Market Overview

Byline Bancorp, Inc. Reports Fourth Quarter 2017 Financial Results

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Fourth Quarter 2017 Summary

  • Net loss of $766,000, or $0.03 per diluted share
  • Adjusted net income (non-GAAP) of $7.3 million, or $0.24 per
    diluted share, excluding significant items for:
    • Incremental tax expense of $7.2 million, or $0.24 per diluted
      share, from enactment of Tax Cuts and Jobs Act
    • Merger-related expenses of $1.3 million, or $0.04 per diluted
      share
  • Net interest margin improves to 4.26%
  • Loan originations of $120.7 million
  • Entered into an agreement to acquire First Evanston Bancorp, Inc.
  • Efficiency ratio of 66.06%

Full Year 2017 Summary

  • Net income of $21.7 million, or $0.38 per diluted share
  • Adjusted net income (non-GAAP) of $25.5 million, or $0.52 per
    diluted share, excluding significant items
  • Net interest margin of 4.11%
  • Loan originations of $422.5 million
  • Efficiency ratio of 67.32%

Byline Bancorp, Inc. (the "Company")(NYSE:BY), the parent company of
Byline Bank (the "Bank"), today reported net loss of $766,000, or $0.03
per diluted share, for the fourth quarter of 2017, compared with net
income of $9.8 million, or $0.32 per diluted share, for the third
quarter of 2017, and net income of $63.9 million, or $2.62 per diluted
share, for the fourth quarter of 2016. Fourth quarter 2017 financial
results include $7.2 million, or $0.24 per diluted share, in expense
related to the reduction in the value of the Company's net deferred tax
assets as a result of the decrease in the federal corporate tax rate and
$1.3 million, or $0.04 per diluted share, in merger-related expense.
Excluding these significant items, adjusted earnings were $7.3 million,
or $0.24 per diluted share, for the fourth quarter of 2017.

"Although the fourth quarter of 2017 included several significant items
related to the tax law changes and merger-related expenses, we continued
to see positive momentum in our new business development activity," said
Alberto J. Paracchini, President and Chief Executive Officer of Byline
Bancorp, Inc. "Our total loans and leases increased at a 10.9%
annualized rate in the quarter, driven by strong growth in our
commercial real estate and commercial and industrial portfolios. Our
Small Business Capital operations also had a strong quarter, with $132.3
million in closed loan commitments and more than $9.0 million net gain
on the sale of loans.

"We remain focused on executing our strategy of pursuing disciplined
organic growth in 2018. Our pending acquisition of First Evanston
Bancorp, Inc. will enable us to enter new markets in the greater Chicago
metropolitan area, provide us with increased scale and allow us the
opportunity to add a productive team of experienced commercial, retail
and wealth management professionals. We are highly focused on completing
the First Evanston acquisition and providing a smooth transition for our
new customers and colleagues," said Mr. Paracchini.

STATEMENTS OF OPERATIONS

Net Interest Income

The following table presents net interest income for the periods
indicated:

  Three Months Ended     Year Ended
December 31,     September 30,     June 30,     March 31, December 31,     December 31,
(dollars in thousands) 2017 2017 2017 2017 2017 2016

INTEREST AND DIVIDEND INCOME

Interest and fees on loans and leases

$ 31,896 $ 30,933 $ 29,181 $ 28,396 $ 120,406 $ 83,150
Interest on taxable securities 3,679 3,720 3,703 3,790 14,892 14,169
Interest on tax-exempt securities 176 174 151 133 634 653

Other interest and dividend income

  205   217   280   169   871   393

Total interest and dividend income

35,956 35,044 33,315 32,488 136,803 98,365
INTEREST EXPENSE
Deposits 2,218 2,112 1,923 1,483 7,736 4,580
Federal Home Loan Bank advances 1,009 850 772 660 3,291 706

Subordinated debentures and other borrowings

  578   670   809   807   2,864   2,461
Total interest expense   3,805   3,632   3,504   2,950   13,891   7,747
Net interest income $ 32,151 $ 31,412 $ 29,811 $ 29,538 $ 122,912 $ 90,618
 

The following table presents the quarter-to-date schedule of average
interest-earning assets and average interest-bearing liabilities for the
periods indicated:

  For the Three Months Ended
December 31,   September 30,
2017 2017
(dollars in thousands) Average

Balance(5)

  Interest

Inc / Exp

    Average

Yield /

Rate

Average

Balance(5)

  Interest

Inc / Exp

    Average

Yield /

Rate

ASSETS    
Cash and cash equivalents $ 38,908 $ 74 0.75 % $ 48,354 $ 106 0.87 %
Loans and leases(1) 2,233,863 31,896 5.66 % 2,193,076 30,933 5.60 %
Securities available-for-sale 588,482 3,166 2.13 % 602,146 3,181 2.10 %
Securities held-to-maturity 106,367 644 2.40 % 111,345 650 2.32 %
Tax exempt securities (2)   27,504   176 2.55 %   26,166   174 2.63 %
Total interest-earning assets $ 2,995,124 $ 35,956 4.76 % $ 2,981,087 $ 35,044 4.66 %
Allowance for loan and lease losses (16,844 ) (14,570 )
All other assets   325,393   340,669
TOTAL ASSETS $ 3,303,673 $ 3,307,186

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits
Interest checking $ 188,457 $ 31 0.07 % $ 186,447 $ 29 0.06 %
Money market accounts 384,864 344 0.35 % 388,365 275 0.28 %
Savings 436,916 78 0.07 % 441,096 79 0.07 %
Time deposits   709,044   1,765 0.99 %   758,518   1,729 0.90 %
Total interest bearing deposits   1,719,281   2,218 0.51 %   1,774,426   2,112 0.47 %
Federal Home Loan Bank advances 261,888 1,009 1.53 % 222,800 850 1.51 %
Other borrowed funds   58,794   578 3.90 %   60,418   670 4.40 %
Total borrowings   320,682   1,587 1.96 %   283,218   1,520 2.13 %
Total interest-bearing liabilities $ 2,039,963 $ 3,805 0.74 % $ 2,057,644 $ 3,632 0.70 %
Non-interest bearing demand deposits 767,985 748,523
Other liabilities 32,424 42,577
Total stockholders' equity   463,301   458,442

