |
|
|
| — |
|
|
| 6,333 |
|
|
| 285 |
|
Servicing assets |
|
| 19,172 |
|
|
| — |
|
|
| — |
|
|
| 19,172 |
|
|
| 20,992 |
|
|
| — |
|
|
| — |
|
|
| 20,992 |
|
Derivative assets |
|
| 65,342 |
|
|
| — |
|
|
| 65,342 |
|
|
| — |
|
|
| 60,103 |
|
|
| — |
|
|
| 60,103 |
|
|
| — |
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Derivative liabilities |
|
| 17,817 |
|
|
| — |
|
|
| 17,817 |
|
|
| — |
|
|
| 22,531 |
|
|
| — |
|
|
| 22,531 |
|
|
| — |
|
|
|
|
|
| Fair Value Measurements Using |
| ||||||||||
December 31, 2023 |
| Fair Value |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Securities available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
| ||||
U.S. Treasury Notes |
| $ | 115,434 |
|
| $ | 115,434 |
|
| $ | — |
|
| $ | — |
|
U.S. Government agencies |
|
| 130,695 |
|
|
| — |
|
|
| 130,695 |
|
|
| — |
|
Obligations of states, municipalities, and political |
|
| 82,275 |
|
|
| — |
|
|
| 82,275 |
|
|
|
| |
Mortgage-backed securities; residential |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Agency |
|
| 695,803 |
|
|
| — |
|
|
| 695,803 |
|
|
| — |
|
Non-Agency |
|
| 100,260 |
|
|
| — |
|
|
| 100,260 |
|
|
| — |
|
Mortgage-backed securities; commercial |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Agency |
|
| 147,204 |
|
|
| — |
|
|
| 147,204 |
|
|
| — |
|
Corporate securities |
|
| 36,171 |
|
|
| — |
|
|
| 36,171 |
|
|
| — |
|
Asset-backed securities |
|
| 34,638 |
|
|
| — |
|
|
| 34,638 |
|
|
| — |
|
Equity and other securities, at fair value |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Mutual funds |
|
| 2,554 |
|
|
| 2,554 |
|
|
| — |
|
|
| — |
|
Equity securities |
|
| 6,189 |
|
|
| — |
|
|
| 5,908 |
|
|
| 281 |
|
Servicing assets |
|
| 19,844 |
|
|
| — |
|
|
| — |
|
|
| 19,844 |
|
Derivative assets |
|
| 56,923 |
|
|
| — |
|
|
| 56,923 |
|
|
| — |
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Derivative liabilities |
|
| 19,345 |
|
|
| — |
|
|
| 19,345 |
|
|
| — |
|
33
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 additional information about financial assets measured at fair value on recurring basis for which the Company used significant unobservable inputs (Level 3):
| Nine Months Ended September 30, |
| Three Months Ended March 31, |
| ||||||||||||||||||||||||||
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| ||||||||
| Investment Securities |
|
| Servicing Assets |
| Investment Securities |
|
| Servicing Assets |
| ||||||||||||||||||||
Balance, beginning of period | $ | 666 |
|
| $ | 686 |
|
| $ | 19,172 |
|
| $ | 23,744 |
| $ | 281 |
|
| $ | 666 |
|
| $ | 19,844 |
|
| $ | 19,172 |
|
Additions, net |
| — |
|
|
| — |
|
|
| 4,426 |
|
|
| 5,592 |
|
| — |
|
|
| — |
|
|
| 1,851 |
|
|
| 1,116 |
|
Maturity |
| (400 | ) |
|
| — |
|
|
| — |
|
|
| — |
| |||||||||||||||
Accretion of discount |
| 82 |
|
|
| — |
|
|
| — |
|
|
| — |
| |||||||||||||||
Change in fair value |
| (67 | ) |
|
| (21 | ) |
|
| (3,855 | ) |
|
| (8,209 | ) |
| 4 |
|
|
| (36 | ) |
|
| (703 | ) |
|
| 656 |
|
Balance, end of period | $ | 281 |
|
| $ | 665 |
|
| $ | 19,743 |
|
| $ | 21,127 |
| $ | 285 |
|
| $ | 630 |
|
| $ | 20,992 |
|
| $ | 20,944 |
|
The Company did notnot have any transfers to or from Level 3 of the fair value hierarchy during the ninethree months ended September 30, 2023March 31, 2024 and 2022.2023.
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 September 30, 2023:March 31, 2024:
Financial Instruments |
| Valuation Technique |
| Unobservable Inputs |
| Range of |
| Weighted |
|
| Impact to |
| Valuation Technique |
| Unobservable Inputs |
| Range of |
| Weighted |
|
| Impact to | ||
Single issuer trust preferred |
| Discounted cash flow |
| Discount rate |
| 6.4% |
|
| 6.4 | % |
| Decrease |
| Discounted cash flow |
| Discount rate |
| 7.9% |
|
| 7.9 | % |
| Decrease |
Servicing assets |
| Discounted cash flow |
| Prepayment speeds |
| (1.0)% - 31.7% |
|
| 13.7 | % |
| Decrease |
| Discounted cash flow |
| Prepayment speeds |
| 0.0% - 38.9% |
|
| 15.6 | % |
| Decrease |
|
|
| Discount rate |
| 0.0% - 57.2% |
|
| 16.4 | % |
| Decrease |
|
|
| Discount rate |
| 0.0% - 52.8% |
|
| 10.6 | % |
| Decrease | |
|
|
|
| Expected weighted |
| 0.0 - 9.5 years |
| 3.8 years |
| Increase |
|
|
| Expected weighted |
| 0.0 - 9.6 Years |
| 3.7 Years |
| Increase | ||||
The Company used the following methods and significant assumptions to estimate fair value for certain assets measured and carried at fair value on a non-recurringnon-recurring basis:
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 rat, or a calculation of the fair value of the underlying
38
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.
34
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
Adjustments to fair value based on such non-recurring transactions generally result from the application of lower-of-cost-or-market accounting or write-downs of individual assets due to impairment. The following tables summarize the Company’s assets that were measured at fair value on a non-recurring basis, as of September 30, 2023March 31, 2024 and December 31, 2022:2023:
|
|
|
|
| Fair Value Measurements Using |
|
|
|
|
| Fair Value Measurements Using |
| ||||||||||||||||||||
September 30, 2023 |
| Fair Value |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||||||||||||||||||
March 31, 2024 |
| Fair Value |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||||||||||||||||||
Non-recurring |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Individually evaluated loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Commercial real estate |
| $ | 54,397 |
|
| $ | — |
|
| $ | — |
|
| $ | 54,397 |
|
| $ | 31,873 |
|
| $ | — |
|
| $ | — |
|
| $ | 31,873 |
|
Residential real estate |
|
| 4,658 |
|
|
| — |
|
|
| — |
|
|
| 4,658 |
| ||||||||||||||||
Commercial and industrial |
|
| 33,679 |
|
|
| — |
|
|
| — |
|
|
| 33,679 |
|
|
| 27,117 |
|
|
| — |
|
|
| — |
|
|
| 27,117 |
|
Assets held for sale |
|
| 7,627 |
|
|
| — |
|
|
| — |
|
|
| 7,627 |
|
|
| 3,722 |
|
|
| — |
|
|
| — |
|
|
| 3,722 |
|
Other real estate owned |
|
| 1,671 |
|
|
| — |
|
|
| — |
|
|
| 1,671 |
|
|
| 785 |
|
|
| — |
|
|
| — |
|
|
| 785 |
|
|
|
|
|
| Fair Value Measurements Using |
|
|
|
|
| Fair Value Measurements Using |
| ||||||||||||||||||||
December 31, 2022 |
| Fair Value |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||||||||||||||||||
December 31, 2023 |
| Fair Value |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||||||||||||||||||
Non-recurring |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Individually evaluated loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Commercial real estate |
| $ | 37,959 |
|
| $ | — |
|
| $ | — |
|
| $ | 37,959 |
|
| $ | 51,978 |
|
| $ | — |
|
| $ | — |
|
| $ | 51,978 |
|
Residential real estate |
|
| 879 |
|
|
| — |
|
|
| — |
|
|
| 879 |
|
|
| 3,593 |
|
|
| — |
|
|
| — |
|
|
| 3,593 |
|
Construction, land development, and other land |
|
| 5,541 |
|
|
| — |
|
|
| — |
|
|
| 5,541 |
|
|
| 813 |
|
|
| — |
|
|
| — |
|
|
| 813 |
|
Commercial and industrial |
|
| 47,846 |
|
|
| — |
|
|
| — |
|
|
| 47,846 |
|
|
| 29,869 |
|
|
| — |
|
|
| — |
|
|
| 29,869 |
|
Assets held for sale |
|
| 8,673 |
|
|
| — |
|
|
| — |
|
|
| 8,673 |
|
|
| 4,484 |
|
|
| — |
|
|
| — |
|
|
| 4,484 |
|
Other real estate owned |
|
| 4,717 |
|
|
| — |
|
|
| — |
|
|
| 4,717 |
|
|
| 1,200 |
|
|
| — |
|
|
| — |
|
|
| 1,200 |
|
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.
3935
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.value given the variable interest rate and repricing of interest.
Bank Term Funding Program—The carrying amount approximates fair value given the short-term nature of the instrument.
Line of credit—The carrying amount approximates fair value.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:
|
|
|
|
| September 30, |
|
| December 31, |
|
|
|
|
| March 31, |
|
| December 31, |
| ||||||||||||||||||||||
|
| Fair Value |
|
| 2023 |
|
| 2022 |
|
| Fair Value |
|
| 2024 |
|
| 2023 |
| ||||||||||||||||||||||
|
| Hierarchy |
|
| Carrying |
|
| Estimated |
|
| Carrying |
|
| Estimated |
|
| Hierarchy |
|
| Carrying |
|
| Estimated |
|
| Carrying |
|
| Estimated |
| ||||||||||
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Cash and due from banks |
|
| 1 |
|
| $ | 71,248 |
|
| $ | 71,248 |
|
| $ | 62,274 |
|
| $ | 62,274 |
|
|
| 1 |
|
| $ | 58,640 |
|
| $ | 58,640 |
|
| $ | 60,431 |
|
| $ | 60,431 |
|
Interest bearing deposits with other banks |
|
| 2 |
|
|
| 357,640 |
|
|
| 357,640 |
|
|
| 117,079 |
|
|
| 117,079 |
|
|
| 2 |
|
|
| 578,197 |
|
|
| 578,197 |
|
|
| 165,705 |
|
|
| 165,705 |
|
Securities held-to-maturity |
|
| 2 |
|
|
| 1,157 |
|
|
| 1,133 |
|
|
| 2,705 |
|
|
| 2,672 |
|
|
| 2 |
|
|
| 1,156 |
|
|
| 1,149 |
|
|
| 1,157 |
|
|
| 1,149 |
|
Restricted stock |
|
| 2 |
|
|
| 30,505 |
|
|
| 30,505 |
|
|
| 28,202 |
|
|
| 28,202 |
|
|
| 2 |
|
|
| 22,793 |
|
|
| 22,793 |
|
|
| 16,304 |
|
|
| 16,304 |
|
Loans held for sale |
|
| 3 |
|
|
| 7,299 |
|
|
| 7,299 |
|
|
| 47,823 |
|
|
| 40,657 |
|
|
| 3 |
|
|
| 23,568 |
|
|
| 23,983 |
|
|
| 18,005 |
|
|
| 19,136 |
|
Loans and lease receivables, net (less impaired |
|
| 3 |
|
|
| 6,419,531 |
|
|
| 6,349,769 |
|
|
| 5,262,447 |
|
|
| 5,259,991 |
|
|
| 3 |
|
|
| 6,612,199 |
|
|
| 6,371,967 |
|
|
| 6,496,367 |
|
|
| 6,326,413 |
|
Accrued interest receivable |
|
| 3 |
|
|
| 39,844 |
|
|
| 39,844 |
|
|
| 29,815 |
|
|
| 29,815 |
|
|
| 3 |
|
|
| 43,728 |
|
|
| 43,728 |
|
|
| 43,922 |
|
|
| 43,922 |
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Non-interest-bearing deposits |
|
| 2 |
|
|
| 1,959,855 |
|
|
| 1,959,855 |
|
|
| 2,138,645 |
|
|
| 2,138,645 |
|
|
| 2 |
|
|
| 1,851,727 |
|
|
| 1,851,727 |
|
|
| 1,905,876 |
|
|
| 1,905,876 |
|
Interest-bearing deposits |
|
| 2 |
|
|
| 4,993,835 |
|
|
| 4,982,974 |
|
|
| 3,556,476 |
|
|
| 3,554,318 |
|
|
| 2 |
|
|
| 5,498,475 |
|
|
| 5,493,494 |
|
|
| 5,271,123 |
|
|
| 5,268,926 |
|
Accrued interest payable |
|
| 2 |
|
|
| 20,376 |
|
|
| 20,376 |
|
|
| 4,494 |
|
|
| 4,494 |
|
|
| 2 |
|
|
| 21,713 |
|
|
| 21,713 |
|
|
| 22,233 |
|
|
| 22,233 |
|
Federal Home Loan Bank advances |
|
| 2 |
|
|
| 640,000 |
|
|
| 640,000 |
|
|
| 625,000 |
|
|
| 625,000 |
|
|
| 2 |
|
|
| 470,000 |
|
|
| 470,000 |
|
|
| 325,000 |
|
|
| 325,000 |
|
Securities sold under repurchase agreement |
|
| 2 |
|
|
| 38,233 |
|
|
| 38,233 |
|
|
| 15,399 |
|
|
| 15,399 |
|
|
| 2 |
|
|
| 34,506 |
|
|
| 34,506 |
|
|
| 40,607 |
|
|
| 40,607 |
|
Term Loan |
|
| 2 |
|
|
| 20,000 |
|
|
| 20,000 |
|
|
| — |
|
|
| — |
|
|
| 2 |
|
|
| 16,667 |
|
|
| 16,667 |
|
|
| 18,333 |
|
|
| 18,333 |
|
Bank Term Funding Program |
|
| 2 |
|
|
| 200,000 |
|
|
| 200,000 |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||
Line of credit |
|
| 2 |
|
|
| 15,000 |
|
|
| 15,000 |
|
|
| — |
|
|
| — |
|
|
| 2 |
|
|
| — |
|
|
| — |
|
|
| 11,250 |
|
|
| 11,250 |
|
Subordinated notes |
|
| 2 |
|
|
| 73,822 |
|
|
| 72,870 |
|
|
| 73,691 |
|
|
| 70,925 |
|
|
| 2 |
|
|
| 73,909 |
|
|
| 72,194 |
|
|
| 73,866 |
|
|
| 76,063 |
|
Junior subordinated debentures |
|
| 3 |
|
|
| 70,336 |
|
|
| 72,491 |
|
|
| 37,338 |
|
|
| 40,131 |
|
|
| 3 |
|
|
| 70,567 |
|
|
| 73,772 |
|
|
| 70,452 |
|
|
| 72,701 |
|
36
40
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. The following tables present the fair value of the Company’s derivative financial instruments and classification on the Condensed Consolidated Statements of Financial Condition as of September 30, 2023March 31, 2024 and December 31, 2022:2023:
|
| September 30, 2023 |
|
| December 31, 2022 |
|
| March 31, 2024 |
|
| December 31, 2023 |
| ||||||||||||||||||||||||||||||||||||
|
|
|
| Fair Value |
|
|
|
| Fair Value |
|
|
|
| Fair Value |
|
|
|
| Fair Value |
| ||||||||||||||||||||||||||||
|
| Notional |
|
| Other |
|
| Other |
|
| Notional |
|
| Other |
|
| Other |
|
| Notional |
|
| Other |
|
| Other |
|
| Notional |
|
| Other |
|
| Other |
| ||||||||||||
Derivatives designated as hedging instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Interest rate swaps designated as cash flow |
| $ | 650,000 |
|
| $ | 47,488 |
|
| $ | (1,633 | ) |
| $ | 550,000 |
|
| $ | 47,249 |
|
| $ | — |
|
| $ | 650,000 |
|
| $ | 37,976 |
|
| $ | (582 | ) |
| $ | 650,000 |
|
| $ | 37,475 |
|
| $ | — |
|
Derivatives not designated as hedging instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Other interest rate derivatives |
|
| 703,876 |
|
|
| 29,514 |
|
|
| (29,008 | ) |
|
| 545,346 |
|
|
| 18,093 |
|
|
| (17,817 | ) |
|
| 691,612 |
|
|
| 22,124 |
|
|
| (21,949 | ) |
|
| 706,126 |
|
|
| 19,447 |
|
|
| (19,345 | ) |
Other credit derivatives |
|
| 1,198 |
|
|
| — |
|
|
| — |
|
|
| 6,678 |
|
|
| — |
|
|
| — |
|
|
| 3,545 |
|
|
| 3 |
|
|
| — |
|
|
| 3,602 |
|
|
| 1 |
|
|
| — |
|
Total derivatives |
| $ | 1,355,074 |
|
| $ | 77,002 |
|
| $ | (30,641 | ) |
| $ | 1,102,024 |
|
| $ | 65,342 |
|
| $ | (17,817 | ) |
| $ | 1,345,157 |
|
| $ | 60,103 |
|
| $ | (22,531 | ) |
| $ | 1,359,728 |
|
| $ | 56,923 |
|
| $ | (19,345 | ) |
As of the effective time of the transaction reported in Note 3—Acquisition of a Business, Byline acquired and assumed two types of derivative instruments. Interest rate swap agreements previously designated as cash flow hedges of certain junior subordinated debentures issued to capital trusts had notional amounts of $42.0$42.0 million and had a fair value of $3.5$3.5 million included in accrued interest receivable and other assets. In July 2023, the Company terminated the interest rate swap agreements resultingthat resulted in a net gain of $6,000.$6,000. Other interest rate swap agreements not designated as hedging instruments had notional amounts of $67.7$67.7 million and fair values of $6.2$6.2 million reported in accrued interest receivable and other assets and accrued interest payable and other liabilities.
Interest rate swaps designated as cash flow hedges—Cash flow hedges of interest payments associated with certain financial instruments had notional amounts totaling $650.0$650.0 million as of September 30, 2023,March 31, 2024 and $550.0 million at December 31, 2022.2023, respectively. The Company assesses the effectiveness of each hedging relationship by comparing the changes in fair value of the derivatives hedging instrument with the fair value of the designated hedged transactions. As of September 30, 2023,March 31, 2024, the cash flow hedges aggregating $650.0$650.0 million in notional amounts are comprised of $450.0$450.0 million pay-fixed interest rate swaps associated with certain deposits and other borrowings, and $200.0$200.0 million receive-fixed interest rate swaps associated with certain variable rate loans.
As of September 30, 2023,March 31, 2024, pay-fixed interest rate swaps are comprised of six effective hedges. Receive-fixed interest rate swaps totaling $200.0$200.0 million are comprised of twothree effective hedges totaling $100.0$150.0 million, and two $50.0one $50.0 million forward-starting swaps that areis effective in March and August of 2024.
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 $4.6$4.8 million and $327,000$2.0 million of interest income recorded during the three months ended September 30,March 31, 2024, and 2023, and 2022, respectively, and is reported as a component of interest expense on deposits and other borrowings. Interest recorded on these swap transactions was $10.4 million and $8,000 interest income during the nine months ended September 30, 2023, and 2022, respectively. As of September 30, 2023,March 31, 2024, the Company estimates $18.6$16.9 million of the net unrealized gain to be reclassified as a net decrease to interest expense during the next twelve months.
Accumulated other comprehensive income 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 $100.0$100.0 million, of which $50.0$50.0 million became effective in May 2023 and $50.0$50.0 million became effective in June 2023. The transaction resulted in a gain of $4.2
41
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
$4.2 million, net of tax, which was the clean value at termination date and began amortizing as a decrease to interest expense on the effective dates. The remaining unamortized balance was $3.9$3.5 million and $15,000$3.7 million as of September 30, 2023March 31, 2024 and December 31, 2022,2023, respectively.
37
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 September 30, 2023:March 31, 2024:
Notional amounts |
| $ | 650,000 |
|
| $ | 650,000 |
|
Derivative assets fair value |
|
| 47,488 |
|
|
| 37,976 |
|
Derivative liabilities fair value |
|
| 1,633 |
|
|
| 582 |
|
Weighted average remaining maturity |
| 3.2 years |
|
| 2.7 Years |
| ||
Receive rates are determined at the time the swaps become effective. As of September 30, 2023,March 31, 2024, the weighted average pay rates of the six effective pay-fixed hedges for $450.0$450.0 million were 1.04%1.04% and the weighted average receive rates were 5.32%5.32%. As of September 30, 2023,March 31, 2024, the weighted average pay rates of the receive-fixed interest rate swaps of $100.0$150.0 million were 8.50%8.50% and the weighted average receive rates were 7.44%7.31%.
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 derivative instruments for the ninethree months ended:
|
| September 30, 2023 |
|
| September 30, 2022 |
| ||||||||||||||||||
|
| Amount of |
|
| Amount of |
|
| Amount of |
|
| Amount of |
|
| Amount of |
|
| Amount of |
| ||||||
Interest rate swaps |
| $ | 13,357 |
|
| $ | 10,381 |
|
| $ | — |
|
| $ | 45,088 |
|
| $ | 8 |
|
| $ | — |
|
|
| March 31, 2024 |
|
| March 31, 2023 |
| ||||||||||||||||||
|
| Amount of |
|
| Amount of |
|
| Amount of |
|
| Amount of |
|
| Amount of |
|
| Amount of |
| ||||||
Interest rate swaps |
| $ | 4,531 |
|
| $ | 4,836 |
|
| $ | — |
|
| $ | 194 |
|
| $ | 1,956 |
|
| $ | — |
|
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.
Other interest rate derivatives—The total combined notional amount was $703.9$691.6 million as of September 30, 2023March 31, 2024 with maturities ranging from MarchAugust 2024 to March 2033. The fair values of the interest rate derivative agreements are reflected in other assets and other liabilities with corresponding gains or losses reflected in non-interest income. During the three months ended September 30,March 31, 2024 and 2023, and 2022, there were $115,000$4,000 and $394,000$472,000 of net transaction fees, included in other non-interest income, related to these derivative instruments. During the nine months ended September 30, 2023 and 2022, there were $587,000 and $2.0 million of net transaction fees, respectively, included in other non-interest income, related to these derivative instruments.
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.
42
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 other interest rate derivatives as of September 30, 2023:March 31, 2024:
Notional amounts |
| $ | 703,876 |
|
| $ | 691,612 |
|
Derivative assets fair value |
|
| 29,514 |
|
|
| 22,124 |
|
Derivative liabilities fair value |
|
| 29,008 |
|
|
| 21,949 |
|
Weighted average pay rates |
|
| 4.28 | % |
|
| 4.29 | % |
Weighted average receive rates |
|
| 6.55 | % |
|
| 6.16 | % |
Weighted average remaining maturity |
| 4.9 years |
|
| 4.4 Years |
| ||
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 March 31, 2024 and December 31, 2023, for each period, the total notional amount of risk participated in was $1.2 million and the notional amount of risk participated out was $2.3 million and $2.4 million, respectively. The credit risk related to these other derivatives is managed through the Company’s loan underwriting process. The total notional amount was $1.2 million and $6.7 million as of September 30, 2023 and December 31, 2022, respectively. Additionally, the Company enters into foreign currency contracts to manage foreign exchange risk associated with certain customer foreign currency transactions. These transactions were not material to the consolidated financial statements as of September 30, 2023March 31, 2024 and December 31, 2022.2023. The fair values of the credit derivatives is reflected in
38
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
accrued interest receivable and other assets and accrued interest payable and other liabilities with corresponding gains or losses reflected in non-interest income or other comprehensive income.
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 three and nine months ended September 30, 2023March 31, 2024 and 2022:2023:
|
| Three Months Ended |
|
| Nine Months Ended |
|
| Three Months Ended |
| |||||||||||||||
|
| September 30, |
|
| September 30, |
|
| March 31, |
| |||||||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||||
Other interest rate derivatives |
| $ | 423 |
|
| $ | 233 |
|
| $ | 230 |
|
| $ | 801 |
|
| $ | (73 | ) |
| $ | (308 | ) |
Other credit derivatives |
|
| — |
|
|
| 1 |
|
|
| — |
|
|
| 6 |
|
|
| — |
|
|
| — |
|
Total |
| $ | 423 |
|
| $ | 234 |
|
| $ | 230 |
|
| $ | 807 |
|
| $ | (73 | ) |
| $ | (308 | ) |
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. The table below summarizes the Company’s interest rate derivatives and offsetting positions as of:of the periods indicated:
|
| September 30, 2023 |
|
| December 31, 2022 |
|
| March 31, 2024 |
|
| December 31, 2023 |
| ||||||||||||||||||||
|
| Derivative |
|
| Derivative |
|
| Derivative |
|
| Derivative |
|
| Derivative |
|
| Derivative |
|
| Derivative |
|
| Derivative |
| ||||||||
Gross amounts recognized |
| $ | 77,002 |
|
| $ | (30,641 | ) |
| $ | 65,342 |
|
| $ | (17,817 | ) |
| $ | 60,103 |
|
| $ | (22,531 | ) |
| $ | 56,923 |
|
| $ | (19,345 | ) |
Less: Amounts offset in the Condensed Consolidated |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Net amount presented in the Condensed Consolidated |
| $ | 77,002 |
|
| $ | (30,641 | ) |
| $ | 65,342 |
|
| $ | (17,817 | ) |
| $ | 60,103 |
|
| $ | (22,531 | ) |
| $ | 56,923 |
|
| $ | (19,345 | ) |
Gross amounts not offset in the Condensed Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Offsetting derivative positions |
|
| (1,639 | ) |
|
| 1,639 |
|
|
| (43 | ) |
|
| 43 |
|
|
| (880 | ) |
|
| 880 |
|
|
| (925 | ) |
|
| 925 |
|
Collateral posted |
|
| (75,363 | ) |
|
| — |
|
|
| (64,370 | ) |
|
| — |
|
|
| (57,900 | ) |
|
| — |
|
|
| (54,930 | ) |
|
| — |
|
Net credit exposure |
| $ | — |
|
| $ | (29,002 | ) |
| $ | 929 |
|
| $ | (17,774 | ) |
| $ | 1,323 |
|
| $ | (21,651 | ) |
| $ | 1,068 |
|
| $ | (18,420 | ) |
As of September 30, 2023,March 31, 2024, 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 $30.6$22.5 million. If the Company had breached any of these provisions at September 30, 2023,March 31, 2024, it could have been required to settle its obligations under the agreements at their
43
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
termination value less offsetting positions of $1.6 million.$880,000. For purposes of this disclosure, the amount of posted collateral by the Company and counterparties is limited to the amount offsetting the derivative asset and derivative liability.
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 2,600,000 shares of our common stock have been reserved for issuance under the Omnibus Plan. As of September 30, 2023,March 31, 2024, there were 1,180,903826,874 shares available for future grants under the Omnibus Plan.
The Company primarily grants time-based restricted share awards that vest over a one to four year period, subject to continued employment. The Company also grants performance-based restricted share awards. The number of shares which may be earned under the award is dependent upon the Company’s return on average assets, weighted equally over a three-year period and measured against a peer group consisting of publicly-traded bank holding companies. Results will be measured cumulatively at the end of the three years. Any earned shares will vest on the third anniversary of the grant date.
During 2023,2024, the Company granted 299,197347,492 shares of restricted common stock, par value $0.01$0.01 per share. Of this total, 6,113 restricted shares will vest in one year268,595, 206,414 restricted shares will vest ratably overthree years on each anniversary of the grant date and 35,288 restricted shares will cliff vest on the third anniversary of the grant date, all subject to continued employment. In addition, 51,382 performance-based shares were granted. The number of performance-based shares which may be earned under the award is dependent upon the Company's total stockholder return and return on average assets, weighted equally, over a three-year12,861 period ending December 31, 2025, measured against the KBW Regional Bank Index. Results will be measured cumulatively at the end of the three years and any earned shares will vest on the third anniversary of the grant date.restricted
The following table discloses the changes in restricted shares for the nine months ended September 30, 2023:39
|
| Omnibus Plan |
| |||||
|
| Number of Shares |
|
| Weighted Average |
| ||
Beginning balance, January 1, 2023 |
|
| 581,337 |
|
| $ | 22.93 |
|
Granted |
|
| 299,197 |
|
|
| 24.42 |
|
Incremental performance shares vested |
|
| 1,826 |
|
|
|
| |
Vested |
|
| (191,277 | ) |
|
| 21.44 |
|
Forfeited |
|
| (15,861 | ) |
|
| 23.96 |
|
Ending balance outstanding at September 30, 2023 |
|
| 675,222 |
|
| $ | 23.97 |
|
A total of 191,277 restricted shares vested during the nine months ended September 30, 2023. A total of 243,603 restricted shares vested during the year ended December 31, 2022. The fair value of restricted shares that vested during the nine months ended September 30, 2023 was $4.6 million. The fair value of restricted shares that vested during the year ended December 31, 2022 was $5.9 million.
The Company recognizes share-based compensation based on the estimated fair value of the restricted stock at the grant date. The fair value of the total stock return performance-based awards granted in 2023 were calculated based on a Monte Carlo simulation, using expected volatilities between 38.11% and 39.80%, a risk-free rate of 4.42%, and a simulation term of 2.85 years. Based on the equal weighing of total stock return and return on average assets, the grant date fair value of the performance based awards was $25.20 per share. Share-based compensation expense is included in non-interest expense in the Condensed Consolidated Statements of Operations.
44
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
shares will cliff vest on the third anniversary of the grant date, all subject to continued employment. In addition, 66,036 performance-based restricted shares were included in the 2024 grant. The number of performance-based shares which may be earned under the award is dependent upon the Company’s total stockholder return and return on average assets, weighted equally, over a three-year period ending December 31, 2026, measured against the KBW Regional Bank Index. Results will be measured cumulatively at the end of the three years and any earned shares will vest on the third anniversary of the grant date.
