Byline Bancorp : Second Quarter 2023 Earnings Conference Call Presentation

2Q23 Earnings Presentation

Forward-Looking Statements

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements include, without limitation, statements concerning plans, estimates, calculations, forecasts and projections with respect to the anticipated future performance of the Company. These statements are often, but not always, made through the use of words or phrases such as ''may'', ''might'', ''should'', ''could'', ''predict'', ''potential'', ''believe'', ''expect'', ''continue'', ''will'', ''anticipate'', ''seek'', ''estimate'', ''intend'', ''plan'', ''projection'', ''would'', ''annualized'', "target" and ''outlook'', or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. Forward- looking statements involve estimates and known and unknown risks, and reflect various assumptions and involve elements of subjective judgement and analysis, which may or may not prove to be correct, and which are subject to uncertainties and contingencies outside the control of Byline and its respective affiliates, directors, employees and other representatives, which could cause actual results to differ materially from those presented in this communication.

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

Certain risks and important factors that could affect Byline's future results are identified in our Annual Report on Form 10-K and other reports we file with the Securities and Exchange Commission, including among other things under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022. Any forward-looking statement speaks only as of the date on which it is made, and Byline undertakes no obligation to update any forward-looking statement, whether to reflect events or circumstances after the date on which the statement is made, to reflect new information or the occurrence of unanticipated events, or otherwise unless required under the federal securities laws. Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

Current Expected Credit Loss ("CECL") Adoption

On December 31, 2022, the Company adopted CECL and applied it retrospectively to the period beginning January 1, 2022 using the modified retrospective method of accounting. Results for reporting periods beginning after September 30, 2022 are presented under the new standard, while prior quarters previously reported are recast as if the new standard had been applied since January 1, 2022.

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Second Quarter 2023 Highlights

Net Income & EPS		PTPP		ROAA & ROTCE(1)
$26.1 million		$41.1 million		1.41% ROAA
$0.70 per diluted share		2.23% PTPP ROA		16.78% ROTCE

Organic Growth & Profitability

• Revenue of $90.5 million, up 19%; PTPP of $41.1 million, up 27%; EPS of $0.70, up 21% YoY
• Net interest income up $14.4 million or 23% YoY
• • Net interest margin (FTE)(1) stood at 4.33%
  • Loan yields expanded 35 bps
  • Deposit costs increased 55 bps
• Operating expense of $49.3 million and Efficiency ratio of 52.9%
• • Adjusted operating expenses of $47.9 million and Efficiency ratio of 51.4%

1. Represents a non-GAAP financial measure. See "Non-GAAP Reconciliation" in the appendix.

Strong Balance Sheet

• Deposits up $104.4 million or 7.2% annualized
• • Average deposits up $347.2 million or 6.3% YoY
  • Uninsured deposit ratio declined to 25.9%
• Loan and lease growth of 3.8% annualized
• • Average loans up $528.0 million or 10.5% YoY
• CET1 of $751.4 million; RWA of $7.1 billion as of 2Q23
• Cash + AFS Securities of $1.4 billion
• Kroll Bond Rating Agency, LLC reaffirmed ratings and positive outlook

Disciplined Credit & Capital Profile

• Credit quality trends remained stable QoQ with:
• • NCOs of 0.31%, up 22 bps
  • NPA/Assets of 0.54%, down 13 bps
  • 30+ DLQs of 0.17%, down 9 bps
• ACL as percent of loans and leases of 1.66%, up QoQ
• Building capital QoQ with:
• • CET1 of 10.58%, up 31 bps
  • Total Capital of 13.52%, up 33 bps
  • TCE Ratio including HTM(1) of 8.87%, up 21 bps

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Loan and Lease Trends ($ in millions)

Total Loans & Leases and Average Yield

	$5,185	$5,309		$5,469								$5,544					$5,597
																						6.83%					7.18%
								6.31%
				5.52%
	4.80%
		Q2 2022			Q3 2022			Q4 2022							Q1 2023						Q2 2023
						Total Loans and Leases														Average Loan and Lease Yield
		Portfolio Composition													Utilization Rates
								65%
			Resi																													55%
							63%
																																LTM Average
		C&D	9%
						61%
	7%
						59%
						C&I	57%
				38%		55%
		Commercial																																				54.4%
						53%
		Real Estate					51%
	35%
						49%
				Leasing	47%
				11%								2Q				4Q				2Q		4Q		2Q				4Q			2Q
								2020			2020	2021			2021			2022	2022				2023

(1) Cumulative Beta calculated as the change in yield on loans and leases from 4Q21 to 2Q23 divided by the change in average Fed Funds from 4Q21 to 2Q23.

Highlights

• Total loans and leases were $5.6 billion at 2Q23, an increase of $52.8 million, or 3.8% annualized
• • Originated $312.1 million in new loans, net of loan sales in 2Q23 compared to $249.4 million in 1Q23
  • • Production driven by commercial and lease originations of $102.9 million and $88.8 million respectively
• Payoff activity increased by $25.0 million from 1Q23
• Cumulative Loan Beta(1): 44%

Originations and Payoffs

$443

		$303			$269							$312
		$216			$249 $231			$256
				$174
$128
	Q2 2022				Q3 2022	Q4 2022				Q1 2023	Q2 2023
			Loan & Lease Originations					Loan & Lease Payoffs

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Government-Guaranteed Lending ($ in millions)

On Balance Sheet SBA 7(a) & USDA Loans

	$ Balance	% of Portfolio
Unguaranteed	$383.7	6.9%
Guaranteed	88.9	1.6%
Total SBA 7(a) Loans	$472.6	8.5%
Unguaranteed	$37.0	0.7%
Guaranteed	21.5	0.4%
Total USDA Loans	$58.4	1.0%

Highlights

• A leading SBA 7(a) lender as of June 30, 2023
• • Awarded top SBA 7(a) lender in Illinois for the 14th consecutive year
• Closed $140.5 million in loan commitments in 2Q23
• SBA 7(a) portfolio $472.6 million, down $3.3 million from 1Q23
• • ACL/Unguaranteed loan balance ~9.1%
• $1.7 billion in serviced government guaranteed loans for investors in 2Q23

Unguaranteed Loan Portfolio by Industry

Total SBC Closed Loan Commitments

Retail Trade

All Other Industries (1)

Food Services

Manufacturing

Health Care

Transportation

Wholesale Trade

Finance and Insurance

Professional

Other Services

Construction

6%

6%

5%

5%

5%

5%

8%

17%

16%

15%

12%

	$151.4	$140.5
$125.3
	$120.9
		$71.2

Q2 2022

Q3 2022

Q4 2022

Q1 2023

Q2 2023

(1) Represents sectors with less than 5% of the total portfolio.

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