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$ 3,303,673 $ 3,307,186
Net interest spread(3)   4.02 %   3.96 %
Net interest income $ 32,151 $ 31,412
Net interest margin(4)   4.26 %   4.18 %
 
Net loan accretion impact on margin $ 2,301   0.30 % $ 2,166   0.29 %

Net interest margin excluding loan accretion(6)

  3.96 %   3.89 %
 
    (1)   Loan and lease balances are net of deferred origination fees and
costs and initial indirect costs. Non-accrual loans and leases are
included in total loan and lease balances.
(2) Interest income and rates exclude the effects of a tax equivalent
adjustment to adjust tax exempt investment income on tax-exempt
investment securities to a fully taxable basis due to immateriality.
(3) Represents the average rate earned on interest-earning assets minus
the average rate paid on interest-bearing liabilities.
(4) Represents net interest income (annualized) divided by total average
earning assets.
(5) Average balances are average daily balances.
(6) Represents a non-GAAP financial measure. See "Reconciliation of
non-GAAP Financial Measures" for a reconciliation of our non-GAAP
measures to the most directly comparable GAAP financial measure.
 

Net interest income for the fourth quarter of 2017 was $32.2 million, an
increase of $739,000 from $31.4 million for the third quarter of 2017.

The increase in net interest income was primarily due to:

  • An increase of $963,000 in interest and fees on loans and leases,
    primarily due to the growth in the originated loan and lease portfolio
    and the increase in average yield on loans and leases to 5.66% for the
    fourth quarter of 2017 compared to 5.60% for the third quarter of
    2017; and
  • A decrease of $92,000 in interest expense on other borrowings,
    primarily due to the repayment of the outstanding balance of $16.2
    million under the Company's line of credit during the third quarter of
    2017.

Partially offset by:

  • An increase of $159,000 in interest expense on Federal Home Loan Bank
    advances, primarily due to an increase in advances outstanding during
    the quarter; and
  • An increase of $106,000 in interest expense on deposits, primarily due
    to higher rates on money market accounts and time deposits.

Net interest margin for the fourth quarter of 2017 was 4.26%, an
increase of 8 basis points from the third quarter of 2017. The net
interest margin increase was primarily driven by the increased loan and
lease volume and yields during the quarter. Total net loan accretion on
acquired loans contributed 30 basis points to the net interest margin
for the fourth quarter of 2017 and 29 basis points for the third quarter
of 2017. Net interest margin excluding loan accretion expanded 7 basis
points to 3.96% during the fourth quarter.

The cost of average total deposits was 0.35%, an increase of two basis
points from the third quarter of 2017 due to slightly higher rates on
interest bearing deposits, offset by growth in quarter-to-date average
non-interest bearing demand deposits of $19.5 million.

Provision for Loan and Lease Losses

The provision for loan and lease losses was $3.3 million for the fourth
quarter of 2017, a decrease of $553,000 compared to $3.9 million for the
third quarter of 2017. The fourth quarter provision included allocations
of $1.9 million for acquired non-impaired loans, $806,000 for originated
loans and leases and a $625,000 provision for acquired impaired loans.
The lower provision for the fourth quarter of 2017 was mainly due to
lower historical loss rates offset by additional growth in the loan and
lease portfolio.

Non-interest Income

The following table presents the components of non-interest income for
the periods indicated:

  Three Months Ended     Year Ended
December 31,     September 30,     June 30,     March 31, December 31,     December 31,
(dollars in thousands) 2017 2017 2017 2017 2017 2016
NON-INTEREST INCOME

Fees and service charges on deposits

$ 1,304 $ 1,418 $ 1,348 $ 1,219 $ 5,289 $ 5,665
Servicing fees 704 959 1,076 919 3,658 1,906
ATM and interchange fees 1,498 1,495 1,499 1,348 5,840 5,856

Net gains on sales of securities available-for-sale

8 8 3,227
Net gains on sales of loans 9,036 7,499 8,445 8,082 33,062 4,323
Other non-interest income   97   547   825   732   2,201   4,927
Total non-interest income $ 12,639 $ 11,918 $ 13,193 $ 12,308 $ 50,058 $ 25,904
 

Non-interest income for the fourth quarter of 2017 was $12.6 million, an
increase of $721,000 from $11.9 million for the third quarter of 2017,
primarily due to:

  • An increase of $1.5 million in net gains on sales of loans; and
  • A decrease of $255,000 in servicing fees, primarily due to the change
    in fair value of the servicing asset as a result of increases in
    prepayment speeds on government guaranteed loans.

During the fourth quarter of 2017, the Company sold $87.9 million of
government guaranteed loans compared to $71.8 million during the third
quarter of 2017, contributing to the increase in net gains on sale of
loans for the quarter.

Non-interest Expense

The following table presents the components of non-interest expense for
the periods indicated:

  Three Months Ended   Year Ended
December 31,   September 30,     June 30,     March 31, December 31,   December 31,
(dollars in thousands) 2017 2017 2017 2017 2017 2016
NON-INTEREST EXPENSE
Salaries and employee benefits $ 17,118 $ 16,323 $ 17,226 $ 16,602 $ 67,269 $ 50,585
Occupancy expense, net 3,553 3,301 3,485 3,739 14,078 14,330
Equipment expense 663 630 616 563 2,472 2,032
Loan and lease related expenses 1,116 891 801 877 3,685 2,004
Legal, audit and other professional fees 2,658 1,608 1,090 1,671 7,027 5,862
Data processing 2,284 2,399 2,447 2,409 9,539 8,157

Net (gain) loss recognized on other real estate owned and other
related expenses

(430 ) 565 141 (570 ) (294 ) 1,719
Regulatory assessments 299 326 384 184 1,193 2,553
Other intangible assets amortization expense 767 769 769 769 3,074 3,003
Advertising and promotions 232 196 318 289 1,035 623
Telecommunications 428 351 396 418 1,593 1,698
Other non-interest expense   1,670   3,706   1,576   1,900   8,852   8,120
Total non-interest expense $ 30,358 $ 31,065 $ 29,249 $ 28,851 $ 119,523 $ 100,686
 

Non-interest expense for the fourth quarter of 2017 was $30.4 million, a
decrease of $707,000 from $31.1 million for the third quarter of 2017.