The following table discloses the changes in restricted shares for the three months ended March 31, 2024:
|
| Omnibus Plan |
| |||||
|
| Number of Shares |
|
| Weighted Average |
| ||
Beginning balance, January 1, 2024 |
|
| 627,271 |
|
| $ | 24.24 |
|
Granted |
|
| 347,492 |
|
|
| 20.89 |
|
Incremental performance shares issued and vested |
|
| 13,632 |
|
|
|
| |
Vested |
|
| (228,195 | ) |
|
| 22.66 |
|
Forfeited |
|
| (6,505 | ) |
|
| 25.88 |
|
Ending balance outstanding at March 31, 2024 |
|
| 753,695 |
|
| $ | 23.07 |
|
A total of 228,195 restricted shares vested during the three months ended March 31, 2024. A total of 238,638 restricted shares vested during the year ended December 31, 2023. The fair value of restricted shares that vested during the three months ended March 31, 2024 was $4.8 million. The fair value of restricted shares that vested during the year ended December 31, 2023 was $5.7 million.
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. The fair value of the total stock return performance-based awards granted in 2024 and 2023 were calculated based on a Monte Carlo simulation, using the following assumptions:
|
| Performance Based Grants |
| |||||
|
| 2024 |
|
| 2023 |
| ||
Risk-free interest rate |
|
| 4.47 | % |
|
| 4.42 | % |
Expected term (years) |
| 2.85 years |
|
| 2.85 years |
| ||
Expected stock price volatility |
| 29.28% - 33.68% |
|
| 38.11% - 39.80% |
| ||
Weighted average grant date fair value |
| $ | 20.18 |
|
| $ | 25.20 |
|
40
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 summarizes restricted stock compensation expense for the ninethree months ended September 30, 2023March 31, 2024 and 2022:2023:
|
| Nine Months Ended September 30, |
|
| Three Months Ended March 31, |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||
Total share-based compensation - restricted stock |
| $ | 4,922 |
|
| $ | 4,016 |
|
| $ | 1,846 |
|
| $ | 1,510 |
|
Income tax benefit |
|
| 1,322 |
|
|
| 1,139 |
|
|
| 511 |
|
|
| 406 |
|
Unrecognized compensation expense |
|
| 11,189 |
|
|
| 10,479 |
|
|
| 14,880 |
|
|
| 14,416 |
|
Weighted average remaining amortization period |
| 2.1 years |
|
| 2.5 years |
|
| 2.3 Years |
|
| 2.5 years |
| ||||
The fair value of the unvested restricted stock awards at September 30, 2023March 31, 2024 was $13.3$16.4 million.
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 2,476,122 shares. The Company granted 1,846,968 options to purchase shares under this plan. In June 2017, the Board of Directors terminated the BYB Plan and no future grants can be made under this plan. Options to purchase a total of 554,070 shares remain outstanding under the BYB Plan at March 31, 2024.
The types of stock options granted under the BYB Plan were Time Options and Performance Options. The exercise price of each option is equal to the fair value of the stock as of the date of grant. These option awards have vesting periods ranging from one to five years and have 10-year contractual terms. Stock volatility was computed as the average of the volatilities of peer group companies. All outstanding stock options were fully vested and exercisable at March 31, 2024.
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 three months ended March 31, 2024:
|
| BYB Plan |
| |||||||||||||
|
| Number of Shares |
|
| Weighted Average Exercise Price |
|
| Intrinsic |
|
| Weighted Average Remaining Contractual Term (in Years) |
| ||||
Beginning balance, January 1, 2024 |
|
| 768,564 |
|
| $ | 11.31 |
|
| $ | 9,413 |
|
|
| 1.5 |
|
Exercised |
|
| (214,494 | ) |
|
| 11.18 |
|
| $ | 2,587 |
|
|
|
| |
Expired |
|
| — |
|
|
|
|
|
|
|
|
|
| |||
Ending balance outstanding at March 31, 2024 |
|
| 554,070 |
|
| $ | 11.36 |
|
| $ | 5,738 |
|
|
| 1.2 |
|
Exercisable at March 31, 2024 |
|
| 554,070 |
|
| $ | 11.36 |
|
| $ | 5,738 |
|
|
| 1.2 |
|
A total of 214,494 stock options were exercised during the three months ended March 31, 2024. The exercise was cashless and had a related tax benefit of $690,000 for the three months ended March 31, 2024. No stock options were exercised during the during the year ended December 31, 2023. No stock options vested during the three months ended March 31, 2024 or the year ended December 31, 2023. No stock option compensation expense was recognized for the three months ended March 31, 2024 or the year ended December 31, 2023.
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 901,086657,205 and 986,757930,852 shares of common stock were outstanding as of September 30,March 31, 2024 and 2023, and 2022, respectively. There were 675,222753,695 and 628,5423693,104 restricted stock awards outstanding at September 30,March 31, 2024 and 2023, and 2022, respectively. For the three and nine months ended September 30,March 31, 2024 and 2023, and 2022, no stock options outstanding were excluded from the calculation of diluted earnings per common share.
The following represent the calculation of basic and diluted earnings per share for the periods presented:41
|
| Three Months Ended |
|
| Nine Months Ended |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Net income |
| $ | 28,222 |
|
| $ | 22,656 |
|
| $ | 78,274 |
|
| $ | 65,250 |
|
Less: Dividends on preferred shares |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 196 |
|
Net income available to common stockholders |
| $ | 28,222 |
|
| $ | 22,656 |
|
| $ | 78,274 |
|
| $ | 65,054 |
|
Weighted-average common stock outstanding: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted-average common stock outstanding (basic) |
|
| 43,025,927 |
|
|
| 36,851,973 |
|
|
| 39,027,450 |
|
|
| 37,012,316 |
|
Incremental shares |
|
| 432,183 |
|
|
| 519,186 |
|
|
| 435,402 |
|
|
| 569,550 |
|
Weighted-average common stock outstanding (dilutive) |
|
| 43,458,110 |
|
|
| 37,371,159 |
|
|
| 39,462,852 |
|
|
| 37,581,866 |
|
Basic earnings per common share |
| $ | 0.66 |
|
| $ | 0.61 |
|
| $ | 2.01 |
|
| $ | 1.76 |
|
Diluted earnings per common share |
| $ | 0.65 |
|
| $ | 0.61 |
|
| $ | 1.98 |
|
| $ | 1.73 |
|
Note 19—Stockholders’ Equity
A summary of the Company’s preferred and common stock at September 30, 2023 and December 31, 2022 is as follows:
|
| September 30, |
|
| December 31, |
| ||
|
| 2023 |
|
| 2022 |
| ||
Preferred stock |
|
|
|
|
|
| ||
Par value |
| $ | 0.01 |
|
| $ | 0.01 |
|
Shares authorized |
|
| 25,000,000 |
|
|
| 25,000,000 |
|
Shares issued |
|
| — |
|
|
| — |
|
Shares outstanding |
|
| — |
|
|
| — |
|
Common stock, voting |
|
|
|
|
|
| ||
Par value |
| $ | 0.01 |
|
| $ | 0.01 |
|
Shares authorized |
|
| 150,000,000 |
|
|
| 150,000,000 |
|
Shares issued |
|
| 45,694,456 |
|
|
| 39,518,702 |
|
Shares outstanding |
|
| 43,719,203 |
|
|
| 37,492,775 |
|
Treasury shares |
|
| 1,975,253 |
|
|
| 2,025,927 |
|
45
BYLINE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table dollars in thousands, except share and per share data) (Unaudited)
During 2016,The following represent the Company authorizedcalculation of basic and issued Series B 7.50% fixed-to-floating non-voting, noncumulative perpetual preferred stock with a liquidation preference of $1,000diluted earnings per share plusfor the amountperiods presented:
|
| Three Months Ended |
| |||||
|
| 2024 |
|
| 2023 |
| ||
Net income |
| $ | 30,440 |
|
| $ | 23,945 |
|
Weighted-average common stock outstanding: |
|
|
|
|
|
| ||
Weighted-average common stock outstanding (basic) |
|
| 43,258,087 |
|
|
| 36,955,085 |
|
Incremental shares |
|
| 469,257 |
|
|
| 584,827 |
|
Weighted-average common stock outstanding (dilutive) |
|
| 43,727,344 |
|
|
| 37,539,912 |
|
Basic earnings per common share |
| $ | 0.70 |
|
| $ | 0.65 |
|
Diluted earnings per common share |
| $ | 0.70 |
|
| $ | 0.64 |
|
Note 19—Stockholders’ Equity
A summary of unpaid dividends, if any, which was redeemable at the Company’s option on or afterpreferred and common stock at March 31, 2022. Holders of Series B Preferred Stock did not have any rights to convert such stock into shares of any other class of capital stock of the Company. Holders of Series B Preferred Stock were entitled to receive a fixed dividend of 7.50% per annum from the original issue date through 2024 and December 30, 2021.31, 2023 is as follows:
On February 15, 2022, the Company gave notice of its intention to redeem all of its outstanding shares of the Series B Preferred Stock (the “Preferred Stock Redemption”). The Preferred Stock Redemption was in accordance with the terms of the Certificate of Designations of the Series B Preferred Stock dated as of June 16, 2017 (the “Certificate of Designation”). On March 31, 2022, the Company redeemed all 10,438 outstanding shares of Series B Preferred Stock. Under the Certificate of Designations, the per share redemption price was the liquidation preference of $1,000 per share plus an amount equal to any declared and unpaid dividends thereon for any prior dividend period and totaled $10.6 million.
For the nine months ended September 30, 2022, we declared and paid dividends on the Series B preferred stock of $196,000.
|
| March 31, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
Preferred stock |
|
|
|
|
|
| ||
Par value |
| $ | 0.01 |
|
| $ | 0.01 |
|
Shares authorized |
|
| 25,000,000 |
|
|
| 25,000,000 |
|
Shares issued |
|
| — |
|
|
| — |
|
Shares outstanding |
|
| — |
|
|
| — |
|
Common stock, voting |
|
|
|
|
|
| ||
Par value |
| $ | 0.01 |
|
| $ | 0.01 |
|
Shares authorized |
|
| 150,000,000 |
|
|
| 150,000,000 |
|
Shares issued |
|
| 45,946,804 |
|
|
| 45,714,241 |
|
Shares outstanding |
|
| 44,108,387 |
|
|
| 43,764,056 |
|
Treasury shares |
|
| 1,838,417 |
|
|
| 1,950,185 |
|
On December 10, 2020,12, 2022, we announced that our Board of Directors approved a stock repurchase program authorizing the purchase of up to an aggregate of 1,250,000 shares of our outstanding common stock, and on July 27, 2021, our Board of Directors authorized an expansion of the stock repurchase program. Under the extended program, we were authorized to repurchase an additional 1,250,000 shares of our outstanding common stock. This repurchaseThe program expired onwas in effect from January 1, 2023 until December 31, 2022.2023. No shares were repurchased under this program.
On December 12, 2022,6, 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 ourthe Company’s outstanding common stock. The program is in effect from January 1, 20232024 until December 31, 20232024, 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 areThe Company is 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 managementthe Company at its discretion and will depend on a number of factors, including the market price of ourthe Company’s stock, general market and economic conditions and applicable legal requirements. The shares authorized to be repurchased represented approximately 2.9% of the Company’s outstanding common stock at December 31, 2023.
We did notnot purchase any shares under theeither stock repurchase program during the three or nine months ended September 30,March 31, 2024 or 2023. We purchased 174,249 shares at a cost of $4.2 million under this program during the three months ended September 30, 2022. We purchased 689,068 shares at a cost of $17.3 million under this program during the nine months ended September 30, 2022.
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 each of the three months ended September 30,March 31, 2024 and 2023, and 2022, cash dividends were declared and paid to stockholders of record of our common stock of $0.09 per share. For the nine months ended September 30, 2023 and 2022, cash dividends were declared and paid to stockholders of record of our common stock of $0.27$0.09 per share.
On July 1, 2023, we issued 5,932,323 of shares of our common stock in connection with our acquisition of Inland. Please see Note 3—Acquisition of a Business for more information.
On October 24, 2023,April 23, 2024, our Board of Directors declared a cash dividend of $0.09$0.09 per share payable on NovemberMay 21, 20232024 to stockholders of record of our common stock as of NovemberMay 7, 20232024.
4642
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 ninethree months ended September 30, 2023March 31, 2024 and 2022:2023:
(dollars in thousands) |
| Unrealized Gains |
|
| Unrealized Losses |
|
| Total Accumulated |
|
| Unrealized Gains |
|
| Unrealized Losses |
|
| Total Accumulated |
| ||||||
Balance, January 1, 2022 |
| $ | 2,817 |
|
| $ | (11,119 | ) |
| $ | (8,302 | ) | ||||||||||||
Other comprehensive income (loss), net of tax |
|
| 32,850 |
|
|
| (149,446 | ) |
|
| (116,596 | ) | ||||||||||||
Balance, September 30, 2022 |
| $ | 35,667 |
|
| $ | (160,565 | ) |
| $ | (124,898 | ) | ||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||
Balance, January 1, 2023 |
| $ | 34,315 |
|
| $ | (151,865 | ) |
| $ | (117,550 | ) |
| $ | 34,315 |
|
| $ | (151,865 | ) |
| $ | (117,550 | ) |
Other comprehensive income (loss), net of tax |
|
| 2,181 |
|
|
| (26,790 | ) |
|
| (24,609 | ) |
|
| (1,291 | ) |
|
| 10,699 |
|
|
| 9,408 |
|
Balance, September 30, 2023 |
| $ | 36,496 |
|
| $ | (178,655 | ) |
| $ | (142,159 | ) | ||||||||||||
Balance, March 31, 2023 |
| $ | 33,024 |
|
| $ | (141,166 | ) |
| $ | (108,142 | ) | ||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||
Balance, January 1, 2024 |
| $ | 30,131 |
|
| $ | (130,248 | ) |
| $ | (100,117 | ) | ||||||||||||
Other comprehensive loss, net of tax |
|
| (223 | ) |
|
| (6,570 | ) |
|
| (6,793 | ) | ||||||||||||
Balance, March 31, 2024 |
| $ | 29,908 |
|
| $ | (136,818 | ) |
| $ | (106,910 | ) | ||||||||||||
4743
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:
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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, 2022,2023 that was filed with the SEC on March 7, 20234, 2024, 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, New Jersey, 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 Small Business Administration (“SBA”)SBA loans and was the fifth most active SBA lender in the country and was thesecond most active 7(a) and 504 lender in Illinois for the fiscal yearquarter ended September 30, 2023.March 31, 2024.
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.
We reported consolidated net income of $28.2$30.4 million, or $0.70 per basic and $78.3 milliondiluted common share, for the three and nine months ended September 30, 2023,March 31, 2024, compared to net income of $22.7$23.9 million, or $0.65 per basic and $65.2 million$0.64 per diluted common share, for the three and nine months ended September 30, 2022,March 31, 2023, an increase of $5.6 million and $13.0 million, respectively, for each comparable period.$6.5 million. The increase in net income was attributable to a $23.6 million and $55.1$9.8 million increase in net interest income. The increase in net interest income during the three and nine months ended September 30, 2023March 31, 2024 was primarily driven by higher yields on loans and leases, and organic growth in the loan and lease portfolio.portfolio, as well as from the Inland acquisition.
Dividends declared and paid on preferred shares were $196,000 for the nine months ended September 30, 2022. Dividends declared on common shares were $3.9 million and $3.4 million for the three months ended September 30,March 31, 2024 and 2023, and 2022, respectively. Dividends paid on common shares were $4.1$3.9 million and $3.3 million for the three months ended September 30,March 31, 2024 and 2023, and 2022, respectively. Dividends declared on common shares were $10.7 million and $10.2 million for the nine months ended September 30, 2023 and 2022, respectively.
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Dividends paid on common shares were $10.7 million and $10.1 million for the nine months ended September 30, 2023 and 2022, respectively.
For the three months ended September 30, 2023 and 2022, net income available to common stockholders was $28.2 million, or $0.66 per basic and $0.65 per diluted common share, and $22.7 million, or $0.61 per basic and diluted common share, respectively. For the nine months ended September 30, 2023 and 2022, net income available to common stockholders was $78.3 million, or $2.01 per basic and $1.98 per diluted common share, and $65.1 million, or $1.76 per basic and $1.73 per diluted common share, respectively.
Our results of operations for the three months ended September 30,March 31, 2024 and 2023 and 2022 yielded an annual return on average assets of 1.30%1.36% and 1.26%1.32% and a return on average stockholders’ equity of 12.11%12.26% and 11.74%12.38% respectively. Our results of operations for the nine months ended September 30, 2023 and 2022 yielded an annual return on average assets of 1.34% and 1.26% and a return on average stockholders’ equity of 12.48% and 10.96%, respectively.
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As of September 30, 2023,March 31, 2024, we had consolidated total assets of $8.9$9.4 billion, total gross loans and leases outstanding of $6.6$6.8 billion, total deposits of $7.0$7.4 billion, and total stockholders’ equity of $919.9 million.$1.0 billion.
Inland Bancorp, Inc. Acquisition
On July 1, 2023, we completed our acquisition of Inland Bancorp, Inc., ("Inland") under the terms of a definitive merger agreement. As a result of the merger, Inland's wholly owned bank subsidiary, Inland Bank and Trust, was merged with and into Byline Bank. Refer to Note 3—Acquisition of a Business of our Unaudited Interim Condensed Financial Statements as of September 30, 2023,March 31, 2024, which is included in this report, for additional information.
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; andnotes, 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 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) acquisition-related fair value computations, (ii)determination of the carrying value of loans and leases, (iii) determining the provision and allowance for credit losses, (iv)(ii) the valuation of intangible assets such as goodwill, servicing assets and core deposit intangibles, (v)assessment of impairment, (iii) fair value estimations, and (iv) the determination and assessment of fair valueimpairment for financial instruments and (vi) the valuation of or recognition of deferred tax assets and liabilities.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, 2022,2023, that we filed with the SEC on March 7, 2023.4, 2024.
Business Combinations
We account for business combinations under the acquisition method of accounting in accordance with ASC 805. We recognize the fair value of the assets acquired and liabilities assumed as of the date of acquisition, with any excess of the fair value of consideration provided over the fair value of the identifiable net tangible and intangible assets acquired recorded as goodwill. Transaction costs are expensed as incurred. Application of the acquisition method requires extensive use of accounting estimates and judgments to determine the fair values of the identifiable assets acquired and liabilities assumed at the acquisition date.
In accordance with ASC 805, the acquiring company retains the right to make appropriate adjustments to the assets and liabilities of the acquired entity for information obtained during the measurement period about facts and circumstances that existed as of the acquisition date. The measurement period ends as of the earlier of (i) one year from the acquisition date or (ii) the date when the acquirer receives the information necessary to complete the business combination accounting.
Carrying Value of Loans and Leases
Our accounting methods for loans and leases differ depending on whether they are new or acquired loans and leases; and for acquired loans, whether the loans were acquired at a discount as a result of credit deterioration since the date of origination.
Originated Loans and Leases
We account for originated loans and leases and purchased loans and leases not acquired through business combinations as originated loans and leases. Newly originated loans that management has the intent and ability to hold for the foreseeable future are reported at their outstanding principal balances net of any allowance for credit losses, unamortized deferred fees and costs, and unamortized premiums or discounts. The net amount of nonrefundable loan origination fees and certain direct costs associated with the loan origination process are
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deferred and amortized to interest income over the contractual lives of the new loans using methods that approximate the level yield method. Discounts and premiums are amortized or accreted to interest income over the estimated term of the new loans using methods that approximate the effective yield method. Interest income on new loans is accrued based on the unpaid principal balance outstanding. Additionally, once an acquired loan reaches its contractual maturity date, it is re-underwritten, and if renewed, it is classified as an originated loan.
Purchased credit deteriorated loans and leases
Purchased credit deteriorated ("PCD") loans are loans that have experienced more than insignificant credit deterioration since origination. PCD loans are recorded at the amount paid. An allowance for credit losses is determined using the same methodology as other loans held for investment. The initial allowance for credit losses determined on a collective basis is allocated to individual loans. The difference between the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through credit loss expense.
Acquired non-credit-deteriorated loans and leases
For acquired non‑credit-deteriorated loans and leases, the difference between the fair value and unpaid principal balance of the loan at the acquisition date is amortized or accreted to interest income over the life of the loan. While credit discounts are included in the determination of the fair value for non-credit-deteriorated loans, since these discounts are expected to be accreted over the life of the loans, they cannot be used to offset the allowance for credit losses that must be recorded at the acquisition date. As a result, an allowance for credit losses is determined at the acquisition date using the same methodology as other loans held for investment and is recognized as a provision for credit losses in the consolidated statements of operations. Any subsequent deterioration (improvement) in credit quality is recognized by recording a provision (recapture) for credit losses.
Provision and allowanceAllowance for credit losses
The provision for credit losses reflects the amount required to maintain the allowance for credit losses (“ACL”("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.
The ACL is maintained at a level management believes is sufficient to provide for current expected credit losses based upon an ongoing review of the loan and lease portfolios by portfolio category, which includes consideration of actual loss experience, peer loss experience, changes in the size and risk profile of the portfolio, identification of individual problem loan and lease situations that may affect a borrower’s ability to repay, reasonable and supportable forecasts, and evaluation of prevailing economic conditions. We use risk ratings as credit indicators to classify loans and leases into pools and to estimate loss rates for each of the loan and lease pools. Additional information about these policies can be found in Note 5 of our Unaudited Interim Condensed Consolidated Financial Statements as of September 30, 2023, included in this report.
For each portfolio, management estimates expected credit losses over the life of each loan and lease utilizing lifetime or cumulative loss rate methodology, which identifies macroeconomic factors and asset-specific characteristics that are correlated with credit loss experience including loan age, loan type, and leverage. The lifetime loss rate is applied to the amortized cost of the loan or lease. This methodology builds on default and loss probabilities by utilizing pool-specific historical loss rates to calculate expected credit losses. These pool-specific historical loss rates may be adjusted for a forecast of certain macroeconomic variables, and other factors such as differences in underwriting standards, or portfolio mix. Each time we measure expected credit losses, management assesses the relevancy of historical loss information and considers any necessary adjustments to address any differences in asset-specific characteristics.
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, such asprimarily unemployment rates, gross domestic product, or commercial property values, 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 acquired loans and leases and originated loans and leases of $500,000 or greater with an internal risk rating of substandard or below, or on nonaccrual as well as loans classified as Troubled Debt Restructurings,status are reviewed individually evaluated for impairment on a quarterly basis.
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The Company also maintains an allowance for credit losses on off-balance sheet credit exposures for unfunded loan commitments. This allowance is reflected as a component of other liabilities that represents management’s current estimate of expected losses in the 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. The Company also evaluates its held-to-maturity debt securities for current expected credit losses.
Goodwill and Other Intangible Assets
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
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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.
Servicing Assets. ServicingOther intangible assets are recognized separately when they are acquired through sales of loans or when the rights to service loans are purchased. When loans are sold with servicing rights retained, servicing assets are recorded at fair value in accordance with ASC Topic 860, Transfers and Servicing (“ASC 860”). Fair value is based on market prices for comparable servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. 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. See Note 6 and Note 15 of our Unaudited Interim Condensed Consolidated Financial Statements as of September 30, 2023, included in this report, for additional information.
Core Deposit Intangible Assets. Other intangible assets primarily consist of core deposit intangible assets.assets and customer relationship intangible. In valuing core deposit intangibles,intangible assets, we consider variables such as deposit servicing costs, attrition rates and market discount rates. Core deposit intangiblesIntangible 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 core deposit intangiblesintangible 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 intangible assets are amortized over the revised remaining useful life. Core deposit intangibles are currently amortized over an approximate ten-year period.
Customer Relationship Intangible. Other intangible assets also include ourperiod and customer relationship intangible asset. In valuing our customer relationship intangibles, we consider variables such as assets under administration, attrition rates, and fee structure. Customer relationship intangibles are currently amortized over a 12-yeartwelve-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 September 30, 2023,March 31, 2024, included in this report, for a complete discussion of our use of fair value of financial assets and liabilities and their related measurement practices.
Income Taxes
We use the asset and liability method to account for income taxes. The objective of the asset and liability method is to establish deferred tax assets and liabilities for the temporary differences between the financial reporting basis and the income tax basis of our assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. Our annual tax rate is based on our income, statutory tax rates and available tax planning opportunities. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties.
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Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets arise because of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as from net operating loss carryforwards. We review our deferred tax positions quarterly for changes that may impact realizability. We evaluate the recoverability of these future tax deductions by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. We use short and long‑range business forecasts to provide additional information for its evaluation of the recoverability of deferred tax assets. It is our policy to recognize interest and penalties associated with uncertain tax positions, if applicable, as components of non‑interest expense.
A deferred tax valuation allowance is established to reduce the net carrying amount of deferred tax assets if it is determined to be more likely than not that all or some of the deferred tax asset will not be realized. See Note 11 of the notes to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2022, for further information on income taxes.
Recently Issued Accounting Pronouncements
Refer to Note 2 of our Unaudited Interim Condensed Consolidated Financial Statements as of September 30, 2023,March 31, 2024, 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.
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Selected Financial Data
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| As of or for the Three Months Ended |
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| As of or For the Nine Months Ended |
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| As of or for the Three Months Ended |
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| September 30, |
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| September 30, |
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| March 31, |
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(dollars in thousands, except share and per share data) |
| 2023 |
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| 2022 |
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| 2023 |
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| 2022 |
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| 2024 |
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| 2023 |
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Summary of Operations |
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Common Share Data |
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Basic earnings per common share |
| $ | 0.66 |
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| $ | 0.61 |
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| $ | 2.01 |
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| $ | 1.76 |
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| $ | 0.70 |
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| $ | 0.65 |
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Diluted earnings per common share |
| $ | 0.65 |
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| $ | 0.61 |
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| $ | 1.98 |
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| $ | 1.73 |
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| $ | 0.70 |
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| $ | 0.64 |
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Adjusted diluted earnings per share(1)(3) |
| $ | 0.77 |
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| $ | 0.61 |
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| $ | 2.15 |
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| $ | 1.73 |
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| $ | 0.70 |
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| $ | 0.65 |
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Weighted-average common shares outstanding (basic) |
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| 43,025,927 |
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| 36,851,973 |
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| 39,027,450 |
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| 37,012,316 |
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| 43,258,087 |
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| 36,955,085 |
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Weighted-average common shares outstanding (diluted) |
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| 43,458,110 |
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| 37,371,159 |
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| 39,462,852 |
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| 37,581,866 |
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| 43,727,344 |
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| 37,539,912 |
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Common shares outstanding |
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| 43,719,203 |
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| 37,465,902 |
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| 43,719,203 |
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| 37,465,902 |
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| 44,108,387 |
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| 37,713,427 |
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Cash dividends per common share |
| $ | 0.09 |
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| $ | 0.09 |
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| $ | 0.27 |
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| $ | 0.27 |
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| $ | 0.09 |
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| $ | 0.09 |
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Dividend payout ratio on common stock |
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| 13.85 | % |
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| 14.75 | % |
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| 13.64 | % |
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| 15.61 | % |
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| 12.86 | % |
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| 14.06 | % |
Book value per common share |
| $ | 21.04 |
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| $ | 19.95 |
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| $ | 21.04 |
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| $ | 19.95 |
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| $ | 22.88 |
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| $ | 21.10 |
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Tangible book value per common share(1) |
| $ | 16.35 |
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| $ | 15.67 |
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| $ | 16.35 |
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| $ | 15.67 |
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| $ | 18.29 |
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| $ | 16.92 |
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Key Ratios and Performance Metrics (annualized |
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Net interest margin |
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| 4.46 | % |
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| 4.04 | % |
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| 4.39 | % |
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| 3.87 | % |
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| 4.00 | % |
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| 4.38 | % |
Net interest margin, fully taxable equivalent (1)(4) |
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| 4.47 | % |
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| 4.05 | % |
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| 4.40 | % |
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| 3.88 | % |
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| 4.01 | % |
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| 4.39 | % |
Average cost of deposits |
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| 2.13 | % |
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| 0.43 | % |
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| 1.70 | % |
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| 0.22 | % |
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| 2.56 | % |
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| 1.15 | % |
Efficiency ratio(2) |
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| 53.75 | % |
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| 55.11 | % |
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| 52.96 | % |
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| 55.12 | % |
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| 51.94 | % |
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| 52.10 | % |
Adjusted efficiency ratio(1)(2)(3) |
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| 47.35 | % |
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| 55.11 | % |
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| 49.96 | % |
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| 55.12 | % |
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| 51.75 | % |
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| 51.54 | % |
Non-interest income to total revenues(1) |
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| 11.81 | % |
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| 14.83 | % |
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| 14.61 | % |
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| 19.41 | % |
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| 15.32 | % |
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| 16.67 | % |
Non-interest expense to average assets |
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| 2.66 | % |
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| 2.56 | % |
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| 2.67 | % |
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| 2.59 | % |
|
| 2.40 | % |
|
| 2.69 | % |
Adjusted non-interest expense to average assets(1)(3) |
|
| 2.35 | % |
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| 2.56 | % |
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| 2.53 | % |
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| 2.59 | % |
|
| 2.39 | % |
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| 2.67 | % |
Return on average stockholders' equity |
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| 12.11 | % |
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| 11.59 | % |
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| 12.48 | % |
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| 10.96 | % |
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| 12.26 | % |
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| 12.38 | % |
Adjusted return on average stockholders' equity(1)(3) |
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| 14.30 | % |
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| 11.59 | % |
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| 13.54 | % |
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| 10.96 | % |
|
| 12.31 | % |
|
| 12.62 | % |
Return on average assets |
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| 1.30 | % |
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| 1.26 | % |
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| 1.34 | % |
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| 1.26 | % |
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| 1.36 | % |
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| 1.32 | % |
Adjusted return on average assets(1)(3) |
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| 1.53 | % |
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| 1.26 | % |
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| 1.46 | % |
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| 1.26 | % |
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| 1.36 | % |
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| 1.35 | % |
Pre-tax pre-provision return on average assets(1) |
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| 2.16 | % |
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| 1.93 | % |
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| 2.23 | % |
|
| 1.93 | % |
|
| 2.10 | % |
|
| 2.32 | % |
Adjusted pre-tax pre-provision return on average assets(1)(3) |
|
| 2.46 | % |
|
| 1.93 | % |
|
| 2.38 | % |
|
| 1.93 | % |
|
| 2.11 | % |
|
| 2.35 | % |
Return on average tangible common stockholders' equity(1) |
|
| 16.15 | % |
|
| 15.40 | % |
|
| 16.37 | % |
|
| 14.60 | % |
|
| 15.88 | % |
|
| 16.20 | % |
Adjusted return on average tangible common |
|
| 18.95 | % |
|
| 15.40 | % |
|
| 17.72 | % |
|
| 14.60 | % |
|
| 15.95 | % |
|
| 16.49 | % |
Non-interest-bearing deposits to total deposits |
|
| 28.18 | % |
|
| 38.17 | % |
|
| 28.18 | % |
|
| 38.17 | % |
|
| 25.19 | % |
|
| 33.58 | % |
Loans and leases held for sale and loans and leases |
|
| 95.21 | % |
|
| 94.60 | % |
|
| 95.21 | % |
|
| 94.60 | % |
|
| 92.54 | % |
|
| 95.37 | % |
Deposits to total liabilities |
|
| 86.67 | % |
|
| 85.95 | % |
|
| 86.67 | % |
|
| 85.95 | % |
|
| 87.49 | % |
|
| 86.31 | % |
Deposits per branch |
| $ | 144,869 |
|
| $ | 147,696 |
|
| $ | 144,869 |
|
| $ | 147,696 |
|
| $ | 153,129 |
|
| $ | 152,965 |
|
Asset Quality Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Non-performing loans and leases to total loans and leases |
|
| 0.79 | % |
|
| 0.67 | % |
|
| 0.79 | % |
|
| 0.67 | % |
|
| 1.00 | % |
|
| 0.84 | % |
Non-performing assets to total assets |
|
| 0.73 | % |
|
| 0.67 | % | ||||||||||||||||
ACL to total loans and leases held for investment, |
|
| 1.60 | % |
|
| 1.23 | % |
|
| 1.60 | % |
|
| 1.23 | % |
|
| 1.51 | % |
|
| 1.64 | % |
Net charge-offs to average total loans and leases |
|
| 0.33 | % |
|
| 0.15 | % |
|
| 0.25 | % |
|
| 0.15 | % |
|
| 0.37 | % |
|
| 0.09 | % |
Capital Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Common equity to total assets |
|
| 10.29 | % |
|
| 10.27 | % |
|
| 10.29 | % |
|
| 10.27 | % |
|
| 10.72 | % |
|
| 10.57 | % |
Tangible common equity to tangible assets(1) |
|
| 8.18 | % |
|
| 8.25 | % |
|
| 8.18 | % |
|
| 8.25 | % |
|
| 8.76 | % |
|
| 8.66 | % |
Leverage ratio |
|
| 10.75 | % |
|
| 10.30 | % |
|
| 10.75 | % |
|
| 10.30 | % |
|
| 10.91 | % |
|
| 10.46 | % |
Common equity tier 1 capital ratio |
|
| 10.08 | % |
|
| 10.24 | % |
|
| 10.08 | % |
|
| 10.24 | % |
|
| 10.59 | % |
|
| 10.27 | % |
Tier 1 capital ratio |
|
| 11.12 | % |
|
| 10.91 | % |
|
| 11.12 | % |
|
| 10.91 | % |
|
| 11.62 | % |
|
| 10.90 | % |
Total capital ratio |
|
| 13.17 | % |
|
| 13.02 | % |
|
| 13.17 | % |
|
| 13.02 | % |
|
| 13.66 | % |
|
| 13.19 | % |
(1) Represents a non-GAAP financial measure. See “Reconciliations of non-GAAP Financial Measures” for a reconciliation of our non-GAAP measures 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 impairment charges on assets held for sale and ROU assets.assets, and merger-related expenses.
(4) Represents the remaining net unaccreted discount as a result of applying the fair value acquisition accounting adjustment at the time of the business combination on acquired loans.
(5) 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%.
5448
We reported consolidated net income of $28.2$30.4 million for the three months ended September 30, 2023March 31, 2024 compared to net income of $22.7$23.9 million for the three months ended September 30, 2022,March 31, 2023, an increase of $5.6$6.5 million. The increase in net income was primarily attributable to a $23.6$9.8 million increase in net interest income and a decrease in the provision for credit losses of $3.2 million, offset by an increase in non-interest expense of $11.7 million$5.0 million. Net income available to common stockholders was $0.70 per basic and an increase inper diluted common share, for the provisionthree months ended March 31, 2024 compared to $0.65 per basic and $0.64 per diluted common share, for credit losses of $4.6 million.the three months ended March 31, 2023.
The increase in net interest income during the three months ended September 30, 2023March 31, 2024 was mainly a result of loans acquired and higher yields partially offset by an increaseon loans and leases, organic growth in interest expensethe loan and lease portfolio, as well as from the Inland acquisition.. The decrease in provision for credit losses was due to deposits assumed and higher rates on deposits.a smaller allocation for individually assessed loans. The increase in non-interest expense was primarily due to increases in salaries and employee benefits legal, audit and other professional fees, and data processing. The increase in the provision for credit losses wasmainly due to acquired non-credit-deteriorated loans resulting from acquisition accounting.
Net income available to common stockholders was $28.2 million, or $0.66 per basic and $0.65 per diluted common share, for the three months ended September 30, 2023 compared to $22.7 million, or $0.61 per basic and diluted common share, for the three months ended September 30, 2022.headcount.
Our annualized return on average assets was 1.30%1.36% for the three months ended September 30, 2023March 31, 2024 compared to 1.26%1.32% for the three months ended September 30, 2022.March 31, 2023. Our annualized return on average stockholders’ equity was 12.11%12.26% for the three months ended September 30, 2023March 31, 2024 compared to 11.59%12.38% for the three months ended September 30, 2022.March 31, 2023. Our efficiency ratio was 53.75%51.94% for the three months ended September 30, 2023March 31, 2024 compared to 55.11%52.10% for the three months ended September 30, 2022.
We reported consolidated net income of $78.3 million for the nine months ended September 30, 2023 compared to net income of $65.2 million for the nine months ended September 30, 2022, an increase of $13.0 million. The increase in net income was primarily attributable to a $55.1 million increase in net interest income, offset by a $21.5 million increase in non-interest expense, a $7.5 million increase in the provision for income taxes, a $9.4 million increase in the provision for credit losses, and a $4.2 million decrease in non-interest income.
The increase in net interest income during the nine months ended September 30, 2023 was mainly a result of higher yields on loans and leases and increased average balances. The increase in non-interest expense was mostly due to an increase in salaries and employee benefits, data processing, and legal, audit and other professional fees. The increase in provision for credit losses was mainly attributable to acquired non-credit-deteriorated loans resulting from acquisition accounting, increases in specific reserves on individually evaluated loans, and loan and lease portfolio growth. The increase in provision for income taxes was due to higher income before taxes. The decrease in non-interest income was primarily due to decrease in net gains on sales of loans due to lower volume and average premiums.
Net income available to common stockholders was $78.3 million, or $2.01 per basic and $1.98 per diluted common share, for the nine months ended September 30, 2023 compared to $65.1 million, or $1.76 per basic and $1.73 per diluted common share, for the nine months ended September 30, 2022. Dividends on preferred shares were $196,000 for the nine months ended September 30, 2022.
Our annualized return on average assets was 1.34% for the nine months ended September 30, 2023 compared to 1.26% for the nine months ended September 30, 2022. Our annualized return on average stockholders’ equity was 12.48% for the nine months ended September 30, 2023 compared to 10.96% for the nine months ended September 30, 2022. Our efficiency ratio was 52.96% for the nine months ended September 30, 2023 compared to 55.12% for the nine months ended September 30, 2022.March 31, 2023.
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 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 and is impacted by changes in expected cash flows on 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 September 30, 2023,March 31, 2024, purchased credit deteriorated loans accounted for under ASC Topic 326 represented 3.8%3.0% of our total loan and lease portfolio compared to 1.4%3.4% at December 31, 2022.2023.
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.
5549
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 September 30, |
|
| Three Months Ended March 31, |
| ||||||||||||||||||||||||||||||||||||||||||
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||||||||||||||||||||||||||||||||||
|
| Average |
|
| Interest |
|
| Average |
|
| Average |
|
| Interest |
|
| Average |
|
| Average |
|
| Interest |
|
| Average |
|
| Average |
|
| Interest |
|
| Average |
| ||||||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Cash and cash equivalents |
| $ | 195,019 |
|
| $ | 1,724 |
|
|
| 3.51 | % |
| $ | 77,522 |
|
| $ | 210 |
|
|
| 1.08 | % |
| $ | 339,449 |
|
| $ | 3,828 |
|
|
| 4.54 | % |
| $ | 97,578 |
|
| $ | 442 |
|
|
| 1.84 | % |
Loans and leases(1) |
|
| 6,484,875 |
|
|
| 125,465 |
|
|
| 7.68 | % |
|
| 5,218,135 |
|
|
| 72,824 |
|
|
| 5.54 | % |
|
| 6,681,488 |
|
|
| 123,792 |
|
|
| 7.45 | % |
|
| 5,484,372 |
|
|
| 92,343 |
|
|
| 6.83 | % |
Taxable securities |
|
| 1,371,979 |
|
|
| 8,465 |
|
|
| 2.45 | % |
|
| 1,302,375 |
|
|
| 6,014 |
|
|
| 1.83 | % |
|
| 1,422,661 |
|
|
| 9,822 |
|
|
| 2.78 | % |
|
| 1,275,377 |
|
|
| 6,431 |
|
|
| 2.04 | % |
Tax-exempt securities(2) |
|
| 168,805 |
|
|
| 1,184 |
|
|
| 2.78 | % |
|
| 162,591 |
|
|
| 1,083 |
|
|
| 2.64 | % |
|
| 159,984 |
|
|
| 1,112 |
|
|
| 2.80 | % |
|
| 151,817 |
|
|
| 994 |
|
|
| 2.65 | % |
Total interest-earning assets |
| $ | 8,220,678 |
|
| $ | 136,838 |
|
|
| 6.60 | % |
| $ | 6,760,623 |
|
| $ | 80,131 |
|
|
| 4.70 | % |
| $ | 8,603,582 |
|
| $ | 138,554 |
|
|
| 6.48 | % |
| $ | 7,009,144 |
|
| $ | 100,210 |
|
|
| 5.80 | % |
Allowance for credit losses - loans and leases |
|
| (108,315 | ) |
|
|
|
|
|
|
|
| (62,733 | ) |
|
|
|
|
|
|
|
| (102,256 | ) |
|
|
|
|
|
|
|
| (84,321 | ) |
|
|
|
|
|
| ||||||||
All other assets |
|
| 521,982 |
|
|
|
|
|
|
|
|
| 447,299 |
|
|
|
|
|
|
|
|
| 529,615 |
|
|
|
|
|
|
|
|
| 420,328 |
|
|
|
|
|
|
| ||||||||
TOTAL ASSETS |
| $ | 8,634,345 |
|
|
|
|
|
|
|
| $ | 7,145,189 |
|
|
|
|
|
|
|
| $ | 9,030,941 |
|
|
|
|
|
|
|
| $ | 7,345,151 |
|
|
|
|
|
|
| ||||||||
LIABILITIES AND STOCKHOLDERS’ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Interest checking |
| $ | 579,917 |
|
| $ | 2,208 |
|
|
| 1.51 | % |
| $ | 583,777 |
|
| $ | 1,077 |
|
|
| 0.73 | % |
| $ | 590,406 |
|
| $ | 2,429 |
|
|
| 1.65 | % |
| $ | 606,008 |
|
| $ | 2,494 |
|
|
| 1.67 | % |
Money market accounts |
|
| 2,040,476 |
|
|
| 16,676 |
|
|
| 3.24 | % |
|
| 1,391,923 |
|
|
| 3,358 |
|
|
| 0.96 | % |
|
| 2,237,324 |
|
|
| 19,660 |
|
|
| 3.53 | % |
|
| 1,465,677 |
|
|
| 7,728 |
|
|
| 2.14 | % |
Savings |
|
| 594,555 |
|
|
| 228 |
|
|
| 0.15 | % |
|
| 673,966 |
|
|
| 247 |
|
|
| 0.15 | % |
|
| 531,912 |
|
|
| 197 |
|
|
| 0.15 | % |
|
| 613,590 |
|
|
| 227 |
|
|
| 0.15 | % |
Time deposits |
|
| 1,706,531 |
|
|
| 18,051 |
|
|
| 4.20 | % |
|
| 687,124 |
|
|
| 1,289 |
|
|
| 0.74 | % |
|
| 1,992,357 |
|
|
| 23,676 |
|
|
| 4.78 | % |
|
| 966,409 |
|
|
| 5,849 |
|
|
| 2.45 | % |
Total interest-bearing deposits |
|
| 4,921,479 |
|
|
| 37,163 |
|
|
| 3.00 | % |
|
| 3,336,790 |
|
|
| 5,971 |
|
|
| 0.71 | % |
|
| 5,351,999 |
|
|
| 45,962 |
|
|
| 3.45 | % |
|
| 3,651,684 |
|
|
| 16,298 |
|
|
| 1.81 | % |
Other borrowings |
|
| 463,561 |
|
|
| 3,981 |
|
|
| 3.41 | % |
|
| 607,471 |
|
|
| 3,232 |
|
|
| 2.11 | % |
|
| 472,644 |
|
|
| 3,824 |
|
|
| 3.25 | % |
|
| 573,433 |
|
|
| 5,852 |
|
|
| 4.14 | % |
Federal funds purchased |
|
| — |
|
|
| — |
|
|
| 0.00 | % |
|
| 2,778 |
|
|
| 36 |
|
|
| 5.30 | % | ||||||||||||||||||||||||
Subordinated notes and debentures |
|
| 144,171 |
|
|
| 2,994 |
|
|
| 8.24 | % |
|
| 110,799 |
|
|
| 1,825 |
|
|
| 6.54 | % |
|
| 144,387 |
|
|
| 2,994 |
|
|
| 8.34 | % |
|
| 111,101 |
|
|
| 2,098 |
|
|
| 7.66 | % |
Total borrowings |
|
| 607,732 |
|
|
| 6,975 |
|
|
| 4.55 | % |
|
| 718,270 |
|
|
| 5,057 |
|
|
| 2.79 | % |
|
| 617,031 |
|
|
| 6,818 |
|
|
| 4.44 | % |
|
| 687,312 |
|
|
| 7,986 |
|
|
| 4.71 | % |
Total interest-bearing liabilities |
| $ | 5,529,211 |
|
| $ | 44,138 |
|
|
| 3.17 | % |
| $ | 4,055,060 |
|
| $ | 11,028 |
|
|
| 1.08 | % |
| $ | 5,969,030 |
|
| $ | 52,780 |
|
|
| 3.56 | % |
| $ | 4,338,996 |
|
| $ | 24,284 |
|
|
| 2.27 | % |
Non-interest-bearing demand deposits |
|
| 1,987,996 |
|
|
|
|
|
|
|
|
| 2,198,095 |
|
|
|
|
|
|
|
|
| 1,874,322 |
|
|
|
|
|
|
|
|
| 2,076,613 |
|
|
|
|
|
|
| ||||||||
Other liabilities |
|
| 192,860 |
|
|
|
|
|
|
|
|
| 116,676 |
|
|
|
|
|
|
|
|
| 188,783 |
|
|
|
|
|
|
|
|
| 145,253 |
|
|
|
|
|
|
| ||||||||
Total stockholders’ equity |
|
| 924,278 |
|
|
|
|
|
|
|
|
| 775,358 |
|
|
|
|
|
|
|
|
| 998,806 |
|
|
|
|
|
|
|
|
| 784,289 |
|
|
|
|
|
|
| ||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ |
| $ | 8,634,345 |
|
|
|
|
|
|
|
| $ | 7,145,189 |
|
|
|
|
|
|
|
| $ | 9,030,941 |
|
|
|
|
|
|
|
| $ | 7,345,151 |
|
|
|
|
|
|
| ||||||||
Net interest spread(3) |
|
|
|
|
|
|
|
| 3.43 | % |
|
|
|
|
|
|
|
| 3.62 | % |
|
|
|
|
|
|
|
| 2.92 | % |
|
|
|
|
|
|
|
| 3.53 | % | ||||||||
Net interest income, fully taxable equivalent |
|
|
|
| $ | 92,700 |
|
|
|
|
|
|
|
| $ | 69,103 |
|
|
|
|
|
|
|
| $ | 85,774 |
|
|
|
|
|
|
|
| $ | 75,926 |
|
|
|
| ||||||||
Net interest margin, fully taxable equivalent(2)(4) |
|
|
|
|
|
|
|
| 4.47 | % |
|
|
|
|
|
|
|
| 4.05 | % |
|
|
|
|
|
|
|
| 4.01 | % |
|
|
|
|
|
|
|
| 4.39 | % | ||||||||
Reconciliation to reported net interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Less: Tax-equivalent adjustment |
|
|
|
|
| 248 |
|
|
| 0.01 | % |
|
|
|
|
| 228 |
|
|
| 0.01 | % |
|
|
|
|
| 233 |
|
|
| 0.01 | % |
|
|
|
|
| 208 |
|
|
| 0.01 | % | ||||
Net interest income |
|
|
|
| $ | 92,452 |
|
|
|
|
|
|
|
| $ | 68,875 |
|
|
|
|
|
|
|
| $ | 85,541 |
|
|
|
|
|
|
|
| $ | 75,718 |
|
|
|
| ||||||||
Net interest margin(4) |
|
|
|
|
|
|
|
| 4.46 | % |
|
|
|
|
|
|
|
| 4.04 | % |
|
|
|
|
|
|
|
| 4.00 | % |
|
|
|
|
|
|
|
| 4.38 | % | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net loan accretion impact on margin |
|
|
|
| $ | 10,276 |
|
|
| 0.50 | % |
|
|
|
| $ | 1,559 |
|
|
| 0.09 | % |
|
|
|
| $ | 4,284 |
|
|
| 0.20 | % |
|
|
|
| $ | 729 |
|
|
| 0.04 | % | ||||
50
56
|
| For the Nine Months Ended September 30, |
| |||||||||||||||||||||
|
| 2023 |
|
| 2022 |
| ||||||||||||||||||
|
| Average |
|
| Interest |
|
| Average |
|
| Average |
|
| Interest |
|
| Average |
| ||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents |
| $ | 142,890 |
|
| $ | 3,207 |
|
|
| 3.00 | % |
| $ | 72,802 |
|
| $ | 313 |
|
|
| 0.58 | % |
Loans and leases(1) |
|
| 5,838,611 |
|
|
| 316,942 |
|
|
| 7.26 | % |
|
| 4,967,769 |
|
|
| 187,924 |
|
|
| 5.06 | % |
Taxable securities |
|
| 1,299,732 |
|
|
| 21,220 |
|
|
| 2.18 | % |
|
| 1,323,838 |
|
|
| 17,393 |
|
|
| 1.76 | % |
Tax-exempt securities(2) |
|
| 157,338 |
|
|
| 3,158 |
|
|
| 2.68 | % |
|
| 166,911 |
|
|
| 3,338 |
|
|
| 2.67 | % |
Total interest-earning assets |
| $ | 7,438,571 |
|
| $ | 344,527 |
|
|
| 6.19 | % |
| $ | 6,531,320 |
|
| $ | 208,968 |
|
|
| 4.28 | % |
Allowance for credit losses - loans and leases |
|
| (95,234 | ) |
|
|
|
|
|
|
|
| (59,526 | ) |
|
|
|
|
|
| ||||
All other assets |
|
| 455,850 |
|
|
|
|
|
|
|
|
| 472,115 |
|
|
|
|
|
|
| ||||
TOTAL ASSETS |
| $ | 7,799,187 |
|
|
|
|
|
|
|
| $ | 6,943,909 |
|
|
|
|
|
|
| ||||
LIABILITIES AND STOCKHOLDERS’ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Interest checking |
| $ | 575,558 |
|
| $ | 6,877 |
|
|
| 1.60 | % |
| $ | 592,985 |
|
| $ | 1,670 |
|
|
| 0.38 | % |
Money market accounts |
|
| 1,682,311 |
|
|
| 35,203 |
|
|
| 2.80 | % |
|
| 1,318,725 |
|
|
| 5,026 |
|
|
| 0.51 | % |
Savings |
|
| 594,396 |
|
|
| 675 |
|
|
| 0.15 | % |
|
| 662,820 |
|
|
| 406 |
|
|
| 0.08 | % |
Time deposits |
|
| 1,336,584 |
|
|
| 35,429 |
|
|
| 3.54 | % |
|
| 658,893 |
|
|
| 2,084 |
|
|
| 0.42 | % |
Total interest-bearing deposits |
|
| 4,188,849 |
|
|
| 78,184 |
|
|
| 2.50 | % |
|
| 3,233,423 |
|
|
| 9,186 |
|
|
| 0.38 | % |
Other borrowings |
|
| 515,068 |
|
|
| 14,074 |
|
|
| 3.65 | % |
|
| 466,194 |
|
|
| 4,710 |
|
|
| 1.35 | % |
Federal funds purchased |
|
| 916 |
|
|
| 36 |
|
|
| 5.30 | % |
|
| 842 |
|
|
| 14 |
|
|
| 2.32 | % |
Subordinated notes and debentures |
|
| 122,296 |
|
|
| 7,234 |
|
|
| 7.91 | % |
|
| 110,648 |
|
|
| 5,119 |
|
|
| 6.19 | % |
Total borrowings |
|
| 638,280 |
|
|
| 21,344 |
|
|
| 4.47 | % |
|
| 577,684 |
|
|
| 9,843 |
|
|
| 2.28 | % |
Total interest-bearing liabilities |
| $ | 4,827,129 |
|
| $ | 99,528 |
|
|
| 2.76 | % |
| $ | 3,811,107 |
|
| $ | 19,029 |
|
|
| 0.67 | % |
Non-interest-bearing demand deposits |
|
| 1,970,724 |
|
|
|
|
|
|
|
|
| 2,237,002 |
|
|
|
|
|
|
| ||||
Other liabilities |
|
| 162,542 |
|
|
|
|
|
|
|
|
| 99,951 |
|
|
|
|
|
|
| ||||
Total stockholders’ equity |
|
| 838,792 |
|
|
|
|
|
|
|
|
| 795,849 |
|
|
|
|
|
|
| ||||
TOTAL LIABILITIES AND STOCKHOLDERS’ |
| $ | 7,799,187 |
|
|
|
|
|
|
|
| $ | 6,943,909 |
|
|
|
|
|
|
| ||||
Net interest spread(3) |
|
|
|
|
|
|
|
| 3.43 | % |
|
|
|
|
|
|
|
| 3.61 | % | ||||
Net interest income, fully taxable equivalent |
|
|
|
| $ | 244,999 |
|
|
|
|
|
|
|
| $ | 189,939 |
|
|
|
| ||||
Net interest margin, fully taxable equivalent(2)(4) |
|
|
|
|
|
|
|
| 4.40 | % |
|
|
|
|
|
|
|
| 3.88 | % | ||||
Reconciliation to reported net interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Less: Tax-equivalent adjustment |
|
|
|
|
| 663 |
|
|
| 0.01 | % |
|
|
|
|
| 701 |
|
|
| 0.01 | % | ||
Net interest income |
|
|
|
| $ | 244,336 |
|
|
|
|
|
|
|
| $ | 189,238 |
|
|
|
| ||||
Net interest margin(4) |
|
|
|
|
|
|
|
| 4.39 | % |
|
|
|
|
|
|
|
| 3.87 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net loan accretion impact on margin |
|
|
|
| $ | 11,616 |
|
|
| 0.21 | % |
|
|
|
| $ | 4,418 |
|
|
| 0.09 | % | ||
57
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 September 30, 2023 |
| |||||||||
|
| Compared to Three Months Ended September 30, 2022 |
| |||||||||
|
| Increase (Decrease) Due to |
|
|
|
| ||||||
|
| Volume |
|
| Rate |
|
| Total |
| |||
Interest income |
|
|
|
|
|
|
|
|
| |||
Cash and cash equivalents |
| $ | 1,039 |
|
| $ | 475 |
|
| $ | 1,514 |
|
Loans and leases(1) |
|
| 24,495 |
|
|
| 28,146 |
|
|
| 52,641 |
|
Taxable securities |
|
| 416 |
|
|
| 2,035 |
|
|
| 2,451 |
|
Tax-exempt securities |
|
| 44 |
|
|
| 57 |
|
|
| 101 |
|
Total interest income |
| $ | 25,994 |
|
| $ | 30,713 |
|
| $ | 56,707 |
|
Interest expense |
|
|
|
|
|
|
|
|
| |||
Deposits |
|
|
|
|
|
|
|
|
| |||
Interest checking |
| $ | (17 | ) |
| $ | 1,148 |
|
| $ | 1,131 |
|
Money market accounts |
|
| 5,319 |
|
|
| 7,999 |
|
|
| 13,318 |
|
Savings |
|
| (19 | ) |
|
| — |
|
|
| (19 | ) |
Time deposits |
|
| 10,770 |
|
|
| 5,992 |
|
|
| 16,762 |
|
Total interest-bearing deposits |
|
| 16,053 |
|
|
| 15,139 |
|
|
| 31,192 |
|
Other borrowings |
|
| (1,236 | ) |
|
| 1,985 |
|
|
| 749 |
|
Subordinated notes and debentures |
|
| 693 |
|
|
| 476 |
|
|
| 1,169 |
|
Total borrowings |
|
| (543 | ) |
|
| 2,461 |
|
|
| 1,918 |
|
Total interest expense |
| $ | 15,510 |
|
| $ | 17,600 |
|
| $ | 33,110 |
|
Net interest income, fully taxable equivalent |
| $ | 10,484 |
|
| $ | 13,113 |
|
| $ | 23,597 |
|
|
| Nine Months Ended September 30, 2023 |
|
| Three Months Ended March 31, 2024 |
| ||||||||||||||||||
|
| Compared to Nine Months Ended September 30, 2022 |
|
| Compared to Three Months Ended March 31, 2023 |
| ||||||||||||||||||
|
| Increase (Decrease) Due to |
|
|
|
|
| Increase (Decrease) Due to |
|
|
|
| ||||||||||||
|
| Volume |
|
| Rate |
|
| Total |
|
| Volume |
|
| Rate |
|
| Total |
| ||||||
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents |
| $ | 1,576 |
|
| $ | 1,318 |
|
| $ | 2,894 |
|
| $ | 2,731 |
|
| $ | 655 |
|
| $ | 3,386 |
|
Loans and leases(1) |
|
| 47,274 |
|
|
| 81,744 |
|
|
| 129,018 |
|
|
| 22,995 |
|
|
| 8,454 |
|
|
| 31,449 |
|
Taxable securities |
|
| (332 | ) |
|
| 4,159 |
|
|
| 3,827 |
|
|
| 1,044 |
|
|
| 2,347 |
|
|
| 3,391 |
|
Tax-exempt securities |
|
| (192 | ) |
|
| 12 |
|
|
| (180 | ) |
|
| 61 |
|
|
| 57 |
|
|
| 118 |
|
Total interest income |
| $ | 48,326 |
|
| $ | 87,233 |
|
| $ | 135,559 |
|
| $ | 26,831 |
|
| $ | 11,513 |
|
| $ | 38,344 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Interest checking |
| $ | (204 | ) |
| $ | 5,411 |
|
| $ | 5,207 |
|
| $ | (35 | ) |
| $ | (30 | ) |
| $ | (65 | ) |
Money market accounts |
|
| 7,590 |
|
|
| 22,587 |
|
|
| 30,177 |
|
|
| 6,867 |
|
|
| 5,065 |
|
|
| 11,932 |
|
Savings |
|
| (78 | ) |
|
| 347 |
|
|
| 269 |
|
|
| (30 | ) |
|
| — |
|
|
| (30 | ) |
Time deposits |
|
| 17,969 |
|
|
| 15,376 |
|
|
| 33,345 |
|
|
| 12,228 |
|
|
| 5,599 |
|
|
| 17,827 |
|
Total interest-bearing deposits |
|
| 25,277 |
|
|
| 43,721 |
|
|
| 68,998 |
|
|
| 19,030 |
|
|
| 10,634 |
|
|
| 29,664 |
|
Other borrowings |
|
| 1,333 |
|
|
| 8,031 |
|
|
| 9,364 |
|
|
| (757 | ) |
|
| (1,271 | ) |
|
| (2,028 | ) |
Federal funds purchased |
|
| 3 |
|
|
| 19 |
|
|
| 22 |
|
|
| 1 |
|
|
| (37 | ) |
|
| (36 | ) |
Subordinated notes and debentures |
|
| 693 |
|
|
| 1,422 |
|
|
| 2,115 |
|
|
| 708 |
|
|
| 188 |
|
|
| 896 |
|
Total borrowings |
|
| 2,029 |
|
|
| 9,472 |
|
|
| 11,501 |
|
|
| (48 | ) |
|
| (1,120 | ) |
|
| (1,168 | ) |
Total interest expense |
| $ | 27,306 |
|
| $ | 53,193 |
|
| $ | 80,499 |
|
| $ | 18,982 |
|
| $ | 9,514 |
|
| $ | 28,496 |
|
Net interest income, fully taxable equivalent |
| $ | 21,020 |
|
| $ | 34,040 |
|
| $ | 55,060 |
|
| $ | 7,849 |
|
| $ | 1,999 |
|
| $ | 9,848 |
|
Net interest income for the three months ended September 30, 2023March 31, 2024 was $92.5$85.5 million compared to $68.9$75.7 million during the same period in 2022,2023, an increase of $23.6$9.8 million, or 34.2%13.0%. Interest income increased $56.7$38.3 million for the three months ended September 30, 2023March 31, 2024 compared to the same period in 20222023 primarily a result of growth in the loan and lease portfolio, including acquired loans, and higher yields and increased average balances on loans and leases due to acquired loans.interest earning assets. Interest expense increased by $33.1$28.5 million for the three months ended September 30, 2023March 31, 2024 compared to the same period in 20222023 mostly due to increases ingrowth of the average rates paid ondeposit portfolio, including assumed deposits, change in deposit mix, and growth of deposits from assumed deposits.