The decrease in total non-interest expense was primarily due to:

  • A decrease of $2.0 million in other non-interest expense, primarily
    due to a $951,000 decrease in impairment charges on assets held for
    sale; and
  • A decrease of $995,000 in net loss recognized on other real estate
    owned and other related expenses, primarily due to increased gains on
    sales of assets during the quarter and lower other real estate owned
    expenses; and
  • A $409,000 decrease in provision for unfunded commitments, primarily
    due to the funding of outstanding commitments.

Partially offset by:

  • An increase of $1.1 million in legal, audit and other professional
    fees, primarily due to professional services related to the First
    Evanston Bancorp, Inc. acquisition announced during the fourth quarter
    of 2017; and
  • An increase of $795,000 in salaries and employee benefits, primarily
    due to higher commissions and additional salary and benefit expenses
    for new hires; and
  • An increase of $252,000 in occupancy expense primarily due to a
    reduction in real estate tax expenses during the third quarter.

The Company's efficiency ratio was 66.06% for the fourth quarter of
2017, compared with 69.92% for the third quarter of 2017.

INCOME TAXES

The Company recorded income tax expense of $11.9 million during the
fourth quarter of 2017 compared to a benefit of $1.4 million during the
third quarter of 2017, an increase of $13.2 million. On December 22,
2017, President Donald Trump signed into law "H.R. 1", commonly known as
the "Tax Cuts and Jobs Act". Among other items, the law reduced the
federal corporate income tax rate to 21% effective January 1, 2018. As a
result of the rate change, the Company's net deferred tax assets were
required to be revalued during the period in which the new legislation
was enacted, and recorded net income tax expense of $7.2 million, or
$0.24 per diluted share, during the fourth quarter as a result of this
change. As a result of the new 21% corporate federal tax rate, the
Company expects its effective tax rate for 2018 to be approximately 27%
to 29%.

Also contributing to the increase in income tax expense in the current
quarter, the Company recorded a state income tax benefit of $4.6
million, or $0.16 per diluted share, during the quarter ended September
30, 2017, as a result of increased value to the deferred tax asset
related to the Company's Illinois net loss deduction. As part of a
budget package passed by the Legislature of the State of Illinois, the
Illinois corporate income tax rate increased from 5.25% to 7.00%
effective July 1, 2017.

STATEMENTS OF FINANCIAL CONDITION

Total assets were $3.4 billion at December 31, 2017, an increase of
$60.7 million from $3.3 billion at September 30, 2017, and an increase
of $70.3 million compared to $3.3 billion at December 31, 2016.

The increase was primarily due to:

  • An increase in loans and leases of $61.0 million from $2.2 billion at
    September 30, 2017 to $2.3 billion at December 31, 2017; and
  • An increase in due from counterparty of $18.7 million due to an
    increase in loans sold and not settled at December 31, 2017.

Partially offset by:

  • A decrease in net deferred tax assets of $10.4 million, to $50.0
    million, primarily due to the revaluing of the asset during the fourth
    quarter of 2017.

The following table shows our allocation of the originated, acquired
impaired and acquired non-impaired loans and leases at the dates
indicated:

  December 31, 2017   September 30, 2017   December 31, 2016
(dollars in thousands) Amount   % of Total Amount   % of Total Amount   % of Total
Originated loans and leases      
Commercial real estate $ 513,622 22.5 % $ 463,020 20.9 % $ 338,752 15.8 %
Residential real estate 400,571 17.6 % 398,062 18.0 % 394,168 18.3 %

Construction, land development, and other land

97,638 4.3 % 85,666 3.9 % 119,357 5.6 %
Commercial and industrial 416,499 18.3 % 390,331 17.6 % 309,097 14.4 %
Installment and other 3,724 0.2 % 2,726 0.1 % 2,021 0.1 %
Leasing financing receivables   141,329   6.2 %   134,193   6.0 %   118,493   5.5 %
Total originated loans and leases $ 1,573,383 69.1 % $ 1,473,998 66.5 % $ 1,281,888 59.7 %
Acquired impaired loans
Commercial real estate $ 166,712 7.3 % $ 173,106 7.8 % $ 207,303 9.7 %
Residential real estate 144,562 6.4 % 152,149 6.9 % 175,717 8.2 %

Construction, land development, and other land

5,946 0.3 % 5,424 0.2 % 6,979 0.3 %
Commercial and industrial 10,008 0.4 % 11,433 0.5 % 13,464 0.6 %
Installment and other   462   0.0 %   488   0.0 %   574   0.0 %
Total acquired impaired loans $ 327,690 14.4 % $ 342,600 15.4 % $ 404,037 18.8 %
Acquired non-impaired loans and leases
Commercial real estate $ 211,359 9.3 % $ 225,759 10.2 % $ 250,289 11.6 %
Residential real estate 32,085 1.4 % 32,451 1.5 % 40,853 1.9 %

Construction, land development, and other land

1,845 0.1 % 3,214 0.2 % 14,430 0.7 %
Commercial and industrial 94,731 4.1 % 100,291 4.5 % 115,677 5.4 %
Installment and other 42 0.0 % 38 0.0 % 364 0.0 %
Leasing financing receivables   36,357   1.6 %   38,148   1.7 %   40,473   1.9 %

Total acquired non-impaired loans and leases

$ 376,419   16.5 % $ 399,901   18.1 % $ 462,086   21.5 %
Total loans and leases $ 2,277,492   100.0 % $ 2,216,499   100.0 % $ 2,148,011   100.0 %
Allowance for loan and lease losses   (16,706 )   (15,980 )   (10,923 )

Total loans and leases, net of allowance for loan and lease losses

$ 2,260,786 $ 2,200,519 $ 2,137,088
 

ASSET QUALITY

Non-Performing Assets

The following table sets forth the amounts of non-performing loans and
leases, non-performing assets, and other real estate owned at the dates
indicated:

(dollars in thousands)   December 31, 2017   September 30, 2017   June 30, 2017   March 31, 2017   December 31, 2016
Non-accrual loans and leases $ 15,763 $ 15,121 $ 15,296 $ 7,843 $ 6,784

Past due loans and leases 90 days or more and still accruing
interest

Accruing troubled debt restructured loans   1,061   1,631   981   1,004   602
Total non-performing loans and leases 16,824 16,752 16,277 8,847 7,386
Other real estate owned   10,626   13,859   12,684   13,173   16,570
Total non-performing assets $ 27,450 $ 30,611 $ 28,961 $ 22,020 $ 23,956

Total non-performing loans and leases as a percentage of total
loans and leases

0.74 % 0.76 % 0.76 % 0.41 % 0.34 %

Total non-performing assets as a percentage of total assets

0.82 % 0.93 % 0.86 % 0.67 % 0.73 %

Allowance for loan and lease losses as a percentage of
non-performing loans and leases

99.30 % 95.39 % 85.82 % 133.57 % 147.88 %
 

Variances in non-performing assets:

  • Non-performing loans and leases were $16.8 million at December 31,
    2017 and September 30, 2017; and
  • Other real estate owned was $10.6 million at December 31, 2017, a
    decrease of $3.2 million from $13.9 million at September 30, 2017.

Allowance for Loan and Lease Losses

The following table presents the balance and activity within the
allowance for loan and lease losses for the periods indicated:

  Three Months Ended   Year Ended
December 31,   September 30,   June 30,   March 31, December 31,   December 31,
(dollars in thousands) 2017 2017 2017 2017 2017 2016

Allowance for loan and lease losses, beginning of period

$ 15,980 $ 13,969 $ 11,817 $ 10,923 $ 10,923 $ 7,632
Provision for loan and lease losses 3,347 3,900 3,515 1,891 12,653 10,352
Net (charge-offs) recoveries of loans   (2,621 )   (1,889 )   (1,363 )   (997 )   (6,870 )   (7,061 )

Allowance for loan and lease losses, end of period

$ 16,706 $ 15,980 $ 13,969 $ 11,817 $ 16,706 $ 10,923
 

Allowance for loan and lease losses to period end total loans held
for investment

0.73 % 0.72 % 0.65 % 0.55 % 0.73 % 0.51 %

Net charge-offs (annualized) to average loans outstanding during
the period

0.46 % 0.34 % 0.26 % 0.19 % 0.31 % 0.42 %

Provision for loan and lease losses to net charge-offs during the
period

1.28 x 2.06 x 2.58 x 1.90 x 1.84 x 1.47 x
 

The allowance for loan and lease losses as a percentage of total loans
and leases held for investment increased from 0.72% at September 30,
2017 to 0.73% at December 31, 2017.

Net Charge-Offs

Net charge-offs during the fourth quarter of 2017 were $2.6 million, or
0.46% of average loans and leases, on an annualized basis, an increase
of $732,000 compared to $1.9 million, or 0.34%, during the third quarter
of 2017, and 0.31% for the year ended December 31, 2017.

Net charge-offs for the fourth quarter of 2017 included $2.1 million in
the non-guaranteed portion of SBA loans and $84,000 for commercial
banking while net charge-offs for the third quarter of 2017 included
$591,000 in the non-guaranteed portion of SBA loans and $846,000 for
commercial banking.

Deposits and Other Liabilities

The following table presents the composition of deposits at the dates
indicated:

  December 31,     September 30,     June 30,     March 31,     December 31,
(dollars in thousands) 2017 2017 2017 2017 2016
Non-interest bearing demand deposits $ 760,887 $ 753,662 $ 781,636 $ 732,267 $ 724,457
Interest bearing checking accounts 186,611 187,232 182,351 192,317 173,929
Money market demand accounts 349,862 418,006 353,304 393,372 369,074
Other savings 437,212 435,536 445,220 446,847 446,418
Time deposits (below $100,000) 368,549 377,929 395,385 407,471 392,854
Time deposits ($100,000 and above)   340,208   348,564   382,702   403,565   383,662
Total deposits $ 2,443,329 $ 2,520,929 $ 2,540,598 $ 2,575,839 $ 2,490,394
 

Total deposits were $2.4 billion at December 31, 2017, a decrease of
$77.6 million compared to the previous quarter and a decrease of $47.1
million compared to December 31, 2016.

The decrease in the current quarter was primarily due to:

  • A decrease in money market deposits of $68.1 million, from $418.0
    million at September 30, 2017 to $349.9 million at December 31, 2017,
    primarily due to variability in a public deposit relationship during
    the fourth quarter 2017; and
  • A decrease in time deposits of $17.7 million, from $726.5 million at
    September 30, 2017 to $708.8 million at December 31, 2017. The
    decrease in balances was driven by the non-renewal of prior
    promotional rate time deposits.

Partially offset by:

  • An increase in non-interest bearing demand deposits of $7.2 million,
    from $753.7 million at September 30, 2017 to $760.9 million at
    December 31, 2017; and
  • An increase in savings deposits of $1.7 million, from $435.5 million
    at September 30, 2017 to $437.2 million at December 31, 2017.

Total borrowings and other liabilities were $464.2 million at
December 31, 2017, an increase of $139.2 million from $325.0 million at
September 30, 2017, and an increase of $41.7 million from $422.8 million
at December 31, 2016.

The increase was primarily due to:

  • An increase in Federal Home Loan Bank advances of $126.9 million, from
    $234.6 million at September 30, 2017 to $361.5 million at December 31,
    2017, primarily due to the Bank's ongoing funding needs as a result of
    increased loan demand; and
  • An increase in accrued expenses and other liabilities of $11.6
    million, from $30.9 million at September 30, 2017 to $42.6 million at
    December 31, 2017, primarily due to loan purchases not yet settled of
    $9.8 million during the fourth quarter of 2017.

Stockholders' Equity

Total stockholders' equity was $458.6 million at December 31, 2017, a
decrease of $1.0 million from $459.5 million at September 30, 2017, and
an increase of $75.9 million from $382.7 million at December 31, 2016.