58
Net interest income for the nine months ended September 30, 2023 was $244.3 million compared to $189.2 million during the same period in 2022, an increase of $55.1 million, or 29.1%. Interest income increased $135.6 million for nine months ended September 30, 2023 compared to the same period in 2022 primarily a result of higher yields and increased average balance on loans and leases from acquired loans. Interest expense increased by $80.5 million for the nine months ended September 30, 2023 compared to the same period in 2022 mostly due to increases in the average rates paid on deposits, change in deposit mix, and growth of deposits from assumedinterest-bearing deposits.
The net interest margin for the three months ended September 30, 2023March 31, 2024 was 4.46%4.00%, an increasea decrease of 4238 basis points compared to 4.04%4.38% for the three months ended September 30, 2022.March 31, 2023. The net interest margin for the nine months ended September 30, 2023 and 2022decrease was 4.39% and 3.87%, respectively. The primary drivers of the increases in each period was the increase yields dueprimarily attributable to the rising interest rate environment, and the increase in average interest earning assets driven by the acquisition.environment.
Net loan accretion income was $10.3$4.3 million for the three months ended September 30, 2023March 31, 2024 compared to $1.6 million$729,000 for the three months ended September 30, 2022,March 31, 2023, an increase of $8.7$3.6 million or 559.1%. Net loan accretion income was $11.6 million fordue to loans acquired in the nine months ended September 30, 2023 compared to $4.4 million for the nine months ended September 30, 2022, an increase of $7.2 million or 162.9%.Inland acquisition. Total net loan accretion on acquired loans contributed 5020 basis points to the net interest margin for the three months ended September 30, 2023March 31, 2024 compared to ninefour basis points for the three months ended September 30, 2022. Total net loan accretion on acquired loans contributed 21 basis points to the net interest margin for the nine months ended September 30, 2023 compared to nine basis points for the nine months ended September 30, 2022.March 31, 2023. We expected loan accretion income to decline and projected accretion income as of September 30, 2023March 31, 2024 is summarized as follows:
|
| Estimated |
|
| Estimated |
| ||
2023 |
| $ | 3,899 |
| ||||
2024 |
|
| 10,674 |
| ||||
Remainder of 2024 |
| $ | 6,530 |
| ||||
2025 |
|
| 6,240 |
|
|
| 6,126 |
|
2026 |
|
| 4,586 |
|
|
| 4,469 |
|
2027 |
|
| 2,881 |
|
|
| 2,808 |
|
2028 |
|
| 1,599 |
| ||||
Thereafter |
|
| 11,220 |
|
|
| 13,766 |
|
Total |
| $ | 39,500 |
|
| $ | 35,298 |
|
(1) Estimated projected accretion excludes contractual interest income on ASC 326-20 loans.acquired loans and leases.
(2) Projections are undated quarterly, assume no prepayments, and are subject to change.
51
59
Provision for Credit Losses
The provision for credit losses reflects the amount required to maintain the allowance for credit lossesACL at an appropriate level based upon management’s evaluation of the adequacy 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 $6.6 million for the three months ended March 31, 2204, compared to $9.8 million for the three months ended March 31, 2023, a decrease of $3.2 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 $7.9$6.9 million for the three months ended September 30, 2023,March 31, 2024, compared to $4.2$9.7 million for the three months ended September 30, 2022, an increaseMarch 31, 2023, a decrease of $3.7 million. Provision for credit losses was $24.0 million and $15.1 million for the nine months ended September 30, 2023 and 2022, respectively, an increase of $8.9$2.8 million. The increasedecrease in provision for credit losses - loans and leases for the comparable periods was driven by acquired non-credit-deteriorated loans resulting from acquisition accounting, an increase in specific reserves relatedlower allocation to loans individually evaluated for impairment, and loan and lease growth. On July 1, 2023, a $2.7 million provision for credit losses was recorded on acquired non-credit-deteriorated loans related to the Inland transaction.assessed loans. The provision for credit losses - unfunded commitments was $938,000a recapture of $248,000 and $373,000a provision of $113,000 for the three and nine months ended September 30, 2023.March 31, 2024 and 2023, respectively
Non-Interest Income
The following table presents the major components of non-interest income for the three and nine months ended September 30,March 31, 2024 and 2023, and 2022, respectively (dollars in thousands):
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
|
| QTD 2023 |
|
| YTD 2023 |
| Three Months Ended March 31, |
|
| QTD 2024 |
| ||||||||||||||||||||||||||||||
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| $ Change |
|
| % Change |
|
| $ Change |
|
| % Change |
| 2024 |
|
| 2023 |
|
| $ Change |
|
| % Change |
| ||||||||||||
Fees and service charges on deposits | $ | 2,372 |
|
| $ | 2,128 |
|
| $ | 6,725 |
|
| $ | 6,071 |
|
| $ | 244 |
|
|
| 11.5 | % |
| $ | 654 |
|
|
| 10.8 | % | $ | 2,427 |
|
| $ | 2,120 |
|
| $ | 307 |
|
|
| 14.5 | % |
Loan servicing revenue |
| 3,369 |
|
|
| 3,422 |
|
|
| 10,126 |
|
|
| 10,186 |
|
|
| (53 | ) |
|
| (1.5 | )% |
|
| (60 | ) |
|
| (0.6 | )% |
| 3,364 |
|
|
| 3,380 |
|
|
| (16 | ) |
|
| (0.5 | )% |
Loan servicing asset revaluation |
| (3,646 | ) |
|
| (2,342 | ) |
|
| (3,855 | ) |
|
| (8,209 | ) |
|
| (1,304 | ) |
|
| 55.6 | % |
|
| 4,354 |
|
|
| (53.0 | )% |
| (703 | ) |
|
| 656 |
|
|
| (1,359 | ) |
|
| (207.2 | )% |
ATM and interchange fees |
| 1,205 |
|
|
| 1,007 |
|
|
| 3,380 |
|
|
| 3,187 |
|
|
| 198 |
|
|
| 19.6 | % |
|
| 193 |
|
|
| 6.1 | % |
| 1,075 |
|
|
| 1,063 |
|
|
| 12 |
|
|
| 1.1 | % |
Net realized gains on securities |
| — |
|
|
| (2 | ) |
|
| — |
|
|
| 50 |
|
|
| 2 |
|
|
| 100.0 | % |
|
| (50 | ) |
|
| (100.0 | )% | |||||||||||||||
Change in fair value of |
| (313 | ) |
|
| (581 | ) |
|
| 230 |
|
|
| (1,313 | ) |
|
| 268 |
|
|
| (46.1 | )% |
|
| 1,543 |
|
| NM |
|
| 392 |
|
|
| 350 |
|
|
| 42 |
|
|
| 11.9 | % | |
Net gains on sales of loans |
| 6,473 |
|
|
| 5,580 |
|
|
| 17,325 |
|
|
| 26,390 |
|
|
| 893 |
|
|
| 16.0 | % |
|
| (9,065 | ) |
|
| (34.4 | )% |
| 5,533 |
|
|
| 5,148 |
|
|
| 385 |
|
|
| 7.5 | % |
Wealth management and trust income |
| 939 |
|
|
| 995 |
|
|
| 2,902 |
|
|
| 2,943 |
|
|
| (56 | ) |
|
| (5.7 | )% |
|
| (41 | ) |
|
| (1.4 | )% |
| 1,157 |
|
|
| 924 |
|
|
| 233 |
|
|
| 25.2 | % |
Other non-interest income |
| 1,977 |
|
|
| 1,785 |
|
|
| 4,979 |
|
|
| 6,274 |
|
|
| 192 |
|
|
| 10.8 | % |
|
| (1,295 | ) |
|
| (20.6 | )% |
| 2,228 |
|
|
| 1,504 |
|
|
| 724 |
|
|
| 48.1 | % |
Total non-interest income | $ | 12,376 |
|
| $ | 11,992 |
|
| $ | 41,812 |
|
| $ | 45,579 |
|
| $ | 384 |
|
|
| 3.2 | % |
| $ | (3,767 | ) |
|
| (8.3 | )% | $ | 15,473 |
|
| $ | 15,145 |
|
| $ | 328 |
|
|
| 2.2 | % |
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 $2.4 million and $2.1 million for the three months ended September 30,March 31, 2024 and 2023, and 2022, respectively. Fees and service charges on deposits were $6.7 million and $6.1 million for the nine months ended September 30, 2023 and 2022, respectively. Increases areThe increases is primarily due to increases in deposit balances and changes in fee structure.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 $3.4 million in loan servicing revenue on the sold portion of the U.S. government guaranteed loans for the three months ended September 30,March 31, 2024 and 2023. At March 31, 2024 and 2023, and 2022. We generated $10.1 million and $10.2 million in loan servicing revenue on the sold portion of the U.S. government guaranteed loans for the nine months ended September 30, 2023 and 2022, respectively. At September 30, 2023 and 2022, 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 $3.6 million$703,000 and $2.3 millionan upward adjustment $656,000 for the three months ended September 30,March 31, 2024 and 2023, and 2022, respectively, a change of $1.3 million. Loan servicing asset revaluation had a downward adjustment of $3.9 million and $8.2 million for the nine months ended September 30, 2023 and 2022, respectively, a change of $4.4$1.4 million. Changes in the revaluationsrevaluation were mainly due to decreases in discount rates prompted by current market interest rateshigher prepayment speeds and premiums, coupled with increased prepayments.a lower average life.
Net gains on sales of loans were $6.5$5.5 million for the three months ended September 30, 2023March 31, 2024 compared to $5.6$5.1 million for the three months ended September 30, 2022,March 31, 2023, an increase of $893,000,$385,000, or 16.0%7.5%, driven mainly by higher volume, partially offset by reduced premiums in the secondary market.premiums. We sold $101.6$72.5 million of U.S. government guaranteed loans during the three months ended September 30, 2023March 31, 2024 compared to $75.4$72.2 million during the three months ended September 30, 2022. Net gains on sales of loans were $17.3 million for the nine months ended September 30, 2023 compared to $26.4 million for the nine months ended September 30, 2022, a decrease of $9.1 million or 34.4%, driven by reduced premiums in the secondary market and lower sales of guaranteed loan balances. We sold $253.4 million of U.S. government
60
guaranteed loans during the nine months ended September 30, 2023 compared to $296.2 million during the nine months ended September 30, 2022.March 31, 2023.
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 $939,000$1.2 million for the three months ended September 30, 2023March 31, 2024 compared to $995,000$924,000 for the three months ended September 30, 2022, a decreaseMarch 31, 2023, an increase of $56,000$233,000 or 5.6%. Wealth management and trust income was $2.9 million for the nine months ended September 30, 2023 and 2022, a decrease of $41,000 or 1.4%25.2%. Assets under administration were $742.6$654.1 million and $501.2$573.7 million as of September 30,March 31, 2024 and 2023, and 2022, respectively. Assets under administration decreased $116.4 million or 15.1% from $770.5 million as of December 31, 2023, due to the loss of accounts.
Other non-interest income was $2.0$2.2 million for the three months ended September 30, 2023March 31, 2024 compared to $1.8$1.5 million for the three months ended September 30, 2022,March 31, 2023, an increase of $192,000$724,000 or 10.8%. Other non-interest income was $5.0 million for the nine months ended September 30, 2023 compared to $6.3 million for the nine months ended September 30, 2022, a decrease of $1.3 million or 20.6%48.1%. The primary driverincrease was primarily driven by net gains on sales of the decrease in the nine month period was decreased interest rate swap fee income.leased equipment and income associated with bank owned life insurance.
52
Non-Interest Expense
The following table presents the major components of non-interest expense for the three and nine months ended September 30,March 31, 2024 and 2023, and 2022, respectively (dollars in thousands):
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
|
| QTD 2023 |
|
| YTD 2023 |
|
| Three Months Ended March 31, |
|
| QTD 2024 |
|
| ||||||||||||||||||||||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| $ Change |
|
| % Change |
|
| $ Change |
|
| % Change |
|
| 2024 |
|
| 2023 |
|
| $ Change |
|
| % Change |
|
| ||||||||||||
Salaries and employee benefits |
| $ | 34,969 |
|
| $ | 29,587 |
|
| $ | 95,005 |
|
| $ | 86,243 |
|
| $ | 5,382 |
|
|
| 18.2 | % |
| $ | 8,762 |
|
|
| 10.2 | % |
| $ | 33,953 |
|
| $ | 30,394 |
|
| $ | 3,559 |
|
|
| 11.7 | % |
|
Occupancy and equipment |
|
| 5,314 |
|
|
| 3,919 |
|
|
| 14,162 |
|
|
| 13,456 |
|
|
| 1,395 |
|
|
| 35.6 | % |
|
| 706 |
|
|
| 5.3 | % |
|
| 5,284 |
|
|
| 4,444 |
|
|
| 840 |
|
|
| 18.9 | % |
|
Impairment charge on assets held |
|
| — |
|
|
| — |
|
|
| 20 |
|
|
| — |
|
|
| — |
|
|
| 0.0 | % |
|
| 20 |
|
|
| 100.0 | % |
|
| — |
|
|
| 20 |
|
|
| (20 | ) |
|
| (100.0 | )% |
|
Loan and lease related expenses |
|
| 836 |
|
|
| 530 |
|
|
| 2,287 |
|
|
| 581 |
|
|
| 306 |
|
|
| 57.4 | % |
|
| 1,706 |
|
|
| 293.6 | % |
|
| 685 |
|
|
| 963 |
|
|
| (278 | ) |
|
| (28.8 | )% |
|
Legal, audit and other |
|
| 3,805 |
|
|
| 2,733 |
|
|
| 10,594 |
|
|
| 7,153 |
|
|
| 1,072 |
|
|
| 39.3 | % |
|
| 3,441 |
|
|
| 48.1 | % |
|
| 2,719 |
|
|
| 3,114 |
|
|
| (395 | ) |
|
| (12.7 | )% |
|
Data processing |
|
| 6,472 |
|
|
| 3,370 |
|
|
| 14,527 |
|
|
| 9,952 |
|
|
| 3,102 |
|
|
| 92.0 | % |
|
| 4,575 |
|
|
| 46.0 | % |
|
| 4,145 |
|
|
| 3,783 |
|
|
| 362 |
|
|
| 9.6 | % |
|
Net loss recognized on |
|
| 111 |
|
|
| 275 |
|
|
| 296 |
|
|
| 487 |
|
|
| (164 | ) |
|
| (59.6 | )% |
|
| (191 | ) |
|
| (39.3 | )% | |||||||||||||||||
Net gain recognized on |
|
| (98 | ) |
|
| (103 | ) |
|
| 5 |
|
|
| (4.9 | )% |
| ||||||||||||||||||||||||||||||||
Other intangible assets |
|
| 1,551 |
|
|
| 1,611 |
|
|
| 4,461 |
|
|
| 5,075 |
|
|
| (60 | ) |
|
| (3.7 | )% |
|
| (614 | ) |
|
| (12.1 | )% |
|
| 1,345 |
|
|
| 1,455 |
|
|
| (110 | ) |
|
| (7.6 | )% |
|
Other non-interest expense |
|
| 4,833 |
|
|
| 4,153 |
|
|
| 14,667 |
|
|
| 11,559 |
|
|
| 680 |
|
|
| 16.4 | % |
|
| 3,108 |
|
|
| 26.9 | % |
|
| 5,776 |
|
|
| 4,730 |
|
|
| 1,046 |
|
|
| 22.1 | % |
|
Total non-interest expense |
| $ | 57,891 |
|
| $ | 46,178 |
|
| $ | 156,019 |
|
| $ | 134,506 |
|
| $ | 11,713 |
|
|
| 25.4 | % |
| $ | 21,513 |
|
|
| 16.0 | % |
| $ | 53,809 |
|
| $ | 48,800 |
|
| $ | 5,009 |
|
|
| 10.3 | % |
|
Salaries and employee benefits, the single largest component of our non-interest expense, totaled $35.0$34.0 million for the three months ended September 30, 2023March 31, 2024 compared to $29.6$30.4 million for the three months ended September 30, 2022,March 31, 2023, an increase of $5.4$3.6 million, or 18.2%. Salaries and employee benefits totaled $95.0 million for the nine months ended September 30, 2023 compared to $86.2 million for the nine months ended September 30, 2022, an increase of $8.7 million, or 10.2%11.7%. The increases were primarily a result of merit increases, lower deferred costs, increased incentive compensation and increased compensation association with the acquisition.headcount as a result of our acquisition of Inland. Our staffing increased from 972971 full-time equivalent employees as of September 30, 2022March 31, 2023 to 1,0651,064 as of September 30, 2023.March 31, 2024.
Occupancy and equipment expense, net was $5.3 million for the three months ended September 30, 2023March 31, 2024 compared to $3.9$4.4 million for the three months ended September 30, 2022,March 31, 2023, an increase of $1.4 million$840,000 or 35.6%. Occupancy and equipment expense, net was $14.2 million for the nine months ended September 30, 2023, compared to $13.5 million for the nine months ended September 30, 2022, an increase of $706,000, or 5.2%18.9%. The increase is primarily due to branches acquired branches, increased maintenance expense, and increased software depreciation expense.as a result of the Inland acquisition.
Loan and lease related expenses were $836,000$685,000 for the three months ended September 30, 2023March 31, 2024 compared to $530,000$963,000 for the three months ended September 30, 2022, an increaseMarch 31, 2023, a decrease of $306,000,$278,000, or 57.7%28.8%. The increasedecrease was primarily driven by higher reimbursable expenses associated withlower government guaranteed loan originations. Loan and lease related expenses were $2.3 million for the nine months ended September 30, 2023 compared to $581,000 for the nine months ended September 30, 2022, an increase of $1.7 million, or 293.6%. The increase was mainly related to growth of the loan and lease portfolio, and the recapture of government guaranteed loan expenses during the first nine months of 2022.expenses.
Legal, audit, and other professional fees were $2.7 million for the three months ended March 31, 2024 compared to $3.1 million for the three months ended March 31, 2023, a decrease of $395,000, or 12.7%. The decrease was principally driven by merger-related expenses incurred during the first quarter of 2023.
Data processing was $4.1 million for the three months ended March 31, 2024, compared to $3.8 million for the three months ended September 30,March 31, 2023, compared to $2.7an increase of $362,000 or 9.6%. The increases were driven by increased software licensing and IT infrastructure expenses.
Other non-interest expense was $5.8 million for the three months ended September 30, 2022, an increase of $1.1 million, or 39.2%. Legal, audit, and other professional fees were $10.6 million for the nine months ended September 30, 2023March 31, 2024 compared to $7.2 million for the nine months ended September 30, 2022, an increase of $3.4 million or 48.1%. The increase was driven by increased fees for merger-related expenses.
61
Data processing was $6.5$4.7 million for the three months ended September 30,March 31, 2023, compared to $3.4 million for the three months ended September 30, 2022, an increase of $3.1$1.0 million or 92.0%. Data processing was $14.5 million for the nine months ended September 30, 2023, compared to $10.0 million for the nine months ended September 30, 2022, an increase of $4.6 million or 46.0%. The increases were driven by merger-related expenses and increased software licensing costs.
Net loss recognized on other real estate owned and other related expenses was $111,000 for the three months ended September 30, 2023, compared to $275,000 for the three months ended September 30, 2022, a decrease of $164,000, or 59.6%. Net loss recognized on other real estate owned and other related expenses was $296,000 for the nine months ended September 30, 2023 compared to $487,000 for the nine months ended September 30, 2022, a decrease of $191,000, or 39.2%22.1%. These changes wereincrease was primarily due to sales and transfers$1.3 million in charges taken for planned branch consolidations that will occur during the second quarter of certain properties from loans.
Other non-interest expense was $4.8 million for the three months ended September 30, 2023 compared to $4.2 million for the three months ended September 30, 2022, an increase2024, which is inclusive of $680,000 or 16.4%. Other non-interest expense was $14.7 million for the nine months ended September 30, 2023 compared to $11.6 million for the nine months ended September 30, 2022, an increase of $3.1 million or 26.9%. These increases were mostly due to increases in regulatory assessments, advertising and promotions, and other general expenses.impairment on right-of-use assets.
Our efficiency ratio was 53.75%51.94% for the three months ended September 30, 2023March 31, 2024 compared to 55.11%52.10% for the three months ended September 30, 2022.March 31, 2023. The change in our efficiency ratio for the three months ended September 30, 2023March 31, 2024 was driven by an increase in our net interest income.income growth. Our adjusted efficiency ratio was 47.35%51.75% for the three months ended September 30, 2023March 31, 2024 compared to 55.11%51.54% for the three months ended September 30, 2022. Our efficiency ratio was 52.96% for the nine months ended September 30, 2023, compared to 55.12% for the nine months ended September 30, 2022. The change in our efficiency ratio was due to higher net interest income. Our adjusted efficiency ratio was 49.96% for the nine months ended September 30, 2023, compared to 55.12% for the nine months ended September 30, 2022.March 31, 2023.
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 September 30, 2023March 31, 2024 totaled $9.9$10.1 million compared to $7.9$8.3 million for the three months ended September 30, 2022,March 31, 2023, an increase of $2.1$1.8 million, or 26.2%22.0%. The increase in income tax expense was principally due to increasesan increase in net income before provision for income taxes. Our effective tax rate was 26.0%25.0% for the three months ended September 30, 2023March 31, 2024 and 25.7% for the three months ended September 30, 2022.March 31, 2023.
Our provision for income taxes for the nine months ended September 30, 2023 totaled $27.4 million compared to $20.0 million for the nine months ended September 30, 2022, an increase of $7.5 million or 37.3%. The increase in income tax expense was principally due to increases in net income before provision for income taxes. Our effective tax rate was 26.0% for the nine months ended September 30, 2023 and 23.4% for the nine months ended September 30, 2022.
We expect our effective tax rate for 20232024 to be approximately 25-27%.
53
Financial Condition
Condensed Consolidated Statements of Financial Condition Analysis
Our total assets increased by $1.6$528.5 million, or 6.0%, to $9.4 billion or 21.5%,at March 31, 2024 compared to $8.9 billion at September 30, 2023 compared to $7.4 billion at December 31, 2022.2023. The increase in total assets includeswas primarily due to an increase in cash and cash equivalents of $410.7 million, inclusive of $200.0 million in short term investments, an increase of $1.2 billion$93.9 million in loans and leases, or 22.0%1.4%, from $5.4$6.7 billion at December 31, 20222023 to $6.6$6.8 billion at September 30, 2023.March 31, 2024. Our originated loan and lease portfolio increased by $497.7$133.4 million and our purchased credit deteriorated loans and acquired non-credit-deteriorated loans and leases portfolio increaseddecreased by $694.4$39.5 million. The increase in our originated portfolio was primarily attributed to growth in the commercial and industrial loans, commercial real estate, and leasing financing receivables.portfolio. The increasedecrease in our purchased credit deteriorated loans and acquired non-credit-deteriorated loans and leases portfolio was attributed to the Inland acquisition.decreases in commercial and residential real estate resulting from resolutions and charge-offs.
Total liabilities increased by $1.4$509.6 million, or 21.6%6.5%, to $8.0$8.4 billion at September 30, 2023March 31, 2024 compared to $6.6$7.9 billion at December 31, 2022.2023. Total deposits increased by $1.3 billion,$173.2 million, or 22.1%2.4%, driven by growth in time deposits and money market accounts, offset by a decrease in non-interest bearing deposits. Other borrowings increased by $72.8$326.0 million, or 11.4%82.5%, mainly due to an increase inadvances under the Bank Term Funding Program of $200.0 million and increased FHLB advances, as well as the new term loan and drawing on our revolving line of credit.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 September 30, 2023March 31, 2024 or December 31, 2022.2023. 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
62
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 $65.5$36.7 million, or 5.6%2.7%, from $1.2$1.3 billion at December 31, 20222023 to $1.2$1.4 billion at September 30, 2023.March 31, 2024. The increase was mainly attributed to the Inland acquisition.purchases of securities, net of maturities, calls, and repayments.
At September 30, 2023,March 31, 2024, our held-to-maturity securities portfolio consists of obligations of states, municipalities and political subdivisions. We carry these securities at amortized cost. Securities held-to-maturity were $1.2 million and $2.7 million at September 30, 2023March 31, 2024, and at December 31, 2022,2023, respectively.
We had no securities that had evidence of material credit losses as of September 30, 2023 or December 31, 2022.
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):
|
| September 30, 2023 |
|
| December 31, 2022 |
|
| March 31, 2024 |
|
| December 31, 2023 |
| ||||||||||||||||||||
|
| Amortized |
|
| Fair |
|
| Amortized |
|
| Fair |
|
| Amortized |
|
| Fair |
|
| Amortized |
|
| Fair |
| ||||||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
U.S. Treasury Notes |
| $ | 105,792 |
|
| $ | 104,029 |
|
| $ | 42,430 |
|
| $ | 40,723 |
|
| $ | 87,147 |
|
| $ | 86,112 |
|
| $ | 116,398 |
|
| $ | 115,434 |
|
U.S. Government agencies |
|
| 147,889 |
|
|
| 125,115 |
|
|
| 150,524 |
|
|
| 130,364 |
|
|
| 155,659 |
|
|
| 138,054 |
|
|
| 147,062 |
|
|
| 130,695 |
|
Obligations of states, municipalities, and |
|
| 89,370 |
|
|
| 80,520 |
|
|
| 68,019 |
|
|
| 61,876 |
|
|
| 86,160 |
|
|
| 81,709 |
|
|
| 86,022 |
|
|
| 82,275 |
|
Residential mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Agency |
|
| 750,675 |
|
|
| 621,976 |
|
|
| 707,157 |
|
|
| 595,796 |
|
|
| 825,180 |
|
|
| 726,587 |
|
|
| 786,970 |
|
|
| 695,803 |
|
Non-agency |
|
| 124,569 |
|
|
| 96,931 |
|
|
| 130,654 |
|
|
| 106,249 |
|
|
| 136,561 |
|
|
| 113,709 |
|
|
| 122,359 |
|
|
| 100,260 |
|
Commercial mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Agency |
|
| 183,183 |
|
|
| 139,865 |
|
|
| 191,172 |
|
|
| 157,030 |
|
|
| 197,171 |
|
|
| 163,546 |
|
|
| 181,452 |
|
|
| 147,204 |
|
Corporate securities |
|
| 40,696 |
|
|
| 34,972 |
|
|
| 45,302 |
|
|
| 41,436 |
|
|
| 40,667 |
|
|
| 36,752 |
|
|
| 40,681 |
|
|
| 36,171 |
|
Asset-backed securities |
|
| 38,220 |
|
|
| 36,521 |
|
|
| 43,085 |
|
|
| 40,957 |
|
|
| 33,882 |
|
|
| 32,678 |
|
|
| 35,857 |
|
|
| 34,638 |
|
Total available-for-sale |
| $ | 1,480,394 |
|
| $ | 1,239,929 |
|
| $ | 1,378,343 |
|
| $ | 1,174,431 |
|
| $ | 1,562,427 |
|
| $ | 1,379,147 |
|
| $ | 1,516,801 |
|
| $ | 1,342,480 |
|
Held-to-maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Obligations of states, municipalities, and |
| $ | 1,157 |
|
| $ | 1,133 |
|
| $ | 2,705 |
|
| $ | 2,672 |
|
| $ | 1,156 |
|
| $ | 1,149 |
|
| $ | 1,157 |
|
| $ | 1,149 |
|
Total held-to-maturity |
| $ | 1,157 |
|
| $ | 1,133 |
|
| $ | 2,705 |
|
| $ | 2,672 |
|
| $ | 1,156 |
|
| $ | 1,149 |
|
| $ | 1,157 |
|
| $ | 1,149 |
|
6354
Certain securities have fair values less than amortized cost and, therefore, contain unrealized losses. At September 30, 2023,March 31, 2024, we evaluated the securities whichthat had an unrealized loss for credit losses and determined there were none. There were 361320 investment securities with unrealized losses at September 30, 2023.March 31, 2024. 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 September 30, 2023.March 31, 2024. 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 September 30, 2023 |
| Maturity as of March 31, 2024 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Due in One Year or Less |
|
| Due from One to |
|
| Due from Five to |
|
| Due after Ten Years |
| 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 |
| Amortized |
|
| Weighted |
|
| Amortized |
|
| Weighted |
|
| Amortized |
|
| Weighted |
|
| Amortized |
|
| Weighted |
| ||||||||||||||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
U.S. Treasury Notes | $ | 63,232 |
|
|
| 5.38 | % |
| $ | 42,560 |
|
|
| 2.35 | % |
| $ | — |
|
|
| 0.00 | % |
| $ | — |
|
|
| 0.00 | % | $ | 72,421 |
|
|
| 3.91 | % |
| $ | 14,726 |
|
|
| 3.77 | % |
| $ | — |
|
|
| 0.00 | % |
| $ | — |
|
|
| 0.00 | % |
U.S. government agencies |
| — |
|
|
| 0.00 | % |
|
| 51,375 |
|
|
| 1.70 | % |
|
| 89,328 |
|
|
| 1.76 | % |
|
| 7,186 |
|
|
| 4.00 | % |
| — |
|
|
| 0.00 | % |
|
| 70,171 |
|
|
| 2.54 | % |
|
| 78,352 |
|
|
| 1.67 | % |
|
| 7,136 |
|
|
| 4.04 | % |
Obligations of states, |
| 5,121 |
|
|
| 2.97 | % |
|
| 20,683 |
|
|
| 3.08 | % |
|
| 22,400 |
|
|
| 3.34 | % |
|
| 41,166 |
|
|
| 2.50 | % |
| 2,851 |
|
|
| 2.99 | % |
|
| 20,326 |
|
|
| 3.09 | % |
|
| 23,884 |
|
|
| 3.76 | % |
|
| 39,099 |
|
|
| 2.47 | % |
Residential mortgage- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Agency |
| — |
|
|
| 0.00 | % |
|
| 30,700 |
|
|
| 1.65 | % |
|
| 59,886 |
|
|
| 1.63 | % |
|
| 660,089 |
|
|
| 2.02 | % |
| — |
|
|
| 0.00 | % |
|
| 31,356 |
|
|
| 1.64 | % |
|
| 52,702 |
|
|
| 1.61 | % |
|
| 741,122 |
|
|
| 2.50 | % |
Non-agency |
| — |
|
|
| 0.00 | % |
|
| — |
|
|
| 0.00 | % |
|
| — |
|
|
| 0.00 | % |
|
| 124,569 |
|
|
| 2.16 | % |
| — |
|
|
| 0.00 | % |
|
| — |
|
|
| 0.00 | % |
|
| — |
|
|
| 0.00 | % |
|
| 136,561 |
|
|
| 2.58 | % |
Commercial mortgage- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Agency |
| — |
|
|
| 0.00 | % |
|
| — |
|
|
| 0.00 | % |
|
| 13,734 |
|
|
| 1.64 | % |
|
| 169,449 |
|
|
| 2.05 | % |
| — |
|
|
| 0.00 | % |
|
| — |
|
|
| 0.00 | % |
|
| 14,083 |
|
|
| 1.67 | % |
|
| 183,088 |
|
|
| 2.41 | % |
Corporate securities |
| — |
|
|
| 0.00 | % |
|
| 9,647 |
|
|
| 5.09 | % |
|
| 31,049 |
|
|
| 3.70 | % |
|
| — |
|
|
| 0.00 | % |
| — |
|
|
| 0.00 | % |
|
| 13,611 |
|
|
| 4.85 | % |
|
| 27,056 |
|
|
| 3.78 | % |
|
| — |
|
|
| 0.00 | % |
Asset-backed securities |
| — |
|
|
| 0.00 | % |
|
| — |
|
|
| 0.00 | % |
|
| 38,220 |
|
|
| 5.50 | % |
|
| — |
|
|
| 0.00 | % |
| — |
|
|
| 0.00 | % |
|
| — |
|
|
| 0.00 | % |
|
| 33,882 |
|
|
| 5.49 | % |
|
| — |
|
|
| 0.00 | % |
Total available-for-sale | $ | 68,353 |
|
|
| 5.20 | % |
| $ | 154,965 |
|
|
| 2.26 | % |
| $ | 254,617 |
|
|
| 2.66 | % |
| $ | 1,002,459 |
|
|
| 2.08 | % | $ | 75,272 |
|
|
| 3.87 | % |
| $ | 150,190 |
|
|
| 2.76 | % |
| $ | 229,959 |
|
|
| 2.69 | % |
| $ | 1,107,006 |
|
|
| 2.50 | % |
Held-to-maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Obligations of states, | $ | 550 |
|
|
| 2.75 | % |
| $ | 607 |
|
|
| 2.75 | % |
| $ | — |
|
|
| 0.00 | % |
| $ | — |
|
|
| 0.00 | % | $ | 1,156 |
|
|
| 2.75 | % |
| $ | — |
|
|
| 0.00 | % |
| $ | — |
|
|
| 0.00 | % |
| $ | — |
|
|
| 0.00 | % |
Total held-to-maturity | $ | 550 |
|
|
| 2.75 | % |
| $ | 607 |
|
|
| 2.75 | % |
| $ | — |
|
|
| 0.00 | % |
| $ | — |
|
|
| 0.00 | % | $ | 1,156 |
|
|
| 2.75 | % |
| $ | — |
|
|
| 0.00 | % |
| $ | — |
|
|
| 0.00 | % |
| $ | — |
|
|
| 0.00 | % |
Total non-taxable securities classified as obligations of states, municipalities and political subdivisions were $57.8$54.0 million at September 30, 2023, an increaseMarch 31, 2024, a decrease of $13.9$1.7 million from December 31, 2022.2023.