The following table presents the actual regulatory capital dollar
amounts and ratios of the Company and Byline Bank as of December 31,
2017:

  Actual   Minimum Capital

Required

  Required for the Bank

to be Considered

Well Capitalized

December 31, 2017 Amount     Ratio Amount     Ratio Amount     Ratio

Total capital to risk weighted assets:

     
Company $ 410,831 15.98 % $ 205,661 8.00 % N/A N/A
Bank 367,972 14.28 % 206,083 8.00 % $ 257,604 10.00 %
Tier 1 capital to risk weighted assets:
Company $ 392,520 15.27 % $ 154,246 6.00 % N/A N/A
Bank 349,662 13.57 % 154,562 6.00 % $ 206,083 8.00 %

Common Equity Tier 1 (CET1) to risk weighted assets:

Company $ 353,995 13.77 % $ 115,684 4.50 % N/A N/A
Bank 349,662 13.57 % 115,922 4.50 % $ 167,442 6.50 %
Tier 1 capital to average assets:
Company $ 392,520 12.25 % $ 128,178 4.00 % N/A N/A
Bank 349,662 10.89 % 128,409 4.00 % $ 160,511 5.00 %
 

Capital ratios for the period presented are based on the Basel III
regulatory capital framework as applied to the Company's current
business and operations, and are subject to, among other things,
completion and filing of the Company's regulatory reports and ongoing
regulatory review and implementation guidance.

Conference Call, Webcast and Slide Presentation

The Company will host a conference call and webcast at 9:00 a.m. Central
Time (10:00 a.m. Eastern Time) on Friday, January 26, 2018 to discuss
its quarterly financial results. Analysts and investors may participate
in the question-and-answer session. The call can be accessed via
telephone at (888) 317-6016. A recorded replay can be accessed through
February 9, 2018 by dialing (877) 344-7529; passcode: 10115834.

A slide presentation relating to the fourth quarter 2017 results will be
accessible prior to the scheduled conference call. The slide
presentation and webcast of the conference call can be accessed on the News
and Events
page of the Company's investor relations website at www.bylinebancorp.com.

About Byline Bancorp, Inc.

Headquartered in Chicago, Byline Bancorp, Inc. is the parent company for
Byline Bank, a full service commercial bank serving small- and
medium-sized businesses, financial sponsors, and consumers. Byline Bank
has approximately $3.4 billion in assets and operates more than 50 full
service branch locations throughout the Chicago and Milwaukee
metropolitan areas. Byline Bank offers a broad range of commercial and
retail banking products and services including small ticket equipment
leasing solutions and is one of the top 10 Small Business Administration
lenders in the United States.

Non-GAAP Financial Measures

This release contains certain financial information determined by
methods other than in accordance with accounting principles generally
accepted in the United States of America ("GAAP"). These measures
include non-interest income to total revenues, pre-tax pre-provision
return on average assets, tangible book value per share and tangible
common equity to tangible assets. Management believes that these
non-GAAP financial measures provide useful information to management and
investors that is supplementary to the Company's financial condition,
results of operations and cash flows computed in accordance with GAAP;
however, management acknowledges that our non-GAAP financial measures
have a number of limitations. As such, these disclosures should not be
viewed 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. See "Reconciliation of Non-GAAP
Financial Measures" in the financial schedules included in this press
release for a reconciliation of the non-GAAP financial measures to the
comparable GAAP financial measures.

Adjusted net income excludes significant items, which include the net
deferred tax asset valuation reversal, incremental income tax benefit
related to Illinois corporate income tax rate increase, incremental
income tax expense related to federal corporate income tax reduction,
impairment charges on assets held for sale, and merger related expense,
adjusted for applicable income tax. Management believes the significant
items are not indicative of or useful to measure the Company's operating
performance on an ongoing basis.

Non-interest income to total revenues is non-interest income divided by
net interest income plus non-interest income. Management believes that
it is standard practice in the industry to present non-interest income
as a percentage of total revenue. Accordingly, management believes
providing these measures may be useful for peer comparison.

Pre-tax pre-provision return on average assets is pre-tax income plus
the provision for loan and lease losses, divided by average assets.
Management believes this metric is important due to the tax benefit
resulting from the reversal of the net deferred tax asset valuation
allowance, the decrease in the federal corporate income tax rate, and
the increase in the Illinois state income tax rate. The ratio
demonstrates profitability excluding the tax provision or benefit and
excludes the provision for loan and lease losses.

Tangible book value per share is calculated as tangible common equity,
which is stockholders' equity reduced by preferred stock and goodwill
and other intangible assets, divided by total shares of common stock
outstanding. Management believes this metric is important due to the
relative changes in the book value per share exclusive of changes in
intangible assets.

Tangible common equity to tangible assets is calculated as tangible
common equity divided by tangible assets, which is total assets reduced
by goodwill and other intangible assets. Management believes this
measure is important to investors and analysts interested in relative
changes in the ratio of total stockholders' equity to total assets, each
exclusive of changes in intangible assets.

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 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. Forward-looking statements speak only as of the date they
are made, and 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.

Additional Information

The information included herein does not constitute an offer to sell or
a solicitation of an offer to buy any securities or a solicitation of
any vote or approval. Byline will file a registration statement on Form
S-4 with the SEC in connection with its proposed acquisition of First
Evanston Bancorp, Inc. ("First Evanston"), and First Evanston's
wholly-owned subsidiary, First Bank & Trust. The registration statement
will include a joint proxy statement of Byline and First Evanston, which
also will constitute a prospectus of Byline, that will be sent to the
stockholders of Byline and the shareholders of First Evanston.
INVESTORS, STOCKHOLDERS OF BYLINE AND SHAREHOLDERS OF FIRST EVANSTON ARE
ADVISED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES
AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT BYLINE,
FIRST EVANSTON AND THE PROPOSED TRANSACTION. When filed, the joint proxy
statement/prospectus and other documents relating to the merger filed by
Byline with the SEC can be obtained free of charge from the SEC's
website at www.sec.gov.
These documents also can be obtained free of charge by accessing
Byline's website at www.bylinebancorp.com
under the tab "About Us-Investor Relations." Alternatively, these
documents, when available, can be obtained free of charge from Byline
upon written request to Byline Bancorp, Inc., Attn: Corporate Secretary,
180 North LaSalle Street, Suite 300, Chicago, Illinois 60601, 60018 or
by calling (773) 244-7000, or from First Evanston upon written request
to First Evanston Bancorp, Inc., Attn: Corporate Secretary, 820 Church
Street, Evanston, Illinois 60201 or by calling (847) 733-7400.