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 September 30, 2023March 31, 2024 or December 31, 2022.2023.
Restricted Stock
As a member of the Federal Home Loan Bank 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 September 30, 2023March 31, 2024 and December 31, 2022,2023, we held $30.5$22.8 million and $28.2$16.3 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 September 30, 2023March 31, 2024 and December 31, 2022.2023.
6455
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 September 30, 2023March 31, 2024 and December 31, 20222023 were $6.6$6.8 billion and $5.4$6.7 billion, respectively, an increase of $1.2 billion,$93.9 million, or 22.0%1.4%. Originated loans and leases were $5.6$5.9 billion at September 30, 2023,March 31, 2024, an increase of $497.7$133.4 million, or 9.7%2.3%, compared to $5.1$5.8 billion at December 31, 2022.2023. Purchased credit deteriorated loans and acquired non-credit-deteriorated loans and leases were $984.9$877.8 million at September 30, 2023, an increaseMarch 31, 2024, a decrease of $694.4$39.5 million, or 239.0%4.3%, compared to $290.5$917.3 million at December 31, 2022.2023. 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 increasedecrease in the purchased credit deteriorated and acquired non-credit-deteriorated loan and lease portfolio was driven by renewals of acquired loans purchased in the Inland acquisition.and leases as well as resolutions and charge-offs.
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 September 30, 2023,March 31, 2024, the loan portfolio included $420.7$424.3 million of unguaranteed 7(a) SBA and USDA loans with exposure to the following top three industries: 17.4%17.3% retail trade, 14.4%13.2% accommodation and food services, and 11.3%11.4% 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):
|
| September 30, 2023 |
|
| December 31, 2022 |
|
| March 31, 2024 |
|
| December 31, 2023 |
| ||||||||||||||||||||
|
| Amount |
|
| % of Total |
|
| Amount |
|
| % of Total |
|
| Amount |
|
| % of Total |
|
| Amount |
|
| % of Total |
| ||||||||
Originated loans and leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Commercial real estate |
| $ | 1,837,531 |
|
|
| 27.8 | % |
| $ | 1,712,152 |
|
|
| 31.6 | % |
| $ | 1,879,149 |
|
|
| 27.7 | % |
| $ | 1,907,029 |
|
|
| 28.5 | % |
Residential real estate |
|
| 454,456 |
|
|
| 6.9 | % |
|
| 426,226 |
|
|
| 7.9 | % |
|
| 488,887 |
|
|
| 7.2 | % |
|
| 465,133 |
|
|
| 7.0 | % |
Construction, land development, and other land |
|
| 406,334 |
|
|
| 6.1 | % |
|
| 438,617 |
|
|
| 8.1 | % |
|
| 416,996 |
|
|
| 6.2 | % |
|
| 415,162 |
|
|
| 6.2 | % |
Commercial and industrial |
|
| 2,286,058 |
|
|
| 34.6 | % |
|
| 2,030,616 |
|
|
| 37.5 | % |
|
| 2,420,952 |
|
|
| 35.7 | % |
|
| 2,311,563 |
|
|
| 34.6 | % |
Installment and other |
|
| 2,968 |
|
|
| 0.0 | % |
|
| 1,410 |
|
|
| 0.0 | % |
|
| 2,855 |
|
|
| 0.0 | % |
|
| 2,919 |
|
|
| 0.0 | % |
Leasing financing receivables |
|
| 641,032 |
|
|
| 9.7 | % |
|
| 521,689 |
|
|
| 9.6 | % |
|
| 691,617 |
|
|
| 10.2 | % |
|
| 665,239 |
|
|
| 10.0 | % |
Total originated loans and leases |
| $ | 5,628,379 |
|
|
| 85.1 | % |
| $ | 5,130,710 |
|
|
| 94.7 | % |
| $ | 5,900,456 |
|
|
| 87.0 | % |
| $ | 5,767,045 |
|
|
| 86.3 | % |
Purchased credit deteriorated loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Commercial real estate |
| $ | 154,573 |
|
|
| 2.3 | % |
| $ | 45,143 |
|
|
| 0.8 | % |
| $ | 117,460 |
|
|
| 1.7 | % |
| $ | 137,807 |
|
|
| 2.1 | % |
Residential real estate |
|
| 47,485 |
|
|
| 0.7 | % |
|
| 32,228 |
|
|
| 0.6 | % |
|
| 39,535 |
|
|
| 0.6 | % |
|
| 42,510 |
|
|
| 0.6 | % |
Construction, land development, and other land |
|
| 29,587 |
|
|
| 0.5 | % |
|
| 372 |
|
|
| 0.0 | % |
|
| 26,418 |
|
|
| 0.4 | % |
|
| 25,331 |
|
|
| 0.4 | % |
Commercial and industrial |
|
| 21,014 |
|
|
| 0.3 | % |
|
| 2,192 |
|
|
| 0.0 | % |
|
| 18,100 |
|
|
| 0.3 | % |
|
| 19,460 |
|
|
| 0.3 | % |
Installment and other |
|
| 125 |
|
|
| 0.0 | % |
|
| 140 |
|
|
| 0.0 | % |
|
| 118 |
|
|
| 0.0 | % |
|
| 125 |
|
|
| 0.0 | % |
Total purchased credit deteriorated loans |
| $ | 252,784 |
|
|
| 3.8 | % |
| $ | 80,075 |
|
|
| 1.4 | % |
| $ | 201,631 |
|
|
| 3.0 | % |
| $ | 225,233 |
|
|
| 3.4 | % |
Acquired non-credit-deteriorated loans and leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Commercial real estate |
| $ | 296,656 |
|
|
| 4.5 | % |
| $ | 152,193 |
|
|
| 2.8 | % |
| $ | 271,720 |
|
|
| 4.0 | % |
| $ | 275,476 |
|
|
| 4.1 | % |
Residential real estate |
|
| 220,091 |
|
|
| 3.4 | % |
|
| 31,508 |
|
|
| 0.6 | % |
|
| 204,589 |
|
|
| 3.0 | % |
|
| 211,887 |
|
|
| 3.2 | % |
Construction, land development, and other land |
|
| 87,087 |
|
|
| 1.3 | % |
|
| — |
|
|
| 0.0 | % |
|
| 85,553 |
|
|
| 1.3 | % |
|
| 86,344 |
|
|
| 1.3 | % |
Commercial and industrial |
|
| 127,253 |
|
|
| 1.9 | % |
|
| 24,266 |
|
|
| 0.5 | % |
|
| 113,673 |
|
|
| 1.7 | % |
|
| 117,538 |
|
|
| 1.7 | % |
Installment and other |
|
| 153 |
|
|
| 0.0 | % |
|
| 209 |
|
|
| 0.0 | % |
|
| 166 |
|
|
| 0.0 | % |
|
| 156 |
|
|
| 0.0 | % |
Leasing financing receivables |
|
| 900 |
|
|
| 0.0 | % |
|
| 2,297 |
|
|
| 0.0 | % |
|
| 426 |
|
|
| 0.0 | % |
|
| 627 |
|
|
| 0.0 | % |
Total acquired non-credit-deteriorated |
| $ | 732,140 |
|
|
| 11.1 | % |
| $ | 210,473 |
|
|
| 3.9 | % |
| $ | 676,127 |
|
|
| 10.0 | % |
| $ | 692,028 |
|
|
| 10.3 | % |
Total loans and leases |
| $ | 6,613,303 |
|
|
| 100.0 | % |
| $ | 5,421,258 |
|
|
| 100.0 | % |
| $ | 6,778,214 |
|
|
| 100.0 | % |
| $ | 6,684,306 |
|
|
| 100.0 | % |
Allowance for credit losses - loans and leases |
|
| (105,696 | ) |
|
|
|
|
| (81,924 | ) |
|
|
|
|
| (102,366 | ) |
|
|
|
|
| (101,686 | ) |
|
|
| ||||
Total loans and leases, net of allowance for credit losses - |
| $ | 6,507,607 |
|
|
|
|
| $ | 5,339,334 |
|
|
|
|
| $ | 6,675,848 |
|
|
|
|
| $ | 6,582,620 |
|
|
|
| ||||
6556
Loans collateralized by real estate comprised 53.4%52.1% and 52.4%53.4% of the loan and lease portfolio at September 30, 2023March 31, 2024 and December 31, 2022,2023, respectively. Commercial real estate loans comprised the largest portion of the real estate loan portfolio as of September 30, 2023March 31, 2024 and December 31, 20222023 and totaled $2.3 billion, or 64.8%64.3% of real estate loans and 34.6%33.5% of the total loan and lease portfolio at September 30, 2023.March 31, 2024. At December 31, 2022,2023, commercial real estate loans totaled $1.9$2.3 billion and comprised 67.3%65.1% of real estate loans and 35.2%34.7% of the total loan and lease portfolio. Purchased credit deteriorated commercial real estate loans increaseddecreased from $45.1$137.8 million as of December 31, 20222023 to $154.6$117.5 million as of September 30, 2023, an increaseMarch 31, 2024, a decrease of $109.4$20.3 million, or 242.4%14.8%. At September 30, 2023March 31, 2024 and December 31, 2022,2023, commercial real estate loans, including both owner-occupied and non-owner occupied, as a percentage of total capital were 301.5%279.7% and 313.4%299.6%, respectively. Non-owner occupied commercial real estate loans were $1.0 billion, or 86.8% and $736.7 million, or 97.5% and 86.6%95.9% of total capital, at September 30, 2023March 31, 2024 and December 31, 2022,2023, respectively.
Residential real estate loans totaled $722.0$733.0 million at September 30, 2023March 31, 2024 compared to $490.0$719.5 million at December 31, 2022,2023, an increase of $232.1$13.5 million, or 47.4%1.9%. The residential real estate loan portfolio comprised 20.4%20.8% and 17.3%20.2% of real estate loans as of September 30, 2023March 31, 2024 and December 31, 2022,2023, respectively, and 10.9% and 9.0%10.8% of total loans and leases at September 30, 2023March 31, 2024 and December 31, 2022, respectively.2023. Purchased credit deteriorated and acquired non-credit-deteriorated residential real estate loans increaseddecreased from $32.2$254.4 million at December 31, 20222023 to $47.5$244.1 million at September 30, 2023, an increaseMarch 31, 2024, a decrease of $15.3$10.3 million, or 47.3%4.0%. Multifamily real estate loans were $396.1$421.3 million at and $304.2$399.3 million, or 37.2%36.5% and 35.6%36.8% of total capital, at September 30, 2023March 31, 2024 and December 31, 2022,2023, respectively.
Construction, land development, and other land loans totaled $523.0$529.0 million at September 30, 2023March 31, 2024 compared to $439.0$526.8 million at December 31, 2022,2023, an increase of $84.0$2.1 million, or 19.1%0.4%. The construction, land development and other land loan portfolio comprised 14.8%15.0% and 15.5%14.8% of real estate loans at September 30, 2023March 31, 2024 and December 31, 2022,2023, respectively, and 7.9% and 8.1% of the total loan and lease portfolio at September 30, 2023March 31, 2024 and December 31, 2022, respectively.2023. The construction, land development and other land loan portfolio was 49.2%45.8% and 51.2%48.3% of total capital, at September 30, 2023March 31, 2024 and December 31, 2022,2023, respectively.
Our exposure to non-owner occupied commercial real estate office space as of March 31, 2024 was $205.5 million, or 3.0% of our total loan and lease portfolio.
Commercial and industrial loans totaled $2.6 billion at March 31, 2024 and $2.4 billion at September 30, 2023 and December 31, 2022,2023, an increase of $377.3$104.2 million, or 18.3%4.3%. The commercial and industrial loan portfolio comprised 36.8%37.7% and 37.9%36.6% of the total loan and lease portfolio at September 30, 2023March 31, 2024 and December 31, 2022,2023, respectively.
Lease financing receivables comprised 9.7%10.2% and 10.0% of the loan and lease portfolio at September 30, 2023March 31, 2024 and December 31, 2022.2023, respectively. Total lease financing receivables were $641.9$692.0 million and $524.0$665.9 million at September 30, 2023March 31, 2024 and December 31, 2022,2023, respectively, an increase of $117.9$26.2 million, or 22.5%3.9%.
6657
Loan and Lease Portfolio Maturities and Interest Rate Sensitivity
The following table shows our loan and lease portfolio by scheduled maturity at September 30, 2023March 31, 2024 (dollars in thousands):
|
| Due in One Year or Less |
|
| Due after One Year |
|
| Due after Five Years |
|
| Due after Fifteen Years |
|
|
|
|
| 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 |
|
| Fixed |
|
| Floating |
|
| Fixed |
|
| Floating |
|
| Fixed |
|
| Floating |
|
| Fixed |
|
| Floating |
|
| Total |
| ||||||||||||||||||
Originated loans and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Commercial real estate |
| $ | 90,751 |
|
| $ | 203,208 |
|
| $ | 700,621 |
|
| $ | 303,343 |
|
| $ | 271,648 |
|
| $ | 102,512 |
|
| $ | 9,022 |
|
| $ | 156,426 |
|
| $ | 1,837,531 |
|
| $ | 109,110 |
|
| $ | 195,360 |
|
| $ | 760,363 |
|
| $ | 314,260 |
|
| $ | 233,805 |
|
| $ | 106,318 |
|
| $ | 10,103 |
|
| $ | 149,830 |
|
| $ | 1,879,149 |
|
Residential real estate |
|
| 10,285 |
|
|
| 34,124 |
|
|
| 131,670 |
|
|
| 70,078 |
|
|
| 43,107 |
|
|
| 101,081 |
|
|
| 61,315 |
|
|
| 2,796 |
|
|
| 454,456 |
|
|
| 19,160 |
|
|
| 64,578 |
|
|
| 163,009 |
|
|
| 74,723 |
|
|
| 17,331 |
|
|
| 87,546 |
|
|
| 59,798 |
|
|
| 2,742 |
|
|
| 488,887 |
|
Construction, |
|
| 2,920 |
|
|
| 125,213 |
|
|
| 24,598 |
|
|
| 215,373 |
|
|
| 22,904 |
|
|
| 15,314 |
|
|
| 12 |
|
|
| — |
|
|
| 406,334 |
|
|
| 692 |
|
|
| 175,702 |
|
|
| 45,418 |
|
|
| 174,351 |
|
|
| 15,957 |
|
|
| 4,521 |
|
|
| 355 |
|
|
| — |
|
|
| 416,996 |
|
Commercial and |
|
| 35,634 |
|
|
| 411,439 |
|
|
| 333,181 |
|
|
| 1,044,061 |
|
|
| 158,795 |
|
|
| 253,452 |
|
|
| 32,460 |
|
|
| 17,036 |
|
|
| 2,286,058 |
|
|
| 34,089 |
|
|
| 472,033 |
|
|
| 373,251 |
|
|
| 1,080,767 |
|
|
| 151,248 |
|
|
| 269,175 |
|
|
| 31,099 |
|
|
| 9,290 |
|
|
| 2,420,952 |
|
Installment and other |
|
| 249 |
|
|
| — |
|
|
| 878 |
|
|
| 1,633 |
|
|
| 208 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,968 |
|
|
| 385 |
|
|
| — |
|
|
| 642 |
|
|
| 1,633 |
|
|
| 195 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,855 |
|
Leasing financing receivables |
|
| 16,826 |
|
|
| — |
|
|
| 562,643 |
|
|
| — |
|
|
| 61,563 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 641,032 |
|
|
| 20,630 |
|
|
| — |
|
|
| 618,459 |
|
|
| — |
|
|
| 52,528 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 691,617 |
|
Total originated |
| $ | 156,665 |
|
| $ | 773,984 |
|
| $ | 1,753,591 |
|
| $ | 1,634,488 |
|
| $ | 558,225 |
|
| $ | 472,359 |
|
| $ | 102,809 |
|
| $ | 176,258 |
|
| $ | 5,628,379 |
|
| $ | 184,066 |
|
| $ | 907,673 |
|
| $ | 1,961,142 |
|
| $ | 1,645,734 |
|
| $ | 471,064 |
|
| $ | 467,560 |
|
| $ | 101,355 |
|
| $ | 161,862 |
|
| $ | 5,900,456 |
|
Purchased credit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Commercial real estate |
| $ | 39,533 |
|
| $ | 20,718 |
|
| $ | 46,625 |
|
| $ | 27,530 |
|
| $ | 4,662 |
|
| $ | 15,099 |
|
| $ | 133 |
|
| $ | 273 |
|
| $ | 154,573 |
|
| $ | 32,254 |
|
| $ | 7,067 |
|
| $ | 37,898 |
|
| $ | 24,908 |
|
| $ | 4,450 |
|
| $ | 10,629 |
|
| $ | 122 |
|
| $ | 132 |
|
| $ | 117,460 |
|
Residential real estate |
|
| 12,017 |
|
|
| 766 |
|
|
| 18,102 |
|
|
| 589 |
|
|
| 6,481 |
|
|
| 420 |
|
|
| 5,694 |
|
|
| 3,416 |
|
|
| 47,485 |
|
|
| 7,787 |
|
|
| 119 |
|
|
| 15,949 |
|
|
| 575 |
|
|
| 5,876 |
|
|
| 407 |
|
|
| 5,595 |
|
|
| 3,227 |
|
|
| 39,535 |
|
Construction, |
|
| — |
|
|
| 29,560 |
|
|
| 27 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 29,587 |
|
|
| 7 |
|
|
| 26,403 |
|
|
| 8 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 26,418 |
|
Commercial and |
|
| 537 |
|
|
| 1,843 |
|
|
| 8,683 |
|
|
| 3,055 |
|
|
| — |
|
|
| 6,896 |
|
|
| — |
|
|
| — |
|
|
| 21,014 |
|
|
| 230 |
|
|
| 741 |
|
|
| 8,013 |
|
|
| 2,659 |
|
|
| — |
|
|
| 6,457 |
|
|
| — |
|
|
| — |
|
|
| 18,100 |
|
Installment and other |
|
| — |
|
|
| — |
|
|
| 22 |
|
|
| — |
|
|
| 103 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 125 |
|
|
| 4 |
|
|
| — |
|
|
| 18 |
|
|
| — |
|
|
| 96 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 118 |
|
Total purchased |
| $ | 52,087 |
|
| $ | 52,887 |
|
| $ | 73,459 |
|
| $ | 31,174 |
|
| $ | 11,246 |
|
| $ | 22,415 |
|
| $ | 5,827 |
|
| $ | 3,689 |
|
| $ | 252,784 |
|
| $ | 40,282 |
|
| $ | 34,330 |
|
| $ | 61,886 |
|
| $ | 28,142 |
|
| $ | 10,422 |
|
| $ | 17,493 |
|
| $ | 5,717 |
|
| $ | 3,359 |
|
| $ | 201,631 |
|
Acquired non-credit- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Commercial real estate |
| $ | 17,123 |
|
| $ | 16,321 |
|
| $ | 167,777 |
|
| $ | 35,130 |
|
| $ | 16,401 |
|
| $ | 24,456 |
|
| $ | 2,512 |
|
| $ | 16,936 |
|
| $ | 296,656 |
|
| $ | 30,991 |
|
| $ | 27,239 |
|
| $ | 147,626 |
|
| $ | 18,823 |
|
| $ | 6,528 |
|
| $ | 22,956 |
|
| $ | 2,477 |
|
| $ | 15,080 |
|
| $ | 271,720 |
|
Residential real estate |
|
| 7,386 |
|
|
| 5,445 |
|
|
| 47,415 |
|
|
| 12,642 |
|
|
| 26,248 |
|
|
| 10,596 |
|
|
| 6,468 |
|
|
| 103,891 |
|
|
| 220,091 |
|
|
| 13,113 |
|
|
| 1,131 |
|
|
| 40,756 |
|
|
| 12,140 |
|
|
| 22,418 |
|
|
| 9,368 |
|
|
| 7,150 |
|
|
| 98,513 |
|
|
| 204,589 |
|
Construction, land |
|
| 92 |
|
|
| 35,064 |
|
|
| 14,130 |
|
|
| 23,578 |
|
|
| — |
|
|
| — |
|
|
| 14,223 |
|
|
| — |
|
|
| 87,087 |
|
|
| — |
|
|
| 17,983 |
|
|
| 10,616 |
|
|
| 40,590 |
|
|
| — |
|
|
| — |
|
|
| 5,111 |
|
|
| 11,253 |
|
|
| 85,553 |
|
Commercial and industrial |
|
| 2,359 |
|
|
| 9,961 |
|
|
| 32,919 |
|
|
| 13,089 |
|
|
| 62,805 |
|
|
| 4,146 |
|
|
| — |
|
|
| 1,974 |
|
|
| 127,253 |
|
|
| 2,162 |
|
|
| 7,453 |
|
|
| 35,269 |
|
|
| 9,120 |
|
|
| 57,778 |
|
|
| 1,891 |
|
|
| — |
|
|
| — |
|
|
| 113,673 |
|
Installment and other |
|
| 30 |
|
|
| — |
|
|
| 123 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 153 |
|
|
| 42 |
|
|
| — |
|
|
| 124 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 166 |
|
Leasing financing |
|
| 275 |
|
|
| — |
|
|
| 625 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 900 |
|
|
| 321 |
|
|
| — |
|
|
| 105 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 426 |
|
Total acquired |
| $ | 27,265 |
|
| $ | 66,791 |
|
| $ | 262,989 |
|
| $ | 84,439 |
|
| $ | 105,454 |
|
| $ | 39,198 |
|
| $ | 23,203 |
|
| $ | 122,801 |
|
| $ | 732,140 |
|
| $ | 46,629 |
|
| $ | 53,806 |
|
| $ | 234,496 |
|
| $ | 80,673 |
|
| $ | 86,724 |
|
| $ | 34,215 |
|
| $ | 14,738 |
|
| $ | 124,846 |
|
| $ | 676,127 |
|
Total loans and leases |
| $ | 236,017 |
|
| $ | 893,662 |
|
| $ | 2,090,039 |
|
| $ | 1,750,101 |
|
| $ | 674,925 |
|
| $ | 533,972 |
|
| $ | 131,839 |
|
| $ | 302,748 |
|
| $ | 6,613,303 |
|
| $ | 270,977 |
|
| $ | 995,809 |
|
| $ | 2,257,524 |
|
| $ | 1,754,549 |
|
| $ | 568,210 |
|
| $ | 519,268 |
|
| $ | 121,810 |
|
| $ | 290,067 |
|
| $ | 6,778,214 |
|
At September 30, 2023, 47.4%March 31, 2024, 47.5% of the loan and lease portfolio bears interest at fixed rates and 52.6%52.5% 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 310-30,326, 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.
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
6758
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 $105.7$102.4 million at September 30, 2023March 31, 2024 compared to $81.9$101.7 million at December 31, 2022,2023, an increase of $23.8 million,$680,000, or 29.0%0.7%. The increase was primarily due to acquired loans and an increase in specific reserves related to loansqualitative adjustments and growth in the loan and lease portfolio, offset by charge-offs on on individually evaluated for impairment.loans.. Total ACL to total loans and leases held for investment, net before ACL, was 1.60%1.51% and 1.51%1.52% of total loans and leases at September 30, 2023March 31, 2024 and December 31, 2022,2023, respectively. As of September 30, 2023,March 31, 2024, approximately $33.4$30.1 million of the ACL was allocated to unguaranteed portion of SBA 7(a) and USDA loans.