Participants in this Transaction

Byline, First Evanston, their respective directors and executive
officers and certain of their other members of management and employees
may be deemed to be participants in the solicitation of proxies from
Byline's stockholders and First Evanston's shareholders in connection
with the proposed transaction. Information about the directors and
executive officers of Byline may be found in the prospectus of Byline
relating to its initial public offering of common stock filed with the
SEC on July 3, 2017, a copy of which can be obtained free of charge from
Byline or from the SEC's website as indicated above. In addition,
information about the directors and executive officers of Byline and
First Evanston and other persons who may be deemed participants in the
transaction will be included in the joint proxy statement/prospectus and
other relevant materials when filed with the SEC.

         
BYLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)

 
(dollars in thousands)

December 31,
2017

September 30,
2017

June 30,
2017

March 31,
2017

December 31,
2016

ASSETS
Cash and due from banks $ 19,404 $ 16,193 $ 17,740 $ 15,541 $ 17,735
Interest bearing deposits with other banks   38,945   46,043   62,081   67,726   28,798
Cash and cash equivalents 58,349 62,236 79,821 83,267 46,533
Securities available-for-sale, at fair value 583,236 584,684 591,933 590,507 608,560
Securities held-to-maturity, at amortized cost 117,163 121,453 127,397 132,897 138,846
Restricted stock, at cost 16,343 10,628 11,978 9,503 14,993
Loans held for sale 5,212 2,087 6,835 23,492 23,976
Loans and leases:
Loans and leases 2,277,492 2,216,499 2,149,390 2,143,534 2,148,011
Allowance for loan and lease losses   (16,706 )   (15,980 )   (13,969 )   (11,817 )   (10,923 )
Net loans and leases 2,260,786 2,200,519 2,135,421 2,131,717 2,137,088
Servicing assets, at fair value 21,400 21,669 21,424 21,223 21,091
Accrued interest receivable 7,670 7,183 6,961 7,498 6,866
Premises and equipment, net 95,224 96,334 98,891 99,563 102,074
Assets held for sale 9,779 12,938 13,666 13,666 14,748
Other real estate owned, net 10,626 13,859 12,684 13,173 16,570
Goodwill 51,975 51,975 51,975 51,975 51,975
Other intangible assets, net 16,756 17,522 18,290 19,058 19,826
Bank-owned life insurance 5,718 5,680 5,643 6,676 6,557
Deferred tax assets, net 49,963 60,350 58,784 62,925 67,760
Due from broker 82,699
Due from counterparty 39,824 21,084 19,257
Other assets   16,106   15,241   16,463   17,573   18,367
Total assets $ 3,366,130 $ 3,305,442 $ 3,360,122 $ 3,284,713 $ 3,295,830
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Non-interest bearing demand deposits $ 760,887 $ 753,662 $ 781,636 $ 732,267 $ 724,457
Interest bearing deposits:
NOW, savings accounts, and money market accounts 973,685 1,040,774 980,875 1,032,536 989,421
Time deposits   708,757   726,493   778,087   811,036   776,516
Total deposits 2,443,329 2,520,929 2,540,598 2,575,839 2,490,394
Accrued interest payable 1,306 1,184 1,562 1,893 2,427
Line of credit 16,150 18,150 20,650
Federal Home Loan Bank advances 361,506 234,559 219,611 209,663 313,715
Securities sold under agreements to repurchase 31,187 30,807 32,429 31,940 17,249
Junior subordinated debentures issued to capital trusts, net 27,647 27,482 27,309 27,130 26,926
Accrued expenses and other liabilities   42,577   30,948   74,732   30,415   41,811
Total liabilities 2,907,552 2,845,909 2,912,391 2,895,030 2,913,172
STOCKHOLDERS' EQUITY
Preferred stock 10,438 10,438 10,438 25,441 25,441
Common stock 292 292 292
Additional paid-in capital 391,586 391,040 390,660 313,838 313,552
Retained earnings 61,349 62,311 52,753 57,304 50,933
Accumulated other comprehensive loss, net of tax   (5,087 )   (4,548 )   (6,412 )   (6,900 )   (7,268 )
Total stockholders' equity   458,578   459,533   447,731   389,683   382,658
Total liabilities and stockholders' equity $ 3,366,130 $ 3,305,442 $ 3,360,122 $ 3,284,713 $ 3,295,830
 
 
BYLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

   
Three Months Ended Year Ended
December 31,   September 30,   June 30,   March 31, December 31,   December 31,
(dollars in thousands, except share and per share data) 2017 2017 2017 2017 2017 2016
INTEREST AND DIVIDEND INCOME
Interest and fees on loans and leases $ 31,896 $ 30,933 $ 29,181 $ 28,396 $ 120,406 $ 83,150
Interest on taxable securities 3,679 3,720 3,703 3,790 14,892 14,169
Interest on tax-exempt securities 176 174 151 133 634 653
Other interest and dividend income   205   217   280   169   871   393
Total interest and dividend income 35,956 35,044 33,315 32,488 136,803 98,365
INTEREST EXPENSE
Deposits 2,218 2,112 1,923 1,483 7,736 4,580
Federal Home Loan Bank advances 1,009 850 772 660 3,291 706
Subordinated debentures and other borrowings   578   670   809   807   2,864   2,461
Total interest expense   3,805   3,632   3,504   2,950   13,891   7,747
Net interest income 32,151 31,412 29,811 29,538 122,912 90,618
PROVISION FOR LOAN AND LEASE LOSSES   3,347   3,900   3,515   1,891   12,653   10,352

Net interest income after provision for loan and lease losses

28,804 27,512 26,296 27,647 110,259 80,266
NON-INTEREST INCOME
Fees and service charges on deposits 1,304 1,418 1,348 1,219 5,289 5,665
Servicing fees 704 959 1,076 919 3,658 1,906
ATM and interchange fees 1,498 1,495 1,499 1,348 5,840 5,856