6859
The following tables present an analysis of the allowance of the loancredit losses - loans and lease lossesleases for the periods presented (dollars in thousands):
|
| Commercial |
|
| Residential |
|
| Construction, |
|
| Commercial |
|
| Installment |
|
| Lease |
|
| Total |
|
| Commercial |
|
| Residential |
|
| Construction, |
|
| Commercial |
|
| Installment |
|
| Lease |
|
| Total |
| ||||||||||||||
Balance at June 30, 2023 |
| $ | 26,377 |
|
| $ | 2,544 |
|
| $ | 1,935 |
|
| $ | 53,640 |
|
| $ | 43 |
|
| $ | 8,126 |
|
| $ | 92,665 |
| ||||||||||||||||||||||||||||
Adjustment for acquired PCD loans |
|
| 8,230 |
|
|
| 660 |
|
|
| 97 |
|
|
| 1,609 |
|
|
| — |
|
|
| — |
|
|
| 10,596 |
| ||||||||||||||||||||||||||||
Balance at December 31, 2023 |
| $ | 33,237 |
|
| $ | 3,495 |
|
| $ | 2,906 |
|
| $ | 53,782 |
|
| $ | 36 |
|
| $ | 8,230 |
|
| $ | 101,686 |
| ||||||||||||||||||||||||||||
Provision/(recapture) for PCD loans |
|
| (2,904 | ) |
|
| (2 | ) |
|
| 217 |
|
|
| (543 | ) |
|
| — |
|
|
| — |
|
|
| (3,232 | ) |
|
| 629 |
|
|
| (25 | ) |
|
| (61 | ) |
|
| (347 | ) |
|
| — |
|
|
| — |
|
|
| 196 |
|
Provision/(recapture) for acquired |
|
| 473 |
|
|
| 769 |
|
|
| 694 |
|
|
| 904 |
|
|
| 1 |
|
|
| (14 | ) |
|
| 2,827 |
|
|
| (44 | ) |
|
| 3 |
|
|
| 17 |
|
|
| (42 | ) |
|
|
|
|
| (2 | ) |
|
| (68 | ) | |
Provision/(recapture) for originated loans |
|
| 4,045 |
|
|
| 174 |
|
|
| 257 |
|
|
| 2,968 |
|
|
| 3 |
|
|
| 823 |
|
|
| 8,270 |
|
|
| 239 |
|
|
| (126 | ) |
|
| 68 |
|
|
| 6,225 |
|
|
| (3 | ) |
|
| 360 |
|
|
| 6,763 |
|
Total provision/(recapture) |
| $ | 1,614 |
|
| $ | 941 |
|
| $ | 1,168 |
|
| $ | 3,329 |
|
| $ | 4 |
|
| $ | 809 |
|
| $ | 7,865 |
|
| $ | 824 |
|
| $ | (148 | ) |
| $ | 24 |
|
| $ | 5,836 |
|
| $ | (3 | ) |
| $ | 358 |
|
| $ | 6,891 |
|
Charge-offs for PCD |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (74 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (74 | ) |
Charge-offs for acquired non-credit |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (58 | ) |
|
| — |
|
|
| — |
|
|
| (58 | ) |
Charge-offs for originated loans |
|
| (1,360 | ) |
|
| (12 | ) |
|
| — |
|
|
| (4,200 | ) |
|
| (3 | ) |
|
| (604 | ) |
|
| (6,179 | ) |
|
| (2,983 | ) |
|
| — |
|
|
| — |
|
|
| (3,561 | ) |
|
| — |
|
|
| (373 | ) |
|
| (6,917 | ) |
Total charge-offs |
| $ | (1,360 | ) |
| $ | (12 | ) |
| $ | — |
|
| $ | (4,200 | ) |
| $ | (3 | ) |
| $ | (604 | ) |
| $ | (6,179 | ) |
| $ | (3,057 | ) |
| $ | — |
|
| $ | — |
|
| $ | (3,619 | ) |
| $ | — |
|
| $ | (373 | ) |
| $ | (7,049 | ) |
Recoveries for PCD |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4 |
|
Recoveries for acquired non-credit |
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| |
Recoveries for originated loans |
|
| 124 |
|
|
| 18 |
|
|
| — |
|
|
| 460 |
|
|
| — |
|
|
| 147 |
|
|
| 749 |
|
|
| 432 |
|
|
| 1 |
|
|
| — |
|
|
| 232 |
|
|
| — |
|
|
| 169 |
|
|
| 834 |
|
Total recoveries |
| $ | 124 |
|
| $ | 18 |
|
| $ | — |
|
| $ | 460 |
|
| $ | — |
|
| $ | 147 |
|
| $ | 749 |
|
| $ | 436 |
|
| $ | 1 |
|
| $ | — |
|
| $ | 232 |
|
| $ | — |
|
| $ | 169 |
|
| $ | 838 |
|
Net (charge-offs) recoveries |
|
| (1,236 | ) |
|
| 6 |
|
|
| — |
|
|
| (3,740 | ) |
|
| (3 | ) |
|
| (457 | ) |
|
| (5,430 | ) |
|
| (2,621 | ) |
|
| 1 |
|
|
| — |
|
|
| (3,387 | ) |
|
| — |
|
|
| (204 | ) |
|
| (6,211 | ) |
Balance at September 30, 2023 |
| $ | 34,985 |
|
| $ | 4,151 |
|
| $ | 3,200 |
|
| $ | 54,838 |
|
| $ | 44 |
|
| $ | 8,478 |
|
| $ | 105,696 |
| ||||||||||||||||||||||||||||
Balance at March 31, 2024 |
| $ | 31,440 |
|
| $ | 3,348 |
|
| $ | 2,930 |
|
| $ | 56,231 |
|
| $ | 33 |
|
| $ | 8,384 |
|
| $ | 102,366 |
| ||||||||||||||||||||||||||||
Ending ACL Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
| |||||||||||||
PCD loans |
| $ | 6,059 |
|
| $ | 999 |
|
| $ | 321 |
|
| $ | 1,105 |
|
| $ | 2 |
|
| $ | — |
|
| $ | 8,486 |
|
| $ | 7,392 |
|
| $ | 877 |
|
| $ | 150 |
|
| $ | 1,722 |
|
| $ | 1 |
|
| $ | — |
|
| $ | 10,142 |
|
Acquired non-credit-deteriorated loans |
|
| 3,534 |
|
|
| 865 |
|
|
| 694 |
|
|
| 1,588 |
|
|
| 2 |
|
|
| 3 |
|
|
| 6,686 |
|
|
| 2,026 |
|
|
| 639 |
|
|
| 624 |
|
|
| 1,310 |
|
|
| 2 |
|
|
| 1 |
|
|
| 4,602 |
|
Originated loans |
|
| 25,392 |
|
|
| 2,287 |
|
|
| 2,185 |
|
|
| 52,145 |
|
|
| 40 |
|
|
| 8,475 |
|
|
| 90,524 |
|
|
| 22,022 |
|
|
| 1,832 |
|
|
| 2,156 |
|
|
| 53,199 |
|
|
| 30 |
|
|
| 8,383 |
|
|
| 87,622 |
|
Balance at September 30, 2023 |
| $ | 34,985 |
|
| $ | 4,151 |
|
| $ | 3,200 |
|
| $ | 54,838 |
|
| $ | 44 |
|
| $ | 8,478 |
|
| $ | 105,696 |
| ||||||||||||||||||||||||||||
Balance at March 31, 2024 |
| $ | 31,440 |
|
| $ | 3,348 |
|
| $ | 2,930 |
|
| $ | 56,231 |
|
| $ | 33 |
|
| $ | 8,384 |
|
| $ | 102,366 |
| ||||||||||||||||||||||||||||
Loans individually |
| $ | 13,199 |
|
| $ | — |
|
| $ | — |
|
| $ | 15,135 |
|
| $ | — |
|
| $ | — |
|
| $ | 28,334 |
|
| $ | 8,905 |
|
| $ | — |
|
| $ | — |
|
| $ | 12,772 |
|
| $ | — |
|
| $ | — |
|
| $ | 21,677 |
|
Loans collectively |
|
| 21,786 |
|
|
| 4,151 |
|
|
| 3,200 |
|
|
| 39,703 |
|
|
| 44 |
|
|
| 8,478 |
|
|
| 77,362 |
|
|
| 22,535 |
|
|
| 3,348 |
|
|
| 2,930 |
|
|
| 43,459 |
|
|
| 33 |
|
|
| 8,384 |
|
|
| 80,689 |
|
Balance at September 30, 2023 |
| $ | 34,985 |
|
| $ | 4,151 |
|
| $ | 3,200 |
|
| $ | 54,838 |
|
| $ | 44 |
|
| $ | 8,478 |
|
| $ | 105,696 |
| ||||||||||||||||||||||||||||
Balance at March 31, 2024 |
| $ | 31,440 |
|
| $ | 3,348 |
|
| $ | 2,930 |
|
| $ | 56,231 |
|
| $ | 33 |
|
| $ | 8,384 |
|
| $ | 102,366 |
| ||||||||||||||||||||||||||||
Loans and leases ending balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Loans individually |
| $ | 67,596 |
|
| $ | — |
|
| $ | — |
|
| $ | 48,814 |
|
| $ | — |
|
| $ | — |
|
| $ | 116,410 |
|
| $ | 40,778 |
|
| $ | 4,658 |
|
| $ | — |
|
| $ | 39,889 |
|
| $ | — |
|
| $ | — |
|
| $ | 85,325 |
|
Loans collectively |
|
| 2,221,164 |
|
|
| 722,032 |
|
|
| 523,008 |
|
|
| 2,385,511 |
|
|
| 3,246 |
|
|
| 641,932 |
|
|
| 6,496,893 |
|
|
| 2,227,551 |
|
|
| 728,353 |
|
|
| 528,967 |
|
|
| 2,512,836 |
|
|
| 3,139 |
|
|
| 692,043 |
|
|
| 6,692,889 |
|
Total loans and leases at |
| $ | 2,288,760 |
|
| $ | 722,032 |
|
| $ | 523,008 |
|
| $ | 2,434,325 |
|
| $ | 3,246 |
|
| $ | 641,932 |
|
| $ | 6,613,303 |
| ||||||||||||||||||||||||||||
Total loans and leases at |
| $ | 2,268,329 |
|
| $ | 733,011 |
|
| $ | 528,967 |
|
| $ | 2,552,725 |
|
| $ | 3,139 |
|
| $ | 692,043 |
|
| $ | 6,778,214 |
| ||||||||||||||||||||||||||||
Ratio of net charge-offs to average |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
PCD loans |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
Acquired non-credit-deteriorated loans |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
Originated loans |
|
| 0.07 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.23 | % |
|
| 0.00 | % |
|
| 0.03 | % |
|
| 0.33 | % |
|
| 0.16 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.20 | % |
|
| 0.00 | % |
|
| 0.01 | % |
|
| 0.37 | % |
Loans ending balance as a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Loans individually |
|
| 1.02 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.74 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 1.76 | % |
|
| 0.70 | % |
|
| 0.05 | % |
|
| 0.00 | % |
|
| 0.50 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 1.25 | % |
Loans collectively |
|
| 33.59 | % |
|
| 10.92 | % |
|
| 7.91 | % |
|
| 36.06 | % |
|
| 0.05 | % |
|
| 9.71 | % |
|
| 98.24 | % |
|
| 32.77 | % |
|
| 10.76 | % |
|
| 7.80 | % |
|
| 37.16 | % |
|
| 0.05 | % |
|
| 10.21 | % |
|
| 98.75 | % |
Total |
|
| 33.47 | % |
|
| 10.81 | % |
|
| 7.80 | % |
|
| 37.66 | % |
|
| 0.05 | % |
|
| 10.21 | % |
|
| 100.00 | % | ||||||||||||||||||||||||||||
6960
|
| Commercial |
|
| Residential |
|
| Construction, |
|
| Commercial |
|
| Installment |
|
| Lease |
|
| Total |
| |||||||
Balance at December 31, 2022 |
| $ | 26,062 |
|
| $ | 3,140 |
|
| $ | 3,134 |
|
| $ | 41,888 |
|
| $ | 24 |
|
| $ | 7,676 |
|
| $ | 81,924 |
|
Adjustment for acquired PCD loans |
|
| 8,230 |
|
|
| 660 |
|
|
| 97 |
|
|
| 1,609 |
|
|
| — |
|
|
| — |
|
|
| 10,596 |
|
Provision/(recapture) for PCD loans |
|
| (3,322 | ) |
|
| (335 | ) |
|
| 211 |
|
|
| (550 | ) |
|
| — |
|
|
| — |
|
|
| (3,996 | ) |
Provision/(recapture) for acquired |
|
| (202 | ) |
|
| 569 |
|
|
| 693 |
|
|
| 359 |
|
|
| 1 |
|
|
| (31 | ) |
|
| 1,389 |
|
Provision/(recapture) for originated loans |
|
| 8,378 |
|
|
| 56 |
|
|
| (935 | ) |
|
| 17,484 |
|
|
| 18 |
|
|
| 1,650 |
|
|
| 26,651 |
|
Total provision/(recapture) |
| $ | 4,854 |
|
| $ | 290 |
|
| $ | (31 | ) |
| $ | 17,293 |
|
| $ | 19 |
|
| $ | 1,619 |
|
| $ | 24,044 |
|
Charge-offs for PCD |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Charge-offs for acquired non-credit |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Charge-offs for originated loans |
|
| (5,271 | ) |
|
| (21 | ) |
|
| — |
|
|
| (8,087 | ) |
|
| (3 | ) |
|
| (1,370 | ) |
|
| (14,752 | ) |
Total charge-offs |
| $ | (5,271 | ) |
| $ | (21 | ) |
| $ | — |
|
| $ | (8,087 | ) |
| $ | (3 | ) |
| $ | (1,370 | ) |
| $ | (14,752 | ) |
Recoveries for PCD |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Recoveries for acquired non-credit |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Recoveries for originated loans |
|
| 1,111 |
|
|
| 82 |
|
|
| — |
|
|
| 2,134 |
|
|
| 4 |
|
|
| 553 |
|
|
| 3,884 |
|
Total recoveries |
| $ | 1,111 |
|
| $ | 82 |
|
| $ | — |
|
| $ | 2,134 |
|
| $ | 4 |
|
| $ | 553 |
|
| $ | 3,884 |
|
Net (charge-offs) recoveries |
|
| 4,160 |
|
|
| (61 | ) |
|
| — |
|
|
| 5,953 |
|
|
| (1 | ) |
|
| 817 |
|
|
| 10,868 |
|
Balance at September 30, 2023 |
| $ | 34,986 |
|
| $ | 4,151 |
|
| $ | 3,200 |
|
| $ | 54,837 |
|
| $ | 44 |
|
| $ | 8,478 |
|
| $ | 105,696 |
|
Ending ACL Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
| ||||||
PCD loans |
| $ | 6,059 |
|
| $ | 999 |
|
| $ | 321 |
|
| $ | 1,105 |
|
| $ | 2 |
|
| $ | — |
|
| $ | 8,486 |
|
Acquired non-credit-deteriorated loans |
|
| 3,534 |
|
|
| 865 |
|
|
| 694 |
|
|
| 1,588 |
|
|
| 2 |
|
|
| 3 |
|
|
| 6,686 |
|
Originated loans |
|
| 25,392 |
|
|
| 2,287 |
|
|
| 2,185 |
|
|
| 52,145 |
|
|
| 40 |
|
|
| 8,475 |
|
|
| 90,524 |
|
Balance at September 30, 2023 |
| $ | 34,985 |
|
| $ | 4,151 |
|
| $ | 3,200 |
|
| $ | 54,838 |
|
| $ | 44 |
|
| $ | 8,478 |
|
| $ | 105,696 |
|
Loans individually |
| $ | 13,199 |
|
| $ | — |
|
| $ | — |
|
| $ | 15,135 |
|
| $ | — |
|
| $ | — |
|
| $ | 28,334 |
|
Loans collectively |
|
| 21,786 |
|
|
| 4,151 |
|
|
| 3,200 |
|
|
| 39,703 |
|
|
| 44 |
|
|
| 8,478 |
|
|
| 77,362 |
|
Balance at September 30, 2023 |
| $ | 34,985 |
|
| $ | 4,151 |
|
| $ | 3,200 |
|
| $ | 54,838 |
|
| $ | 44 |
|
| $ | 8,478 |
|
| $ | 105,696 |
|
Loans and leases ending balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Loans individually |
| $ | 67,596 |
|
| $ | — |
|
| $ | — |
|
| $ | 48,814 |
|
| $ | — |
|
| $ | — |
|
| $ | 116,410 |
|
Loans collectively |
|
| 2,221,164 |
|
|
| 722,032 |
|
|
| 523,008 |
|
|
| 2,385,511 |
|
|
| 3,246 |
|
|
| 641,932 |
|
|
| 6,496,893 |
|
Total loans and leases at |
| $ | 2,288,760 |
|
| $ | 722,032 |
|
| $ | 523,008 |
|
| $ | 2,434,325 |
|
| $ | 3,246 |
|
| $ | 641,932 |
|
| $ | 6,613,303 |
|
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 |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
Originated loans |
|
| 0.09 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.14 | % |
|
| 0.00 | % |
|
| 0.02 | % |
|
| 0.25 | % |
Loans ending balance as a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Loans individually |
|
| 1.02 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.74 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 1.76 | % |
Loans collectively |
|
| 33.59 | % |
|
| 10.92 | % |
|
| 7.91 | % |
|
| 36.06 | % |
|
| 0.05 | % |
|
| 9.71 | % |
|
| 98.24 | % |
70
|
| Commercial |
|
| Residential |
|
| Construction, |
|
| Commercial |
|
| Installment |
|
| Lease |
|
| Total |
| |||||||
Balance at June 30, 2022 |
| $ | 19,818 |
|
| $ | 2,489 |
|
| $ | 1,792 |
|
| $ | 34,735 |
|
| $ | 11 |
|
| $ | 3,591 |
|
| $ | 62,436 |
|
Provision/(recapture) for acquired |
|
| 79 |
|
|
| 39 |
|
|
| 70 |
|
|
| (343 | ) |
|
| (1 | ) |
|
| — |
|
|
| (156 | ) |
Provision/(recapture) for acquired |
|
| (409 | ) |
|
| (2 | ) |
|
| — |
|
|
| (220 | ) |
|
| — |
|
|
| (144 | ) |
|
| (775 | ) |
Provision for originated loans |
|
| 1,445 |
|
|
| 167 |
|
|
| 483 |
|
|
| 2,603 |
|
|
| 3 |
|
|
| 406 |
|
|
| 5,107 |
|
Total provision |
| $ | 1,115 |
|
| $ | 204 |
|
| $ | 553 |
|
| $ | 2,040 |
|
| $ | 2 |
|
| $ | 262 |
|
| $ | 4,176 |
|
Charge-offs for acquired |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1 | ) |
|
| — |
|
|
| — |
|
|
| (1 | ) |
Charge-offs for acquired |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (28 | ) |
|
| (28 | ) |
Charge-offs for originated loans |
|
| (1,102 | ) |
|
| (17 | ) |
|
| — |
|
|
| (1,183 | ) |
|
| (3 | ) |
|
| (388 | ) |
|
| (2,693 | ) |
Total charge-offs |
| $ | (1,102 | ) |
| $ | (17 | ) |
| $ | — |
|
| $ | (1,184 | ) |
| $ | (3 | ) |
| $ | (416 | ) |
| $ | (2,722 | ) |
Recoveries for acquired |
|
| 6 |
|
|
| 2 |
|
|
| — |
|
|
| 37 |
|
|
| — |
|
|
| — |
|
|
| 45 |
|
Recoveries for acquired |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 164 |
|
|
| 164 |
|
Recoveries for originated |
|
| 213 |
|
|
| 3 |
|
|
| — |
|
|
| 124 |
|
|
| — |
|
|
| 216 |
|
|
| 556 |
|
Total recoveries |
| $ | 219 |
|
| $ | 5 |
|
| $ | — |
|
| $ | 161 |
|
| $ | — |
|
| $ | 380 |
|
| $ | 765 |
|
Less: Net charge-offs (recoveries) |
|
| 883 |
|
|
| 12 |
|
|
| — |
|
|
| 1,023 |
|
|
| 3 |
|
|
| 36 |
|
|
| 1,957 |
|
Balance at September30, 2022 |
| $ | 20,050 |
|
| $ | 2,681 |
|
| $ | 2,345 |
|
| $ | 35,752 |
|
| $ | 10 |
|
| $ | 3,817 |
|
| $ | 64,655 |
|
Acquired impaired loans |
| $ | 1,325 |
|
| $ | 850 |
|
| $ | 98 |
|
| $ | 79 |
|
| $ | 2 |
|
| $ | — |
|
| $ | 2,354 |
|
Acquired non-impaired |
|
| 1,052 |
|
|
| 48 |
|
|
| — |
|
|
| 1,127 |
|
|
| 1 |
|
|
| 24 |
|
|
| 2,252 |
|
Originated loans and leases |
|
| 17,673 |
|
|
| 1,783 |
|
|
| 2,247 |
|
|
| 34,546 |
|
|
| 7 |
|
|
| 3,793 |
|
|
| 60,049 |
|
Balance at September 30, 2022 |
| $ | 20,050 |
|
| $ | 2,681 |
|
| $ | 2,345 |
|
| $ | 35,752 |
|
| $ | 10 |
|
| $ | 3,817 |
|
| $ | 64,655 |
|
Ending ALLL balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Acquired impaired loans |
| $ | 1,325 |
|
| $ | 850 |
|
| $ | 98 |
|
| $ | 79 |
|
| $ | 2 |
|
| $ | — |
|
| $ | 2,354 |
|
Acquired non-impaired loans |
|
| 6,094 |
|
|
| — |
|
|
| — |
|
|
| 12,584 |
|
|
| — |
|
|
| — |
|
|
| 18,678 |
|
Acquired non-impaired loans |
|
| 12,631 |
|
|
| 1,831 |
|
|
| 2,247 |
|
|
| 23,089 |
|
|
| 8 |
|
|
| 3,817 |
|
|
| 43,623 |
|
Balance at September 30, 2022 |
| $ | 20,050 |
|
| $ | 2,681 |
|
| $ | 2,345 |
|
| $ | 35,752 |
|
| $ | 10 |
|
| $ | 3,817 |
|
| $ | 64,655 |
|
Loans and leases ending balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Acquired impaired loans |
| $ | 56,974 |
|
| $ | 37,246 |
|
| $ | 1,144 |
|
| $ | 3,029 |
|
| $ | 153 |
|
| $ | — |
|
| $ | 98,546 |
|
Acquired non-impaired loans |
|
| 44,977 |
|
|
| 4,782 |
|
|
| 5,541 |
|
|
| 35,979 |
|
|
| — |
|
|
| — |
|
|
| 91,279 |
|
Acquired non-impaired loans |
|
| 1,767,043 |
|
|
| 439,816 |
|
|
| 450,922 |
|
|
| 1,930,822 |
|
|
| 1,215 |
|
|
| 495,828 |
|
|
| 5,085,646 |
|
Total loans and leases at |
| $ | 1,868,994 |
|
| $ | 481,844 |
|
| $ | 457,607 |
|
| $ | 1,969,830 |
|
| $ | 1,368 |
|
| $ | 495,828 |
|
| $ | 5,275,471 |
|
Ratio of net charge-offs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Acquired impaired loans |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
Acquired non-impaired loans |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| (0.01 | )% |
|
| (0.01 | )% |
Originated loans and leases |
|
| 0.07 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.08 | % |
|
| 0.00 | % |
|
| 0.01 | % |
|
| 0.16 | % |
Loans and leases ending balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Acquired impaired loans |
|
| 1.08 | % |
|
| 0.71 | % |
|
| 0.02 | % |
|
| 0.06 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 1.87 | % |
Acquired non-impaired loans |
|
| 0.85 | % |
|
| 0.09 | % |
|
| 0.11 | % |
|
| 0.68 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 1.73 | % |
Acquired non-impaired loans |
|
| 33.50 | % |
|
| 8.33 | % |
|
| 8.55 | % |
|
| 36.60 | % |
|
| 0.02 | % |
|
| 9.40 | % |
|
| 96.40 | % |
71
| Commercial |
|
| Residential |
|
| Construction, |
|
| Commercial |
|
| Installment |
|
| Lease |
|
| Total |
| |||||||
Balance at December 31, 2021 | $ | 16,918 |
|
| $ | 1,628 |
|
| $ | 522 |
|
| $ | 33,129 |
|
| $ | 9 |
|
| $ | 2,806 |
|
| $ | 55,012 |
|
Provision/(recapture) for acquired |
| (458 | ) |
|
| (164 | ) |
|
| 95 |
|
|
| (364 | ) |
|
| — |
|
|
| — |
|
|
| (891 | ) |
Provision/(recapture) for acquired |
| (2,298 | ) |
|
| 23 |
|
|
| — |
|
|
| (1,696 | ) |
|
| — |
|
|
| (197 | ) |
|
| (4,168 | ) |
Provision for originated loans |
| 7,221 |
|
|
| 1,197 |
|
|
| 1,728 |
|
|
| 8,410 |
|
|
| 4 |
|
|
| 1,578 |
|
|
| 20,138 |
|
Total provision | $ | 4,465 |
|
| $ | 1,056 |
|
| $ | 1,823 |
|
| $ | 6,350 |
|
| $ | 4 |
|
| $ | 1,381 |
|
| $ | 15,079 |
|
Charge-offs for acquired |
| (34 | ) |
|
| — |
|
|
| — |
|
|
| (2 | ) |
|
| — |
|
|
| — |
|
|
| (36 | ) |
Charge-offs for acquired |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (28 | ) |
|
| (28 | ) |
Charge-offs for originated loans |
| (1,805 | ) |
|
| (17 | ) |
|
| — |
|
|
| (4,299 | ) |
|
| (3 | ) |
|
| (1,075 | ) |
|
| (7,199 | ) |
Total charge-offs | $ | (1,839 | ) |
| $ | (17 | ) |
| $ | — |
|
| $ | (4,301 | ) |
| $ | (3 | ) |
| $ | (1,103 | ) |
| $ | (7,263 | ) |
Recoveries for acquired |
| 7 |
|
|
| 8 |
|
|
| — |
|
|
| 81 |
|
|
| — |
|
|
| — |
|
|
| 96 |
|
Recoveries for acquired |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 201 |
|
|
| 201 |
|
Recoveries for originated |
| 499 |
|
|
| 6 |
|
|
| — |
|
|
| 493 |
|
|
| — |
|
|
| 532 |
|
|
| 1,530 |
|
Total recoveries | $ | 506 |
|
| $ | 14 |
|
| $ | — |
|
| $ | 574 |
|
| $ | — |
|
| $ | 733 |
|
| $ | 1,827 |
|
Less: Net charge-offs (recoveries) |
| 1,333 |
|
|
| 3 |
|
|
| — |
|
|
| 3,727 |
|
|
| 3 |
|
|
| 370 |
|
|
| 5,436 |
|
Balance at September30, 2022 | $ | 20,050 |
|
| $ | 2,681 |
|
| $ | 2,345 |
|
| $ | 35,752 |
|
| $ | 10 |
|
| $ | 3,817 |
|
| $ | 64,655 |
|
Acquired impaired loans |
| 1,325 |
|
|
| 850 |
|
|
| 98 |
|
|
| 79 |
|
|
| 2 |
|
|
| — |
|
|
| 2,354 |
|
Acquired non-impaired |
| 1,052 |
|
|
| 48 |
|
|
| — |
|
|
| 1,127 |
|
|
| 1 |
|
|
| 24 |
|
|
| 2,252 |
|
Originated loans and leases |
| 17,673 |
|
|
| 1,783 |
|
|
| 2,247 |
|
|
| 34,546 |
|
|
| 7 |
|
|
| 3,793 |
|
|
| 60,049 |
|
Balance at September 30, 2022 | $ | 20,050 |
|
| $ | 2,681 |
|
| $ | 2,345 |
|
| $ | 35,752 |
|
| $ | 10 |
|
| $ | 3,817 |
|
| $ | 64,655 |
|
Ending ALLL balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Acquired impaired loans | $ | 1,325 |
|
| $ | 850 |
|
| $ | 98 |
|
| $ | 79 |
|
| $ | 2 |
|
| $ | — |
|
| $ | 2,354 |
|
Acquired non-impaired loans |
| 6,094 |
|
|
| — |
|
|
| — |
|
|
| 12,584 |
|
|
| — |
|
|
| — |
|
|
| 18,678 |
|
Acquired non-impaired loans |
| 12,631 |
|
|
| 1,831 |
|
|
| 2,247 |
|
|
| 23,089 |
|
|
| 8 |
|
|
| 3,817 |
|
|
| 43,623 |
|
Balance at September 30, 2022 | $ | 20,050 |
|
| $ | 2,681 |
|
| $ | 2,345 |
|
| $ | 35,752 |
|
| $ | 10 |
|
| $ | 3,817 |
|
| $ | 64,655 |
|
Loans and leases ending balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Acquired impaired loans | $ | 56,974 |
|
| $ | 37,246 |
|
| $ | 1,144 |
|
| $ | 3,029 |
|
| $ | 153 |
|
| $ | — |
|
| $ | 98,546 |
|
Acquired non-impaired loans |
| 44,977 |
|
|
| 4,782 |
|
|
| 5,541 |
|
|
| 35,979 |
|
|
| — |
|
|
| — |
|
|
| 91,279 |
|
Acquired non-impaired loans |
| 1,767,043 |
|
|
| 439,816 |
|
|
| 450,922 |
|
|
| 1,930,822 |
|
|
| 1,215 |
|
|
| 495,828 |
|
|
| 5,085,646 |
|
Total loans and leases at | $ | 1,868,994 |
|
| $ | 481,844 |
|
| $ | 457,607 |
|
| $ | 1,969,830 |
|
| $ | 1,368 |
|
| $ | 495,828 |
|
| $ | 5,275,471 |
|
Ratio of net charge-offs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Acquired impaired loans |
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
Acquired non-impaired loans |
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
Originated loans and leases |
| 0.04 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.10 | % |
|
| 0.00 | % |
|
| 0.01 | % |
|
| 0.15 | % |
Loans and leases ending balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Acquired impaired loans |
| 1.08 | % |
|
| 0.71 | % |
|
| 0.02 | % |
|
| 0.06 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 1.87 | % |
Acquired non-impaired loans |
| 0.85 | % |
|
| 0.09 | % |
|
| 0.11 | % |
|
| 0.68 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 1.73 | % |
Acquired non-impaired loans |
| 33.50 | % |
|
| 8.33 | % |
|
| 8.55 | % |
|
| 36.60 | % |
|
| 0.02 | % |
|
| 9.40 | % |
|
| 96.40 | % |
72
| Commercial |
|
| Residential |
|
| Construction, |
|
| Commercial |
|
| Installment |
|
| Lease |
|
| Total |
| |||||||
Balance at December 31, 2022 | $ | 26,061 |
|
| $ | 3,140 |
|
| $ | 3,134 |
|
| $ | 41,889 |
|
| $ | 24 |
|
| $ | 7,676 |
|
| $ | 81,924 |
|
Provision/(recapture) for acquired |
| (560 | ) |
|
| (278 | ) |
|
| (3 | ) |
|
| (10 | ) |
|
| — |
|
|
| — |
|
|
| (851 | ) |
Provision/(recapture) for acquired |
| (865 | ) |
|
| (158 | ) |
|
| (1 | ) |
|
| (346 | ) |
|
| — |
|
|
| (10 | ) |
|
| (1,380 | ) |
Provision for originated loans |
| 306 |
|
|
| (17 | ) |
|
| 368 |
|
|
| 11,159 |
|
|
| (2 | ) |
|
| 129 |
|
|
| 11,943 |
|
Total provision | $ | (1,119 | ) |
| $ | (453 | ) |
| $ | 364 |
|
| $ | 10,803 |
|
| $ | (2 | ) |
| $ | 119 |
|
| $ | 9,712 |
|
Charge-offs for acquired |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Charge-offs for acquired |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Charge-offs for originated loans |
| (966 | ) |
|
| (9 | ) |
|
| — |
|
|
| (1,790 | ) |
|
| — |
|
|
| (304 | ) |
|
| (3,069 | ) |
Total charge-offs | $ | (966 | ) |
| $ | (9 | ) |
| $ | — |
|
| $ | (1,790 | ) |
| $ | — |
|
| $ | (304 | ) |
| $ | (3,069 | ) |
Recoveries for acquired |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Recoveries for acquired |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Recoveries for originated |
| 762 |
|
|
| 1 |
|
|
| — |
|
|
| 947 |
|
|
| 3 |
|
|
| 185 |
|
|
| 1,898 |
|
Total recoveries | $ | 762 |
|
| $ | 1 |
|
| $ | — |
|
| $ | 947 |
|
| $ | 3 |
|
| $ | 185 |
|
| $ | 1,898 |
|
Net (charge-offs) recoveries |
| (204 | ) |
|
| (8 | ) |
|
| — |
|
|
| (843 | ) |
|
| 3 |
|
|
| (119 | ) |
|
| (1,171 | ) |
Balance at March 31, 2023 | $ | 24,738 |
|
| $ | 2,679 |
|
| $ | 3,498 |
|
| $ | 51,849 |
|
| $ | 25 |
|
| $ | 7,676 |
|
| $ | 90,465 |
|
Ending ACL Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
PCD loans |
| 591 |
|
|
| 396 |
|
|
| 10 |
|
|
| 36 |
|
|
| 2 |
|
|
| — |
|
|
| 1,035 |
|
Acquired non-credit-deteriorated loans |
| 2,871 |
|
|
| 138 |
|
|
| — |
|
|
| 883 |
|
|
| 1 |
|
|
| 24 |
|
|
| 3,917 |
|
Originated loans |
| 21,276 |
|
|
| 2,145 |
|
|
| 3,488 |
|
|
| 50,930 |
|
|
| 22 |
|
|
| 7,652 |
|
|
| 85,513 |
|
Balance at March 31, 2023 | $ | 24,738 |
|
| $ | 2,679 |
|
| $ | 3,498 |
|
| $ | 51,849 |
|
| $ | 25 |
|
| $ | 7,676 |
|
| $ | 90,465 |
|
Loans individually | $ | 6,302 |
|
| $ | — |
|
| $ | 1,198 |
|
| $ | 14,518 |
|
| $ | — |
|
| $ | — |
|
| $ | 22,018 |
|
Loans collectively |
| 18,436 |
|
|
| 2,679 |
|
|
| 2,300 |
|
|
| 37,331 |
|
|
| 25 |
|
|
| 7,676 |
|
|
| 68,447 |
|
Balance at March 31, 2023 | $ | 24,738 |
|
| $ | 2,679 |
|
| $ | 3,498 |
|
| $ | 51,849 |
|
| $ | 25 |
|
| $ | 7,676 |
|
| $ | 90,465 |
|
Loans and leases ending balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Loans individually | $ | 31,622 |
|
| $ | — |
|
| $ | 5,541 |
|
| $ | 34,245 |
|
| $ | — |
|
| $ | — |
|
| $ | 71,408 |
|
Loans collectively |
| 1,897,762 |
|
|
| 499,336 |
|
|
| 441,567 |
|
|
| 2,049,560 |
|
|
| 1,822 |
|
|
| 553,877 |
|
|
| 5,443,924 |
|
Total loans and leases at | $ | 1,929,384 |
|
| $ | 499,336 |
|
| $ | 447,108 |
|
| $ | 2,083,805 |
|
| $ | 1,822 |
|
| $ | 553,877 |
|
| $ | 5,515,332 |
|
Ratio of net charge-offs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
PCD loans |
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
Acquired non-credit-deteriorated loans |
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
Originated loans |
| 0.02 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.06 | % |
|
| 0.00 | % |
|
| 0.01 | % |
|
| 0.09 | % |
Loans and leases ending balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Loans individually |
| 0.57 | % |
|
| 0.00 | % |
|
| 0.10 | % |
|
| 0.62 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 1.29 | % |
Loans collectively |
| 34.41 | % |
|
| 9.05 | % |
|
| 8.01 | % |
|
| 37.16 | % |
|
| 0.03 | % |
|
| 10.05 | % |
|
| 98.71 | % |
Total |
| 34.98 | % |
|
| 9.05 | % |
|
| 8.11 | % |
|
| 37.78 | % |
|
| 0.03 | % |
|
| 10.05 | % |
|
| 100.00 | % |
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 September 30, 2023March 31, 2024 and December 31, 20222023 totaled $53.7$68.7 million and $40.7$65.3 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 $3.6$7.1 million at September 30, 2023March 31, 2024 and $2.2$4.2 million at December 31, 2022.2023.
Total OREO decreased from $4.7$1.2 million at December 31, 20222023 to $1.7 million$785,000 at September 30, 2023.March 31, 2024. The $3.0 million$415,000 decrease in OREO resulted mostly from sales.
61
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):
|
| September 30, |
|
| December 31, |
|
| March 31, |
|
| December 31, |
| ||||
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||
Non-performing assets: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Non-accrual loans and leases(1)(2) |
| $ | 52,070 |
|
| $ | 36,027 |
|
| $ | 67,899 |
|
| $ | 64,107 |
|
Past due loans and leases 90 days or more and still accruing interest |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total non-performing loans and leases |
|
| 52,070 |
|
|
| 36,027 |
|
|
| 67,899 |
|
|
| 64,107 |
|
Other real estate owned |
|
| 1,671 |
|
|
| 4,717 |
|
|
| 785 |
|
|
| 1,200 |
|
Total non-performing assets |
| $ | 53,741 |
|
| $ | 40,744 |
|
| $ | 68,684 |
|
| $ | 65,307 |
|
Total non-performing loans and leases as a percentage of total |
|
| 0.79 | % |
|
| 0.66 | % |
|
| 1.00 | % |
|
| 0.96 | % |
Total non-accrual loans and leases as a percentage of total |
|
| 0.79 | % |
|
| 0.66 | % |
|
| 1.00 | % |
|
| 0.96 | % |
Total non-performing assets as a percentage of |
|
| 0.60 | % |
|
| 0.55 | % |
|
| 0.73 | % |
|
| 0.74 | % |
Allowance for credit losses - loans and leases, as a percentage of |
|
| 202.99 | % |
|
| 227.40 | % |
|
| 150.76 | % |
|
| 158.62 | % |
Allowance for credit losses - loans and leases, as a percentage of |
|
| 202.99 | % |
|
| 227.40 | % |
|
| 150.76 | % |
|
| 158.62 | % |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Non-performing assets guaranteed by U.S. government: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Non-accrual loans guaranteed |
| $ | 3,588 |
|
| $ | 2,225 |
|
| $ | 7,138 |
|
| $ | 4,154 |
|
Past due loans 90 days or more and still accruing interest guaranteed |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total non-performing loans guaranteed |
| $ | 3,588 |
|
| $ | 2,225 |
|
| $ | 7,138 |
|
| $ | 4,154 |
|
Total non-performing loans and leases not guaranteed as a percentage of |
|
| 0.73 | % |
|
| 0.62 | % |
|
| 0.90 | % |
|
| 0.90 | % |
Total non-accrual loans and leases not guaranteed as a percentage of |
|
| 0.73 | % |
|
| 0.62 | % |
|
| 0.90 | % |
|
| 0.62 | % |
Total non-performing assets not guaranteed as a percentage of total assets |
|
| 0.56 | % |
|
| 0.52 | % |
|
| 0.65 | % |
|
| 0.69 | % |
Deposits
Our loan and lease growth is funded primarily through core deposits. We gather deposits primarily through each of our 47 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.
73
Total deposits at September 30, 2023March 31, 2024 were $7.0$7.4 billion, representing an increase of $1.3$173.2 million, or 22.1%2.4%, compared to $5.7$7.2 billion at December 31, 2022,2023, driven by an increase in time deposits and money market demand accounts. Non-interest-bearing deposits were $2.0$1.9 billion, or 28.2%25.2% of total deposits, at September 30, 2023,March 31, 2024, a decrease of $178.8$54.1 million, or 8.4%2.8%, compared to $2.1$1.9 billion at December 31, 2022,2023, or 37.6%26.6% of total deposits. Core deposits were 88.6%85.7% and 92.7%87.0% of total deposits at September 30, 2023March 31, 2024 and December 31, 2022,2023, 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 |
|
| For Three Months Ended |
|
| For Three Months Ended |
| ||||||||||||||||||||
|
| September 30, 2023 |
|
| September 30, 2022 |
|
| March 31, 2024 |
|
| March 31, 2023 |
| ||||||||||||||||||||
|
| Average |
|
| Average |
|
| Average |
|
| Average |
|
| Average |
|
| Average |
|
| Average |
|
| Average |
| ||||||||
Non-interest-bearing demand deposits |
| $ | 1,987,996 |
|
|
| 0.00 | % |
| $ | 2,198,095 |
|
|
| 0.00 | % |
| $ | 1,874,322 |
|
|
| 0.00 | % |
| $ | 2,076,613 |
|
|
| 0.00 | % |
Interest checking |
|
| 579,917 |
|
|
| 1.51 | % |
|
| 583,777 |
|
|
| 0.73 | % |
|
| 590,406 |
|
|
| 1.65 | % |
|
| 606,008 |
|
|
| 1.67 | % |
Money market accounts |
|
| 2,040,476 |
|
|
| 3.24 | % |
|
| 1,391,923 |
|
|
| 0.96 | % |
|
| 2,237,324 |
|
|
| 3.53 | % |
|
| 1,465,677 |
|
|
| 2.14 | % |
Savings |
|
| 594,555 |
|
|
| 0.15 | % |
|
| 673,966 |
|
|
| 0.15 | % |
|
| 531,912 |
|
|
| 0.15 | % |
|
| 613,590 |
|
|
| 0.15 | % |
Time deposits (below $100,000) |
|
| 923,074 |
|
|
| 4.37 | % |
|
| 338,510 |
|
|
| 0.85 | % |
|
| 982,090 |
|
|
| 4.84 | % |
|
| 529,078 |
|
|
| 2.64 | % |
Time deposits ($100,000 and above) |
|
| 783,457 |
|
|
| 4.00 | % |
|
| 348,614 |
|
|
| 0.64 | % |
|
| 1,010,267 |
|
|
| 4.72 | % |
|
| 437,331 |
|
|
| 2.24 | % |
Total |
| $ | 6,909,475 |
|
|
| 2.13 | % |
| $ | 5,534,885 |
|
|
| 0.43 | % |
| $ | 7,226,321 |
|
|
| 2.56 | % |
| $ | 5,728,297 |
|
|
| 1.15 | % |
|
| For the Nine Months Ended |
|
| For the Nine Months Ended |
| ||||||||||
|
| September 30, 2023 |
|
| September 30, 2022 |
| ||||||||||
|
| Average |
|
| Average |
|
| Average |
|
| Average |
| ||||
Non-interest-bearing demand deposits |
| $ | 1,970,724 |
|
|
| 0.00 | % |
| $ | 2,237,002 |
|
|
| 0.00 | % |
Interest checking |
|
| 575,558 |
|
|
| 1.60 | % |
|
| 592,985 |
|
|
| 0.38 | % |
Money market accounts |
|
| 1,682,311 |
|
|
| 2.80 | % |
|
| 1,318,725 |
|
|
| 0.51 | % |
Savings |
|
| 594,396 |
|
|
| 0.15 | % |
|
| 662,820 |
|
|
| 0.08 | % |
Time deposits (below $100,000) |
|
| 751,241 |
|
|
| 3.77 | % |
|
| 286,879 |
|
|
| 0.45 | % |
Time deposits ($100,000 and above) |
|
| 585,343 |
|
|
| 3.25 | % |
|
| 372,014 |
|
|
| 0.40 | % |
Total |
| $ | 6,159,573 |
|
|
| 1.70 | % |
| $ | 5,470,425 |
|
|
| 0.22 | % |
62
Our average cost of deposits was 2.13%2.56% during the three months ended September 30, 2023,March 31, 2024, compared to 0.43%1.15% for the three months ended September 30, 2022. Our average cost of deposits was 1.70% during the nine months ended September 30, 2023 compared to 0.22% during the nine months ended September 30, 2022.March 31, 2023. This increase was principally attributed to higher rates on interest-bearing deposits as a result of the rising interest rate environment, an increase in interest bearing deposits and corresponding decrease in non-interest bearing deposits both related to deposit flows and the impact of the Inland acquisition. The ratio of our average non-interest bearing deposits to total average deposits was 28.8%25.9% during the three months ended September 30, 2023,March 31, 2024, compared to 39.7%36.3% during the three months ended September 30, 2022. The ratio of our average non-interest bearing deposits to total average deposits was 32.0% during the nine months ended September 30, 2023 compared to 40.9% during the nine months ended September 30, 2022.March 31, 2023. We had $549.1$436.3 million in brokered time deposits at September 30, 2023March 31, 2024 and $251.5$480.0 million at December 31, 2022,2023, which represented 7.9%5.9% and 4.4%6.7% of total deposits, respectively. The increasedecrease in brokered deposits was due to increases in funding requirements.other sources of funding. Our loan and lease to deposit ratio was 95.2%92.54% at September 30, 2023March 31, 2024 compared to 96.0%93.39% at December 31, 2022.2023.
The following table shows time deposits and other time deposits of $250,000 or more by time remaining until maturity as of September 30, 2023March 31, 2024 (dollars in thousands):
|
| Less than $250,000 |
|
| $250,000 or Greater |
|
| Total |
|
| Uninsured Portion |
| ||||
Three months or less |
| $ | 482,053 |
|
| $ | 102,859 |
|
| $ | 584,912 |
|
| $ | 39,859 |
|
Over three months through six months |
|
| 530,265 |
|
|
| 77,399 |
|
|
| 607,664 |
|
|
| 20,149 |
|
Over six months through 12 months |
|
| 381,935 |
|
|
| 111,006 |
|
|
| 492,941 |
|
|
| 36,256 |
|
Over 12 months |
|
| 52,800 |
|
|
| 19,422 |
|
|
| 72,222 |
|
|
| 9,171 |
|
Total |
| $ | 1,447,053 |
|
| $ | 310,686 |
|
| $ | 1,757,739 |
|
| $ | 105,435 |
|
74
|
| Less than $250,000 |
|
| $250,000 or Greater |
|
| Total |
|
| Uninsured Portion |
| ||||
Three months or less |
| $ | 396,340 |
|
| $ | 103,894 |
|
| $ | 500,234 |
|
| $ | 36,144 |
|
Over three months through six months |
|
| 574,975 |
|
|
| 164,784 |
|
|
| 739,759 |
|
|
| 53,284 |
|
Over six months through 12 months |
|
| 518,783 |
|
|
| 135,457 |
|
|
| 654,240 |
|
|
| 50,957 |
|
Over 12 months |
|
| 104,192 |
|
|
| 24,199 |
|
|
| 128,391 |
|
|
| 8,949 |
|
Total |
| $ | 1,594,290 |
|
| $ | 428,334 |
|
| $ | 2,022,624 |
|
| $ | 149,334 |
|
Total estimated uninsured deposits, were $1.8$2.1 billion and $1.6$1.9 billion as of September 30, 2023March 31, 2024 and December 31, 2022, and represented 26.1% and 28.2% of total deposits, respectively.2023.
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 September 30, 2023March 31, 2024 and December 31, 2022,2023, we had an available borrowing capacity from the FHLB of $2.0$2.6 billion and $2.8 billion, respectively, subject to the availability of collateral.
At September 30, 2023,March 31, 2024, the Company had $640.0$470.0 million of FHLB advances outstanding with a maturities ranging from November 2023April 2024 to December 2023.June 2024. The company also had $20.0a $200.0 million advance taken as part of the Bank Term Funding Program ("BTFP") and a $16.7 million term loan outstanding maturing in May 2026,2026.
On January 17, 2024, the Company entered into a Letter Agreement with the Federal Reserve Bank ("FRB") of Chicago that allows the Bank to access the 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 pledges securities to FBR Chicago as collateral for available advances. The advance carries a fixed interest rate of 4.91%, and matures on January 22, 2025. Advances under the BTFP are prepayable at any time without a $15.0 million revolving line of credit drawn, maturing in May 2024.prepayment penalty.
The Company has the capacity to borrow funds from the discount window of the Federal Reserve System. There were no borrowings outstanding under the Federal Reserve Bank discount window line as of September 30, 2023March 31, 2024 and December 31, 2022.2023. The Company pledges loans as collateral for any borrowings under the Federal Reserve Bank discount window.
63
The following table sets forth certain information regarding our short-term borrowings at the dates and for the periods indicated (dollars in thousands):
|
| Nine Months Ended September 30, |
|
| Three Months Ended March 31, |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||
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 |
|
| N/A |
|
| N/A |
| ||||
Weighted average interest rate at end of period |
| N/A |
|
| N/A |
|
| N/A |
|
| N/A |
| ||||
Federal Home Loan Bank advances: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Average balance outstanding |
| $ | 471,811 |
|
| $ | 424,324 |
|
| $ | 259,176 |
|
| $ | 551,501 |
|
Maximum outstanding at any month-end period during the year |
|
| 675,000 |
|
|
| 735,000 |
|
|
| 470,000 |
|
|
| 625,000 |
|
Balance outstanding at end of period |
|
| 640,000 |
|
|
| 600,000 |
|
|
| 470,000 |
|
|
| 625,000 |
|
Weighted average interest rate during period |
|
| 3.67 | % |
|
| 1.43 | % |
|
| 1.92 | % |
|
| 4.25 | % |
Weighted average interest rate at end of period |
|
| 5.51 | % |
|
| 3.07 | % |
|
| 5.47 | % |
|
| 4.91 | % |
Federal funds purchased: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Average balance outstanding |
| $ | 916 |
|
| $ | 842 |
|
| $ | — |
|
| $ | 2,778 |
|
Maximum outstanding at any month-end period during the year |
|
| — |
|
|
| 45,000 |
|
|
| — |
|
|
| — |
|
Balance outstanding at end of period |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Weighted average interest rate during period |
|
| 5.30 | % |
|
| 2.32 | % |
| N/A |
|
|
| 5.30 | % | |
Weighted average interest rate at end of period |
|
| 0.00 | % |
|
| 0.00 | % |
| N/A |
|
| N/A |
| ||
Term Loan |
|
|
|
|
|
| ||||||||||
Bank Term Funding Program: |
|
|
|
|
|
| ||||||||||
Average balance outstanding |
| $ | 153,846 |
|
| $ | — |
| ||||||||
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 |
|
| 4.92 | % |
| N/A |
| |||||||||
Weighted average interest rate at end of period |
|
| 4.91 | % |
| N/A |
| |||||||||
Term Loan: |
|
|
|
|
|
| ||||||||||
Average balance outstanding |
| $ | 6,593 |
|
| $ | — |
|
| $ | 16,685 |
|
| $ | — |
|
Maximum outstanding at any month-end period during the year |
|
| 20,000 |
|
|
| — |
|
|
| 16,667 |
|
|
| — |
|
Balance outstanding at end of period |
|
| 20,000 |
|
|
| — |
|
|
| 16,667 |
|
|
| — |
|
Weighted average interest rate during period |
|
| 7.53 | % |
| N/A |
|
|
| 7.77 | % |
| N/A |
| ||
Weighted average interest rate at end of period |
|
| 7.62 | % |
| N/A |
|
|
| 7.62 | % |
| N/A |
| ||
Revolving Line of Credit: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Average balance outstanding |
| $ | 4,945 |
|
| $ | — |
|
| $ | 5,316 |
|
| $ | — |
|
Maximum outstanding at any month-end period during the year |
|
| 15,000 |
|
|
| — |
|
|
| 7,500 |
|
|
| — |
|
Balance outstanding at end of period |
|
| 15,000 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Weighted average interest rate during period |
|
| 7.88 | % |
| N/A |
|
|
| 8.33 | % |
| N/A |
| ||
Weighted average interest rate at end of period |
|
| 7.38 | % |
| N/A |
|
| N/A |
|
| N/A |
| |||
7564
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 FDIC insurance limit into overnight repurchase agreements. We pledge securities as collateral for the repurchase agreements. Securities sold under agreements to repurchase increaseddecreased by $22.8$6.1 million, from $15.4$40.6 million at December 31, 20222023 to $38.2$34.5 million at September 30, 2023.March 31, 2024.
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 September 30, 2023,March 31, 2024, Byline Bank had maximum borrowing capacityadvance potential from the FHLB of $2.6$3.1 billion and $734.8$868.8 million from the Federal Reserve Bank (“FRB”).FRB. As of September 30, 2023,March 31, 2024, Byline Bank had open FHLB advances of $640.0$470.0 million and open letters of credit of $19.7 million, leaving us with$13.5 million. Based on collateral and securities pledged, our available aggregate borrowing capacity of $1.0 billion based on collateral pledged.at March 31, 2024 was $1.4 billion. In addition, Byline Bank had uncommitted federal funds lines available of $135.0 million and $734.8 million available under the FRB discount window line at September 30, 2023.March 31, 2024.
As of December 31, 2022,2023, Byline Bank had maximum borrowing capacity from the FHLB of $2.5$3.1 billion and $804.6$866.5 million from the FRB. As of December 31, 2022,2023, Byline Bank had open advances of $625.0$325.0 million and open letters of credit of $13.5 million, leaving us with$19.7 million. Based on collateral and securities pledged, our available aggregate borrowing capacity of $1.0 billion based on collateral pledged.at December 31, 2023 was $1.6 billion. In addition, Byline Bank had an uncommitted federal funds line available of $135.0 million and $804.6 million available under the FRB discount window line at December 31, 2022.2023.
On October 13, 2016, the Company entered into a $30.0 million revolving credit agreement with a correspondent bank. Through subsequent amendments, the revolving credit agreement was reduced to $15.0 million. The amended revolving line of credit bears interest at either SOFR plus 195205 basis points or 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. On May 26, 2023, the Company amended the agreement with the lender, which provides for: i) the renewal of the revolving line-of-credit facility of up to $15.0 million, extending its maturity date to May 26, 2024; and ii) a new term loan facility in the principal amount of up to $20.0 million with a maturity date of May 26, 2026, each subject to the existing Negative Pledge Agreement dated October 11, 2018, as amended.
At September 30, 2023,March 31, 2024, the variable term loan had an interest rate of 7.62%. and an outstanding balance of $16.7 million. At September 30,December 31, 2023, the variable term loan had an interest rate of 7.64% and an outstanding balance of $18.3 million. At March 31, 2024, the line of credit had a no outstanding balance. At December 31, 2023, the line of credit had a $15.0$11.3 million outstanding balance and an interest rate of 7.38%. At December 31, 2022, the line of credit had no outstanding balance.7.39%
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, 20222023 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.
During October 2023, Byline Bank pledged additional loan collateral from the merger of Inland Bank. Collateral was added to both the Federal Reserve Bank discount window and Federal Home Loan Bank of Chicago with borrowing capacity increasing by $146.8 million and $131.5 million, respectively. At November 1, 2023, our total borrowing capacity was $2.0 billion.
Capital Resources
Stockholders’ equity at September 30, 2023March 31, 2024 was $919.9 million$1.0 billion compared to $765.8$990.2 million at December 31, 2022,2023, an increase of $154.1$18.9 million, or 20.1%1.9%. The increase was primarily driven by an increase in retained earnings, and Inland acquisition, offset by a decreasean increase in accumulated other comprehensive loss during the ninethree months ended September 30, 2023,March 31, 2024, reflecting the unrealized losses in our available-for-sale securities portfolio of $178.8$136.8 million compared to $151.9$130.2 million as of December 31, 2023.
76
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
65
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 September 30, 2023,March 31, 2024, Byline Bank exceeded all applicable regulatory capital requirements and was considered “well-capitalized.” There have been no conditions or events since September 30, 2023March 31, 2024 that management believes have changed Byline Bank’s classifications.
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 |
|
| Actual |
|
| Minimum Capital |
|
| Required to be |
| ||||||||||||||||||||||||||||||
September 30, 2023 |
| Amount |
|
| Ratio |
|
| Amount |
|
| Ratio |
|
| Amount |
|
| Ratio |
| ||||||||||||||||||||||||||||||
March 31, 2024 |
| Amount |
|
| Ratio |
|
| Amount |
|
| Ratio |
|
| Amount |
|
| Ratio |
| ||||||||||||||||||||||||||||||
Total capital to risk weighted assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Company |
| $ | 1,096,646 |
|
|
| 13.17 | % |
| $ | 666,327 |
|
|
| 8.00 | % |
| N/A |
|
| N/A |
|
| $ | 1,153,483 |
|
|
| 13.66 | % |
| $ | 675,398 |
|
|
| 8.00 | % |
| N/A |
|
| N/A |
| ||||
Bank |
|
| 1,063,902 |
|
|
| 12.81 | % |
|
| 664,655 |
|
|
| 8.00 | % |
| $ | 830,819 |
|
|
| 10.00 | % |
|
| 1,113,131 |
|
|
| 13.22 | % |
|
| 673,490 |
|
|
| 8.00 | % |
| $ | 841,862 |
|
|
| 10.00 | % |
Tier 1 capital to risk weighted assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Company |
| $ | 926,577 |
|
|
| 11.12 | % |
| $ | 499,745 |
|
|
| 6.00 | % |
| N/A |
|
| N/A |
|
| $ | 981,085 |
|
|
| 11.62 | % |
| $ | 506,548 |
|
|
| 6.00 | % |
| N/A |
|
| N/A |
| ||||
Bank |
|
| 968,833 |
|
|
| 11.66 | % |
|
| 498,491 |
|
|
| 6.00 | % |
| $ | 664,655 |
|
|
| 8.00 | % |
|
| 1,015,732 |
|
|
| 12.07 | % |
|
| 505,117 |
|
|
| 6.00 | % |
| $ | 673,490 |
|
|
| 8.00 | % |
Common Equity Tier 1 (CET1) to risk weighted assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Company |
| $ | 839,577 |
|
|
| 10.08 | % |
| $ | 374,809 |
|
|
| 4.50 | % |
| N/A |
|
| N/A |
|
| $ | 894,085 |
|
|
| 10.59 | % |
| $ | 379,911 |
|
|
| 4.50 | % |
| N/A |
|
| N/A |
| ||||
Bank |
|
| 968,833 |
|
|
| 11.66 | % |
|
| 373,868 |
|
|
| 4.50 | % |
| $ | 540,032 |
|
|
| 6.50 | % |
|
| 1,015,732 |
|
|
| 12.07 | % |
|
| 378,838 |
|
|
| 4.50 | % |
| $ | 547,210 |
|
|
| 6.50 | % |
Tier 1 capital to average assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Company |
| $ | 926,577 |
|
|
| 10.75 | % |
| $ | 344,746 |
|
|
| 4.00 | % |
| N/A |
|
| N/A |
|
| $ | 981,085 |
|
|
| 10.91 | % |
| $ | 359,579 |
|
|
| 4.00 | % |
| N/A |
|
| N/A |
| ||||
Bank |
|
| 968,833 |
|
|
| 11.25 | % |
|
| 344,526 |
|
|
| 4.00 | % |
| $ | 430,657 |
|
|
| 5.00 | % |
|
| 1,015,732 |
|
|
| 11.31 | % |
|
| 359,280 |
|
|
| 4.00 | % |
| $ | 449,100 |
|
|
| 5.00 | % |
|
| Actual |
|
| Minimum Capital |
|
| Required to be |
|
| Actual |
|
| Minimum Capital |
|
| Required to be |
| ||||||||||||||||||||||||||||||
December 31, 2022 |
| Amount |
|
| Ratio |
|
| Amount |
|
| Ratio |
|
| Amount |
|
| Ratio |
| ||||||||||||||||||||||||||||||
December 31, 2023 |
| Amount |
|
| Ratio |
|
| Amount |
|
| Ratio |
|
| Amount |
|
| Ratio |
| ||||||||||||||||||||||||||||||
Total capital to risk weighted assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Company |
| $ | 900,806 |
|
|
| 13.00 | % |
| $ | 554,436 |
|
|
| 8.00 | % |
| N/A |
|
| N/A |
|
| $ | 1,123,568 |
|
|
| 13.38 | % |
| $ | 671,576 |
|
|
| 8.00 | % |
| N/A |
|
| N/A |
| ||||
Bank |
|
| 852,047 |
|
|
| 12.34 | % |
|
| 552,507 |
|
|
| 8.00 | % |
| $ | 690,633 |
|
|
| 10.00 | % |
|
| 1,085,915 |
|
|
| 12.97 | % |
|
| 669,904 |
|
|
| 8.00 | % |
| $ | 837,380 |
|
|
| 10.00 | % |
Tier 1 capital to risk weighted assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Company |
| $ | 751,887 |
|
|
| 10.85 | % |
| $ | 415,827 |
|
|
| 6.00 | % |
| N/A |
|
| N/A |
|
| $ | 956,027 |
|
|
| 11.39 | % |
| $ | 503,682 |
|
|
| 6.00 | % |
| N/A |
|
| N/A |
| ||||
Bank |
|
| 778,128 |
|
|
| 11.27 | % |
|
| 414,380 |
|
|
| 6.00 | % |
| $ | 552,507 |
|
|
| 8.00 | % |
|
| 993,375 |
|
|
| 11.86 | % |
|
| 502,428 |
|
|
| 6.00 | % |
| $ | 669,904 |
|
|
| 8.00 | % |
Common Equity Tier 1 (CET1) to risk weighted assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Company |
| $ | 706,887 |
|
|
| 10.20 | % |
| $ | 311,870 |
|
|
| 4.50 | % |
| N/A |
|
| N/A |
|
| $ | 869,027 |
|
|
| 10.35 | % |
| $ | 377,762 |
|
|
| 4.50 | % |
| N/A |
|
| N/A |
| ||||
Bank |
|
| 778,128 |
|
|
| 11.27 | % |
|
| 310,785 |
|
|
| 4.50 | % |
| $ | 448,912 |
|
|
| 6.50 | % |
|
| 993,375 |
|
|
| 11.86 | % |
|
| 376,821 |
|
|
| 4.50 | % |
| $ | 544,297 |
|
|
| 6.50 | % |
Tier 1 capital to average assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Company |
| $ | 751,887 |
|
|
| 10.29 | % |
| $ | 292,258 |
|
|
| 4.00 | % |
| N/A |
|
| N/A |
|
| $ | 956,027 |
|
|
| 10.86 | % |
| $ | 352,089 |
|
|
| 4.00 | % |
| N/A |
|
| N/A |
| ||||
Bank |
|
| 778,128 |
|
|
| 10.67 | % |
|
| 291,741 |
|
|
| 4.00 | % |
| $ | 364,676 |
|
|
| 5.00 | % |
|
| 993,375 |
|
|
| 11.30 | % |
|
| 351,735 |
|
|
| 4.00 | % |
| $ | 439,669 |
|
|
| 5.00 | % |
The ratios above reflect the Company’s election to opt into the regulators’ joint CECL transition provision, which allows the Company to phase in the capital impact of the adoption of CECL over the next three years beginning January 1, 2022. Accordingly, capital ratios as of September 30, 2023March 31, 2024 reflect 50%75% of the CECL impact and December 31, 20222023 reflect 25%50% of the CECL impact.
77
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 September 30, 2023.March 31, 2024.
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 ninethree months ended September 30, 2023March 31, 2024 the Company received $23.5$11.5 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, 2022,2023, the Company received $24.0$35.0 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, redemptionprincipal and interest on its term loan and revolving line of the Series B preferred stock outstanding,credit, and to fund other Company-related activities.
On March 31, 2022, the Company redeemed all 10,438 outstanding shares of its 7.5% fixed-to-floating noncumulative perpetual preferred stock, Series B. The redemption totaled $10.6 million, including the quarterly dividend payment.
66
On December 12, 2022, we announced that our Board of Directors approved a 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, 2023 until December 31, 2023. No shares were repurchased under this program.