Net gains on sales of securities available-for-sale

8 8 3,227
Net gains on sales of loans 9,036 7,499 8,445 8,082 33,062 4,323
Other non-interest income   97   547   825   732   2,201   4,927
Total non-interest income 12,639 11,918 13,193 12,308 50,058 25,904
NON-INTEREST EXPENSE
Salaries and employee benefits 17,118 16,323 17,226 16,602 67,269 50,585
Occupancy expense, net 3,553 3,301 3,485 3,739 14,078 14,330
Equipment expense 663 630 616 563 2,472 2,032
Loan and lease related expenses 1,116 891 801 877 3,685 2,004
Legal, audit and other professional fees 2,658 1,608 1,090 1,671 7,027 5,862
Data processing 2,284 2,399 2,447 2,409 9,539 8,157

Net (gain) loss recognized on other real estate owned and other
related expenses

(430 ) 565 141 (570 ) (294 ) 1,719
Regulatory assessments 299 326 384 184 1,193 2,553
Other intangible assets amortization expense 767 769 769 769 3,074 3,003
Advertising and promotions 232 196 318 289 1,035 623
Telecommunications 428 351 396 418 1,593 1,698
Other non-interest expense   1,670   3,706   1,576   1,900   8,852   8,120
Total non-interest expense   30,358   31,065   29,249   28,851   119,523   100,686

INCOME BEFORE PROVISION FOR INCOME TAXES

11,085 8,365 10,240 11,104 40,794 5,484

PROVISION (BENEFIT) FOR INCOME TAXES

  11,851   (1,390 )   4,094   4,544   19,099   (61,245 )
NET INCOME (LOSS) (766 ) 9,755 6,146 6,560 21,695 66,729
Dividends on preferred shares   196   195   10,697   189   11,277  

INCOME AVAILABLE (LOSS ATTRIBUTABLE) TO COMMON STOCKHOLDERS

$ (962 ) $ 9,560 $ (4,551 ) $ 6,371 $ 10,418 $ 66,729
EARNINGS (LOSS) PER COMMON SHARE
Basic $ (0.03 ) $ 0.33 $ (0.18 ) $ 0.26 $ 0.39 $ 3.31
Diluted $ (0.03 ) $ 0.32 $ (0.18 ) $ 0.25 $ 0.38 $ 3.27

Weighted average common shares outstanding for basic earnings
(loss) per common share

29,246,900 29,246,900 24,667,587 24,616,706 26,963,517 20,141,627

Diluted weighted average common shares outstanding for diluted
earnings (loss) per common share

29,246,900 29,752,331 24,667,587 25,078,427 27,545,523 20,430,780
 
 
BYLINE BANCORP, INC. AND SUBSIDIARIES

SELECTED FINANCIAL DATA (unaudited)

   
As of or For the Three Months Ended As of or For the Twelve Months Ended
December 31,   September 30,   June 30,   March 31, December 31,   December 31,
(dollars in thousands, except share and per share data) 2017 2017 2017 2017 2017 2016
Summary of Operations
Net interest income $ 32,151 $ 31,412 $ 29,811 $ 29,538 $ 122,912 $ 90,618
Provision for loan and lease losses 3,347 3,900 3,515 1,891 12,653 10,352
Non-interest income 12,639 11,918 13,193 12,308 50,058 25,904
Non-interest expense   30,358   31,065   29,249   28,851   119,523   100,686
Income before provision for income taxes 11,085 8,365 10,240 11,104 40,794 5,484
Provision (benefit) for income taxes   11,851   (1,390 )   4,094   4,544   19,099   (61,245 )
Net income (loss) (766 ) 9,755 6,146 6,560 21,695 66,729
Dividends on preferred shares   196   195   10,697   189   11,277  

Net income available (loss attributable) to common stockholders

$ (962 ) $ 9,560 $ (4,551 ) $ 6,371 $ 10,418 $ 66,729
 
Earnings per Common Share
Basic earnings (loss) per common share $ (0.03 ) $ 0.33 $ (0.18 ) $ 0.26 $ 0.39 $ 3.31
Diluted earnings (loss) per common share $ (0.03 ) $ 0.32 $ (0.18 ) $ 0.25 $ 0.38 $ 3.27

Weighted average common shares outstanding (basic)

29,246,900 29,246,900 24,667,587 24,616,706 26,963,517 20,141,627

Weighted average common shares outstanding (diluted)

29,246,900 29,752,331 24,667,587 25,078,427 27,545,523 20,430,780
Common shares outstanding 29,317,298 29,305,400 29,246,900 24,616,706 29,317,298 24,616,706
 
Key Ratios (annualized where applicable)
Net interest margin 4.26 % 4.18 % 4.02 % 4.00 % 4.11 % 3.59 %
Cost of deposits 0.35 % 0.33 % 0.30 % 0.24 % 0.31 % 0.20 %
Efficiency ratio(1) 66.06 % 69.92 % 66.23 % 67.11 % 67.32 % 83.83 %
Non-interest expense to average assets 3.64 % 3.73 % 3.57 % 3.53 % 3.64 % 3.66 %
Return on average stockholders' equity (0.66 )% 8.44 % 6.21 % 6.83 % 5.08 % 27.93 %
Return on average assets (0.09 )% 1.17 % 0.75 % 0.80 % 0.66 % 2.42 %
Non-interest income to total revenues(2) 28.22 % 27.51 % 30.68 % 29.41 % 28.94 % 22.23 %
Pre-tax pre-provision return on average assets(2) 1.73 % 1.47 % 1.68 % 1.59 % 1.62 % 0.57 %
Non-interest bearing deposits to total deposits 31.14 % 29.90 % 30.77 % 28.43 % 31.14 % 29.09 %
Deposits per branch $ 43,631 $ 44,227 $ 44,572 $ 45,190 $ 43,631 $ 43,691

Loans and leases held for sale and loans and lease held for
investment to total deposits

93.43 % 88.01 % 84.87 % 84.13 % 93.43 % 87.21 %
Deposits to total liabilities 84.03 % 88.58 % 87.23 % 88.97 % 84.03 % 85.49 %
Tangible book value per common share(2) $ 12.94 $ 12.95 $ 12.55 $ 11.91 $ 12.94 $ 11.59
 
Asset Quality Ratios

Non-performing loans and leases to total loan and leases held for
investment, net before ALLL

0.74 % 0.76 % 0.76 % 0.41 % 0.74 % 0.34 %

ALLL to total loans and leases held for investment, net before ALLL

0.73 % 0.72 % 0.65 % 0.55 % 0.73 % 0.51 %

Net charge-offs to average total loans and leases held for
investment, net before ALLL