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 ourthe Company’s outstanding common stock. The program is inwill be effect from January 1, 20232024 until December 31, 2023,2024, unless terminated earlier. We didThe 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. The Company is not obligated to purchase any shares under the stockprogram, and the program may be discontinued at any time. The actual timing, number and share price of shares purchased under the repurchase program duringwill be determined by the threeCompany at its discretion and nine months ended September 30,will depend on a number of factors, including the market price of the Company’s stock, general market and economic conditions and applicable legal requirements. The shares authorized to be repurchased represented approximately 2.9% of the Company’s outstanding common stock at December 31, 2023. We purchased 174,249No shares at a cost of $4.2 millionwere repurchased under our previously authorized stock repurchasethis program during the three months ended September 30, 2022, and repurchased 689,068 shares at a cost of $17.3 million during the nine months ended September 30, 2022.March 31, 2024.
On October 24, 2023, the Company'sApril 23, 2024, our Board of Directors declared a cash dividend of $0.09 per share payable on NovemberMay 21, 2023,2024 to stockholders of record of the Company'sour common stock as of NovemberMay 7, 2023.2024.
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 1.00% to 18.00%15.00% and maturities up to 2053.2052. Variable rate loan commitments have interest rates ranging from 3.00%4.00% to 18.00% and maturities up to 2049.2053.
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.
78
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 September 30, 2023March 31, 2024 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):
|
| September 30, 2023 |
|
| March 31, 2024 |
| ||||||||||||||||||
|
|
|
| Fair Value |
|
|
|
| Fair Value |
| ||||||||||||||
|
| Notional |
|
| Asset |
|
| Liability |
|
| Notional |
|
| Asset |
|
| Liability |
| ||||||
Interest rate swaps designated as cash flow hedges |
| $ | 650,000 |
|
| $ | 47,488 |
|
| $ | (1,633 | ) |
| $ | 650,000 |
|
| $ | 37,976 |
|
| $ | (582 | ) |
Other interest rate derivatives |
|
| 703,876 |
|
|
| 29,514 |
|
|
| (29,008 | ) |
|
| 691,612 |
|
|
| 22,124 |
|
|
| (21,949 | ) |
Other credit derivatives |
|
| 1,198 |
|
|
| — |
|
|
| — |
|
|
| 3,545 |
|
|
| 3 |
|
|
| — |
|
See Note 16 of our Unaudited Interim Condensed Consolidated Financial Statements as of September 30, 2023,March 31, 2024, included in this report, and Note 21 of our Consolidated Financial Statements, included in our Annual Report on Form 10-K for the year ended December 31, 20222023 for additional information on derivatives.
67
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:
7968
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 September 30, |
|
| As of or For the Nine Months Ended |
|
| As of or For the Three Months Ended March 31, |
| |||||||||||||||
(dollars in thousands, except per share data) |
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||||
Net income and earnings per share excluding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Reported Net Income |
| $ | 28,222 |
|
| $ | 22,656 |
|
| $ | 78,274 |
|
| $ | 65,250 |
|
| $ | 30,440 |
|
| $ | 23,945 |
|
Significant items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Impairment charges on assets held for sale and ROU asset |
|
| 394 |
|
|
| — |
|
|
| 414 |
|
|
| — |
|
|
| 194 |
|
|
| 20 |
|
Merger-related expense |
|
| 6,307 |
|
|
| — |
|
|
| 8,187 |
|
|
| — |
|
|
| — |
|
|
| 489 |
|
Tax benefit |
|
| (1,617 | ) |
|
| — |
|
|
| (1,903 | ) |
|
| — |
|
|
| (52 | ) |
|
| (56 | ) |
Adjusted Net Income |
| $ | 33,306 |
|
| $ | 22,656 |
|
| $ | 84,972 |
|
| $ | 65,250 |
|
| $ | 30,582 |
|
| $ | 24,398 |
|
Reported Diluted Earnings per Share |
| $ | 0.65 |
|
| $ | 0.61 |
|
| $ | 1.98 |
|
| $ | 1.73 |
|
| $ | 0.70 |
|
| $ | 0.64 |
|
Significant items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Impairment charges on assets held for sale and ROU asset |
|
| 0.01 |
|
|
| — |
|
|
| 0.01 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Merger-related expense |
|
| 0.15 |
|
|
| — |
|
|
| 0.21 |
|
|
| — |
|
|
| — |
|
|
| 0.01 |
|
Tax benefit |
|
| (0.04 | ) |
|
| — |
|
|
| (0.05 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
Adjusted Diluted Earnings per Share |
| $ | 0.77 |
|
| $ | 0.61 |
|
| $ | 2.15 |
|
| $ | 1.73 |
|
| $ | 0.70 |
|
| $ | 0.65 |
|
8069
| As of or For the Three Months Ended September 30, |
|
| As of or For the Nine Months Ended September 30, |
| ||||||||||
(dollars in thousands, except per share data) | 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Adjusted non-interest expense: |
|
|
|
|
|
|
|
|
|
|
| ||||
Non-interest expense | $ | 57,891 |
|
| $ | 46,178 |
|
| $ | 156,019 |
|
| $ | 134,506 |
|
Less: Impairment charges on assets held for sale and ROU asset |
| 394 |
|
|
| — |
|
|
| 414 |
|
|
| — |
|
Less: Merger-related expenses |
| 6,307 |
|
|
| — |
|
|
| 8,187 |
|
|
| — |
|
Adjusted non-interest expense | $ | 51,190 |
|
| $ | 46,178 |
|
| $ | 147,418 |
|
| $ | 134,506 |
|
Adjusted non-interest expense excluding amortization of intangible assets: |
|
|
|
|
|
|
|
|
|
|
| ||||
Adjusted non-interest expense | $ | 51,190 |
|
| $ | 46,178 |
|
| $ | 147,418 |
|
| $ | 134,506 |
|
Less: Amortization of intangible assets |
| 1,551 |
|
|
| 1,611 |
|
|
| 4,461 |
|
|
| 5,075 |
|
Adjusted non-interest expense excluding amortization of intangible assets | $ | 49,639 |
|
| $ | 44,567 |
|
| $ | 142,957 |
|
| $ | 129,431 |
|
Pre-tax pre-provision net income: |
|
|
|
|
|
|
|
|
|
|
| ||||
Pre-tax income | $ | 38,134 |
|
| $ | 30,513 |
|
| $ | 105,711 |
|
| $ | 85,232 |
|
Add: Provision for credit losses |
| 8,803 |
|
|
| 4,176 |
|
|
| 24,418 |
|
|
| 15,079 |
|
Pre-tax pre-provision net income | $ | 46,937 |
|
| $ | 34,689 |
|
| $ | 130,129 |
|
| $ | 100,311 |
|
Adjusted pre-tax pre-provision net income: |
|
|
|
|
|
|
|
|
|
|
| ||||
Pre-tax pre-provision net income | $ | 46,937 |
|
| $ | 34,689 |
|
| $ | 130,129 |
|
| $ | 100,311 |
|
Impairment charges on assets held for sale and ROU asset |
| 394 |
|
|
| — |
|
|
| 414 |
|
|
| — |
|
Merger-related expenses |
| 6,307 |
|
|
| — |
|
|
| 8,187 |
|
|
| — |
|
Adjusted pre-tax pre-provision net income | $ | 53,638 |
|
| $ | 34,689 |
|
| $ | 138,730 |
|
| $ | 100,311 |
|
Taxable equivalent net interest income: |
|
|
|
|
|
|
|
|
|
|
| ||||
Net interest income | $ | 92,452 |
|
| $ | 68,875 |
|
| $ | 244,336 |
|
| $ | 189,238 |
|
Add: Tax-equivalent adjustment |
| 248 |
|
|
| 228 |
|
|
| 663 |
|
|
| 701 |
|
Net interest income, fully taxable equivalent | $ | 92,700 |
|
| $ | 69,103 |
|
| $ | 244,999 |
|
| $ | 189,939 |
|
Total revenues: |
|
|
|
|
|
|
|
|
|
|
| ||||
Net interest income | $ | 92,452 |
|
| $ | 68,875 |
|
| $ | 244,336 |
|
| $ | 189,238 |
|
Add: non-interest income |
| 12,376 |
|
|
| 11,992 |
|
|
| 41,812 |
|
|
| 45,579 |
|
Total revenues | $ | 104,828 |
|
| $ | 80,867 |
|
| $ | 286,148 |
|
| $ | 234,817 |
|
Tangible common stockholders' equity: |
|
|
|
|
|
|
|
|
|
|
| ||||
Total stockholders' equity | $ | 919,945 |
|
| $ | 747,565 |
|
| $ | 919,945 |
|
| $ | 747,565 |
|
Less: Preferred stock |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Less: Goodwill and other intangibles |
| 205,028 |
|
|
| 160,484 |
|
|
| 205,028 |
|
|
| 160,484 |
|
Tangible common stockholders' equity | $ | 714,917 |
|
| $ | 587,081 |
|
| $ | 714,917 |
|
| $ | 587,081 |
|
Tangible assets: |
|
|
|
|
|
|
|
|
|
|
| ||||
Total assets | $ | 8,943,368 |
|
| $ | 7,277,587 |
|
| $ | 8,943,368 |
|
| $ | 7,277,587 |
|
Less: Goodwill and other intangibles |
| 205,028 |
|
|
| 160,484 |
|
|
| 205,028 |
|
|
| 160,484 |
|
Tangible assets | $ | 8,738,340 |
|
| $ | 7,117,103 |
|
| $ | 8,738,340 |
|
| $ | 7,117,103 |
|
Average tangible common stockholders' equity: |
|
|
|
|
|
|
|
|
|
|
| ||||
Average total stockholders' equity | $ | 924,278 |
|
| $ | 775,358 |
|
| $ | 838,792 |
|
| $ | 795,849 |
|
Less: Average preferred stock |
| — |
|
|
| — |
|
|
| — |
|
|
| 3,288 |
|
Less: Average goodwill and other intangibles |
| 202,978 |
|
|
| 161,292 |
|
|
| 172,806 |
|
|
| 163,053 |
|
Average tangible common stockholders' equity | $ | 721,300 |
|
| $ | 614,066 |
|
| $ | 665,986 |
|
| $ | 629,508 |
|
Average tangible assets: |
|
|
|
|
|
|
|
|
|
|
| ||||
Average total assets | $ | 8,634,345 |
|
| $ | 7,145,189 |
|
| $ | 7,799,187 |
|
| $ | 6,943,909 |
|
Less: Average goodwill and other intangibles |
| 202,978 |
|
|
| 161,292 |
|
|
| 172,806 |
|
|
| 163,053 |
|
Average tangible assets | $ | 8,431,367 |
|
| $ | 6,983,897 |
|
| $ | 7,626,381 |
|
| $ | 6,780,856 |
|
Tangible net income available to common stockholders: |
|
|
|
|
|
|
|
|
|
|
| ||||
Net income available to common stockholders | $ | 28,222 |
|
| $ | 22,656 |
|
| $ | 78,274 |
|
| $ | 65,054 |
|
Add: After-tax intangible asset amortization |
| 1,137 |
|
|
| 1,174 |
|
|
| 3,270 |
|
|
| 3,698 |
|
Tangible net income available to common stockholders | $ | 29,359 |
|
| $ | 23,830 |
|
| $ | 81,544 |
|
| $ | 68,752 |
|
Adjusted tangible net income available to common stockholders: |
|
|
|
|
|
|
|
|
|
|
| ||||
Tangible net income available to common stockholders | $ | 29,359 |
|
| $ | 23,830 |
|
| $ | 81,544 |
|
| $ | 68,752 |
|
Impairment charges on assets held for sale and ROU asset |
| 394 |
|
|
| — |
|
|
| 414 |
|
|
| — |
|
Merger-related expenses |
| 6,307 |
|
|
| — |
|
|
| 8,187 |
|
|
| — |
|
Tax benefit on significant items |
| (1,617 | ) |
|
| — |
|
|
| (1,903 | ) |
|
| — |
|
Adjusted tangible net income available to common stockholders | $ | 34,443 |
|
| $ | 23,830 |
|
| $ | 88,242 |
|
| $ | 68,752 |
|
| As of or For the Three Months Ended March 31, |
| |||||
(dollars in thousands, except per share data) | 2024 |
|
| 2023 |
| ||
Adjusted non-interest expense: |
|
|
|
|
| ||
Non-interest expense | $ | 53,809 |
|
| $ | 48,800 |
|
Less: Impairment charges on assets held for sale and ROU asset |
| 194 |
|
|
| 20 |
|
Less: Merger-related expenses |
| — |
|
|
| 489 |
|
Adjusted non-interest expense | $ | 53,615 |
|
| $ | 48,291 |
|
Adjusted non-interest expense excluding amortization of intangible assets: |
|
|
|
|
| ||
Adjusted non-interest expense | $ | 53,615 |
|
| $ | 48,291 |
|
Less: Amortization of intangible assets |
| 1,345 |
|
|
| 1,455 |
|
Adjusted non-interest expense excluding amortization of intangible assets | $ | 52,270 |
|
| $ | 46,836 |
|
Pre-tax pre-provision net income: |
|
|
|
|
| ||
Pre-tax income | $ | 40,562 |
|
| $ | 32,238 |
|
Add: Provision for credit losses |
| 6,643 |
|
|
| 9,825 |
|
Pre-tax pre-provision net income | $ | 47,205 |
|
| $ | 42,063 |
|
Adjusted pre-tax pre-provision net income: |
|
|
|
|
| ||
Pre-tax pre-provision net income | $ | 47,205 |
|
| $ | 42,063 |
|
Impairment charges on assets held for sale and ROU asset |
| 194 |
|
|
| 20 |
|
Merger-related expenses |
| — |
|
|
| 489 |
|
Adjusted pre-tax pre-provision net income | $ | 47,399 |
|
| $ | 42,572 |
|
Taxable equivalent net interest income: |
|
|
|
|
| ||
Net interest income | $ | 85,541 |
|
| $ | 75,718 |
|
Add: Tax-equivalent adjustment |
| 233 |
|
|
| 208 |
|
Net interest income, fully taxable equivalent | $ | 85,774 |
|
| $ | 75,926 |
|
Total revenues: |
|
|
|
|
| ||
Net interest income | $ | 85,541 |
|
| $ | 75,718 |
|
Add: non-interest income |
| 15,473 |
|
|
| 15,145 |
|
Total revenues | $ | 101,014 |
|
| $ | 90,863 |
|
Tangible common stockholders' equity: |
|
|
|
|
| ||
Total stockholders' equity | $ | 1,009,049 |
|
| $ | 795,650 |
|
Less: Goodwill and other intangibles |
| 202,133 |
|
|
| 157,432 |
|
Tangible common stockholders' equity | $ | 806,916 |
|
| $ | 638,218 |
|
Tangible assets: |
|
|
|
|
| ||
Total assets | $ | 9,410,503 |
|
| $ | 7,530,346 |
|
Less: Goodwill and other intangibles |
| 202,133 |
|
|
| 157,432 |
|
Tangible assets | $ | 9,208,370 |
|
| $ | 7,372,914 |
|
Average tangible common stockholders' equity: |
|
|
|
|
| ||
Average total stockholders' equity | $ | 998,806 |
|
| $ | 784,289 |
|
Less: Average goodwill and other intangibles |
| 202,773 |
|
|
| 158,181 |
|
Average tangible common stockholders' equity | $ | 796,033 |
|
| $ | 626,108 |
|
Average tangible assets: |
|
|
|
|
| ||
Average total assets | $ | 9,030,941 |
|
| $ | 7,345,151 |
|
Less: Average goodwill and other intangibles |
| 202,773 |
|
|
| 158,181 |
|
Average tangible assets | $ | 8,828,168 |
|
| $ | 7,186,970 |
|
Tangible net income available to common stockholders: |
|
|
|
|
| ||
Net income available to common stockholders | $ | 30,440 |
|
| $ | 23,945 |
|
Add: After-tax intangible asset amortization |
| 986 |
|
|
| 1,066 |
|
Tangible net income available to common stockholders | $ | 31,426 |
|
| $ | 25,011 |
|
Adjusted tangible net income available to common stockholders: |
|
|
|
|
| ||
Tangible net income available to common stockholders | $ | 31,426 |
|
| $ | 25,011 |
|
Impairment charges on assets held for sale and ROU asset |
| 194 |
|
|
| 20 |
|
Merger-related expenses |
| — |
|
|
| 489 |
|
Tax benefit on significant items |
| (52 | ) |
|
| (56 | ) |
Adjusted tangible net income available to common stockholders | $ | 31,568 |
|
| $ | 25,464 |
|
8170
| As of or For the Three Months Ended September 30, |
|
| As of or For the Nine Months Ended September 30, |
| As of or For the Three Months Ended March 31, |
| |||||||||||||||
(dollars in thousands, except share and per share data) | 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| 2024 |
|
| 2023 |
| ||||||
Pre-tax pre-provision return on average assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Pre-tax pre-provision net income | $ | 46,937 |
|
| $ | 34,689 |
|
| $ | 130,129 |
|
| $ | 100,311 |
| $ | 47,205 |
|
| $ | 42,063 |
|
Average total assets |
| 8,634,345 |
|
|
| 7,145,189 |
|
|
| 7,799,187 |
|
|
| 6,943,909 |
|
| 9,030,941 |
|
|
| 7,345,151 |
|
Pre-tax pre-provision return on |
| 2.16 | % |
|
| 1.93 | % |
|
| 2.23 | % |
|
| 1.93 | % |
| 2.10 | % |
|
| 2.32 | % |
Adjusted pre-tax pre-provision return on average assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted pre-tax pre-provision net income | $ | 53,638 |
|
| $ | 34,689 |
|
| $ | 138,730 |
|
| $ | 100,311 |
| $ | 47,399 |
|
| $ | 42,572 |
|
Average total assets |
| 8,634,345 |
|
|
| 7,145,189 |
|
|
| 7,799,187 |
|
|
| 6,943,909 |
|
| 9,030,941 |
|
|
| 7,345,151 |
|
Adjusted pre-tax pre-provision return on |
| 2.46 | % |
|
| 1.93 | % |
|
| 2.38 | % |
|
| 1.93 | % |
| 2.11 | % |
|
| 2.35 | % |
Net interest margin, fully taxable equivalent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net interest income, fully taxable equivalent | $ | 92,700 |
|
| $ | 69,103 |
|
| $ | 244,999 |
|
| $ | 189,939 |
| $ | 85,774 |
|
| $ | 75,926 |
|
Total average interest-earning assets |
| 8,220,678 |
|
|
| 6,760,623 |
|
|
| 7,438,571 |
|
|
| 6,531,320 |
|
| 8,603,582 |
|
|
| 7,009,144 |
|
Net interest margin, fully taxable equivalent |
| 4.47 | % |
|
| 4.05 | % |
|
| 4.40 | % |
|
| 3.88 | % |
| 4.01 | % |
|
| 4.39 | % |
Non-interest income to total revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Non-interest income | $ | 12,376 |
|
| $ | 11,992 |
|
| $ | 41,812 |
|
| $ | 45,579 |
| $ | 15,473 |
|
| $ | 15,145 |
|
Total revenues |
| 104,828 |
|
|
| 80,867 |
|
|
| 286,148 |
|
|
| 234,817 |
|
| 101,014 |
|
|
| 90,863 |
|
Non-interest income to total revenues |
| 11.81 | % |
|
| 14.83 | % |
|
| 14.61 | % |
|
| 19.41 | % |
| 15.32 | % |
|
| 16.67 | % |
Adjusted non-interest expense to average assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted non-interest expense | $ | 51,190 |
|
| $ | 46,178 |
|
| $ | 147,418 |
|
| $ | 134,506 |
| $ | 53,615 |
|
| $ | 48,291 |
|
Average total assets |
| 8,634,345 |
|
|
| 7,145,189 |
|
|
| 7,799,187 |
|
|
| 6,943,909 |
|
| 9,030,941 |
|
|
| 7,345,151 |
|
Adjusted non-interest expense to average assets |
| 2.35 | % |
|
| 2.56 | % |
|
| 2.53 | % |
|
| 2.59 | % |
| 2.39 | % |
|
| 2.67 | % |
Adjusted efficiency ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted non-interest expense excluding | $ | 49,639 |
|
| $ | 44,567 |
|
| $ | 142,957 |
|
| $ | 129,431 |
| $ | 52,270 |
|
| $ | 46,836 |
|
Total revenues |
| 104,828 |
|
|
| 80,867 |
|
|
| 286,148 |
|
|
| 234,817 |
|
| 101,014 |
|
|
| 90,863 |
|
Adjusted efficiency ratio |
| 47.35 | % |
|
| 55.11 | % |
|
| 49.96 | % |
|
| 55.12 | % |
| 51.75 | % |
|
| 51.54 | % |
Adjusted return on average assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted net income | $ | 33,306 |
|
| $ | 22,656 |
|
| $ | 84,972 |
|
| $ | 65,250 |
| $ | 30,582 |
|
| $ | 24,398 |
|
Average total assets |
| 8,634,345 |
|
|
| 7,145,189 |
|
|
| 7,799,187 |
|
|
| 6,943,909 |
|
| 9,030,941 |
|
|
| 7,345,151 |
|
Adjusted return on average assets |
| 1.53 | % |
|
| 1.26 | % |
|
| 1.46 | % |
|
| 1.26 | % |
| 1.36 | % |
|
| 1.35 | % |
Adjusted return on average stockholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted net income | $ | 33,306 |
|
| $ | 22,656 |
|
| $ | 84,972 |
|
| $ | 65,250 |
| $ | 30,582 |
|
| $ | 24,398 |
|
Average stockholders' equity |
| 924,278 |
|
|
| 775,358 |
|
|
| 838,792 |
|
|
| 795,849 |
|
| 998,806 |
|
|
| 784,289 |
|
Adjusted return on average stockholders' equity |
| 14.30 | % |
|
| 11.59 | % |
|
| 13.54 | % |
|
| 10.96 | % |
| 12.31 | % |
|
| 12.62 | % |
Tangible common equity to tangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Tangible common equity | $ | 714,917 |
|
| $ | 587,081 |
|
| $ | 714,917 |
|
| $ | 587,081 |
| $ | 806,916 |
|
| $ | 638,218 |
|
Tangible assets |
| 8,738,340 |
|
|
| 7,117,103 |
|
|
| 8,738,340 |
|
|
| 7,117,103 |
|
| 9,208,370 |
|
|
| 7,372,914 |
|
Tangible common equity to tangible assets |
| 8.18 | % |
|
| 8.25 | % |
|
| 8.18 | % |
|
| 8.25 | % |
| 8.76 | % |
|
| 8.66 | % |
Return on average tangible common |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Tangible net income available to | $ | 29,359 |
|
| $ | 23,830 |
|
| $ | 81,544 |
|
| $ | 68,752 |
| $ | 31,426 |
|
| $ | 25,011 |
|
Average tangible common stockholders' equity |
| 721,300 |
|
|
| 614,066 |
|
|
| 665,986 |
|
|
| 629,508 |
|
| 796,033 |
|
|
| 626,108 |
|
Return on average tangible common |
| 16.15 | % |
|
| 15.40 | % |
|
| 16.37 | % |
|
| 14.60 | % |
| 15.88 | % |
|
| 16.20 | % |
Adjusted return on average tangible common |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted tangible net income available to | $ | 34,443 |
|
| $ | 23,830 |
|
| $ | 88,242 |
|
| $ | 68,752 |
| $ | 31,568 |
|
| $ | 25,464 |
|
Average tangible common stockholders' equity |
| 721,300 |
|
|
| 614,066 |
|
|
| 665,986 |
|
|
| 629,508 |
|
| 796,033 |
|
|
| 626,108 |
|
Adjusted return on average tangible common |
| 18.95 | % |
|
| 15.40 | % |
|
| 17.72 | % |
|
| 14.60 | % |
| 15.95 | % |
|
| 16.49 | % |
Tangible book value per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Tangible common equity | $ | 714,917 |
|
| $ | 587,081 |
|
| $ | 714,917 |
|
| $ | 587,081 |
| $ | 806,916 |
|
| $ | 638,218 |
|
Common shares outstanding |
| 43,719,203 |
|
|
| 37,465,902 |
|
|
| 43,719,203 |
|
|
| 37,465,902 |
|
| 44,108,387 |
|
|
| 37,713,427 |
|
Tangible book value per share | $ | 16.35 |
|
| $ | 15.67 |
|
| $ | 16.35 |
|
| $ | 15.67 |
| $ | 18.29 |
|
| $ | 16.92 |
|
8271
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 outlinesoutline 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 lives 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 FHLB, 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 clients’customers’ and Byline Bank’s needs. Typically, customer interest rate swaps are for terms of more than five years. As of September 30, 2023,March 31, 2024, we had a notional amount of $1.4$1.3 billion of interest rate derivatives outstanding which include derivatives that are designated as hedging instrumentsincludes customer swaps and derivatives that are not designated as hedging instruments.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 aof 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 net interest incomeNII simulation model incorporates various assumptions, which we believe are reasonable but which may have a significant impact on results such as: (1) the timing of changes in interest rates,asset prepayment speed assumptions, (2) shifts or rotations in the yield curve,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) differing sensitivities of financial instruments due to differing underlying rate indices, (5) the effect of interest rate limitations in our assets, such as floors and caps, (6) the effect of our interest rate swaps and (7) overall growth and repayment rates and product mix of assets and liabilities.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.
72
Potential changes to our net interest income and economic value of equity in hypothetical rising and declining interest rate scenarios calculated as of September 30, 2023 isMarch 31, 2024 are presented below (dollars in thousands). below.
|
| Estimated Increase/Decrease in |
| Estimated Percentage | ||
|
| Year ending December 31 |
| As of | ||
Basis Point Change in Interest Rates |
| 2024 |
| 2025 |
| December 31, 2023 |
+300 |
| 13.2% |
| 14.7% |
| (13.4)% |
+200 |
| 8.8% |
| 9.7% |
| (9.1)% |
+100 |
| 4.4% |
| 4.9% |
| (4.6)% |
-100 |
| (2.1)% |
| (2.8)% |
| 5.0% |
-200 |
| (5.3)% |
| (7.2)% |
| 8.9% |
-300 |
| (8.2)% |
| (10.9)% |
| 11.4% |
For the dynamic balance sheet and rate shift scenarios, we assume a balance sheet that reflects management's growth outlook and interest rates follow a forward yield curvecurve. The shocks are defined as gradual shifts up and then increasedown it by 1/12th of the total change in rates each month for 12 months.
|
| Immediate Shifts |
| |||||||||||||||||||||
Twelve Months Ending |
| +300 basis points |
|
| +200 basis points |
|
| +100 basis points |
|
| -100 basis points |
|
| -200 basis points |
|
| -300 basis points |
| ||||||
Year 1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Percentage change |
|
| 14.5 | % |
|
| 10.2 | % |
|
| 5.1 | % |
|
| (3.7 | )% |
|
| (8.9 | )% |
|
| (14.0 | )% |
Dollar amount |
| $ | 55,489 |
|
| $ | 38,930 |
|
| $ | 19,577 |
|
| $ | (13,491 | ) |
| $ | (33,177 | ) |
| $ | (52,645 | ) |
Year 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Percentage change |
|
| 18.3 | % |
|
| 12.6 | % |
|
| 6.2 | % |
|
| (5.1 | )% |
|
| (12.2 | )% |
|
| (19.3 | )% |
Dollar amount |
| $ | 76,552 |
|
| $ | 52,814 |
|
| $ | 26,330 |
|
| $ | (20,727 | ) |
| $ | (50,404 | ) |
| $ | (80,154 | ) |
83
For dynamic balance sheet and rate shifts, a gradual shift downward of 100 basis points would result in a 1.3%1.4% decrease into net interest income, and a gradual shift upwards of 100 and 200 basis points would result in 2.4%2.3% and 4.7%4.5% increases to net interest income, respectively, over the next 12 months.
The Bank's aggregate interest rate risk exposure is monitored and managed withinbased on the economic outlook and under guidance of board-approved policy limits. The results of this simulation analysisthe 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, as well as 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 September 30, 2023,March 31, 2024, 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 September 30, 2023,March 31, 2024, 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.
73
84
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, 20222023 that was filed with the SEC on March 7, 2023.4, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
On December 12, 2022,6, 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 will beis in effect from January 1, 20232024 until December 31, 20232024 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 September 30, 2023.March 31, 2024. We did not purchase any shares of our common stock during the thirdfirst quarter of 20232024 under our stock repurchase program.
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 |
| ||||
July 1 - July 31, 2023 |
|
| 1,091 |
|
| $ | 22.15 |
|
|
| — |
|
|
| 1,250,000 |
|
August 1 - August 31, 2023 |
|
| 1,548 |
|
|
| 22.07 |
|
|
| — |
|
|
| 1,250,000 |
|
September 1 - September 30, 2023 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,250,000 |
|
Total |
|
| 2,639 |
|
| $ | 22.10 |
|
|
| — |
|
|
|
| |
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 |
| ||||
January 1 - January 31, 2024 |
|
| 146,308 |
|
| $ | 23.24 |
|
|
| — |
|
|
| 1,250,000 |
|
February 1 - February 29, 2024 |
|
| 78,075 |
|
|
| 21.02 |
|
|
| — |
|
|
| 1,250,000 |
|
March 1 - March 31, 2024 |
|
| 399 |
|
|
| 20.67 |
|
|
| — |
|
|
| 1,250,000 |
|
Total |
|
| 224,782 |
|
| $ | 22.46 |
|
|
| — |
|
|
|
| |
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
8574
Item 6. Exhibits.
EXHIBIT | ||
Number | Description | |
3.1 | ||
3.2 | ||
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. | |
31.1 | ||
31.2 | ||
32.1(a) | ||
101 | Financial information from the Company’s Quarterly Report on Form 10-Q for the quarterly period ended | |
104 | Cover Page Interactive Data File – the cover page XBRL tags are embedded with the Inline XBRL document. |
8675
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: | By: | /s/ | Roberto R. Herencia |
Roberto R. Herencia | |||
Chief Executive Officer | |||
(Principal Executive Officer) | |||
Date: | By: | /s/ | Thomas J. Bell III |
Thomas J. Bell III | |||
Executive Vice President, Chief Financial Officer and Treasurer | |||
(Principal Financial Officer) | |||
8776