0.46 % 0.34 % 0.26 % 0.19 % 0.31 % 0.42 %
Acquisition accounting adjustments(3) $ 31,693 $ 34,249 $ 37,713 $ 41,024 $ 31,693 $ 43,242
 
Capital Ratios
Common equity to assets 13.31 % 13.59 % 13.01 % 11.09 % 13.31 % 10.84 %
Tangible common equity to tangible assets(2) 11.51 % 11.73 % 11.16 % 9.12 % 11.51 % 8.85 %
Leverage ratio 12.25 % 11.95 % 11.73 % 9.59 % 12.25 % 10.07 %
Common equity tier 1 capital ratio 13.77 % 13.93 % 13.61 % 10.85 % 13.77 % 11.20 %
Tier 1 capital ratio 15.27 % 15.37 % 15.06 % 12.94 % 15.27 % 12.78 %
Total capital ratio 15.98 % 16.08 % 15.68 % 13.49 % 15.98 % 13.28 %
    (1)   Represents non-interest expense less amortization of intangible
assets divided by net interest income and non-interest income.
(2) Represents a non-GAAP financial measure. See Reconciliation of
non-GAAP Financial Measures" for a reconciliation of our non-GAAP
measures to the most directly comparable GAAP financial measure.
(3) Represents the remaining unamortized premium or unaccreted discount
as a result of applying the fair value adjustment at the time of the
business combination on acquired loans.
 
 
BYLINE BANCORP, INC. AND SUBSIDIARIES

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

 
For the Three Months Ended December 31,
2017   2016
(dollars in thousands) Average

Balance(5)

  Interest

Inc / Exp

    Average

Yield /

Rate

Average

Balance(5)

  Interest

Inc / Exp

    Average

Yield /

Rate

ASSETS    
Cash and cash equivalents $ 38,908 $ 74 0.75 % $ 41,780 $ 42 0.40 %
Loans and leases(1) 2,233,863 31,896 5.66 % 2,062,583 26,816 5.17 %
Securities available-for-sale 588,482 3,166 2.13 % 641,200 3,073 1.91 %
Securities held-to-maturity 106,367 644 2.40 % 129,564 701 2.15 %
Tax exempt securities (2)   27,504   176 2.55 %   19,228   144 2.98 %
Total interest-earning assets $ 2,995,124 $ 35,956 4.76 % $ 2,894,355 $ 30,776 4.23 %
Allowance for loan and lease losses (16,844 ) (6,971 )
All other assets   325,393   253,490
TOTAL ASSETS $ 3,303,673 $ 3,140,874

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits
Interest checking $ 188,457 $ 31 0.07 % $ 186,695 $ 34 0.07 %
Money market accounts 384,864 344 0.35 % 408,738 245 0.24 %
Savings 436,916 78 0.07 % 444,500 80 0.07 %
Time deposits   709,044   1,765 0.99 %   751,312   939 0.50 %
Total interest bearing deposits   1,719,281   2,218 0.51 %   1,791,245   1,298 0.29 %
Federal Home Loan Bank advances 261,888 1,009 1.53 % 232,607 335 0.57 %
Other borrowed funds   58,794   578 3.90 %   67,663   890 5.23 %
Total borrowings   320,682   1,587 1.96 %   300,270   1,225 1.62 %
Total interest-bearing liabilities $ 2,039,963 $ 3,805 0.74 % $ 2,091,515 $ 2,523 0.48 %
Non-interest bearing demand deposits 767,985 712,141
Other liabilities 32,424 43,169
Total stockholders' equity   463,301   294,049

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$ 3,303,673 $ 3,140,874
Net interest spread(3)   4.02 %   3.75 %
Net interest income $ 32,151 $ 28,253
Net interest margin(4)   4.26 %   3.88 %
 
Net loan accretion impact on margin $ 2,301   0.30 % $ 1,292   0.18 %

Net interest margin excluding loan accretion(6)

  3.96 %   3.70 %
    (1)   Loan and lease balances are net of deferred origination fees and
costs and initial indirect costs. Non-accrual loans and leases are
included in total loan and lease balances.
(2) Interest income and rates exclude the effects of a tax equivalent
adjustment to adjust tax exempt investment income on tax exempt
investment securities to a fully taxable basis due to immateriality.
(3) Represents the average rate earned on interest-earning assets minus
the average rate paid on interest-bearing liabilities.
(4) Represents net interest income (annualized) divided by total average
earning assets.
(5) Average balances are average daily balances.
(6) Represents a non-GAAP financial measure. See "Reconciliation of
non-GAAP Financial Measures" for a reconciliation of our non-GAAP
measures to the most directly comparable GAAP financial measure.
 
 
BYLINE BANCORP, INC. AND SUBSIDIARIES

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

 
For the Year Ended December 31,
2017   2016
(dollars in thousands) Average

Balance(5)

  Interest

Inc / Exp

    Average

Yield /

Rate

Average

Balance(5)

  Interest

Inc / Exp

    Average

Yield /

Rate

ASSETS    
Cash and cash equivalents $ 50,865 $ 401 0.79 % $ 32,927 $ 109 0.33 %
Loans and leases(1) 2,193,956 120,406 5.48 % 1,674,315 83,150 4.97 %
Securities available-for-sale 604,762 12,691 2.10 % 667,502 11,720 1.76 %
Securities held-to-maturity 114,143 2,671 2.34 % 134,477 2,733 2.03 %
Tax exempt securities (2)   23,413   634 2.71 %   20,504   653 3.18 %
Total interest-earning assets $ 2,987,139 $ 136,803 4.58 % $ 2,529,725 $ 98,365 3.89 %
Allowance for loan and lease losses (13,755 ) (7,385 )
All other assets   328,847   232,398
TOTAL ASSETS $ 3,302,231 $ 2,754,738

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits
Interest checking $ 186,177 $ 118 0.06 % $ 187,042 $ 131 0.07 %
Money market accounts 378,796 1,056 0.28 % 401,628 992 0.25 %
Savings 443,024 316 0.07 % 442,458 307 0.07 %
Time deposits   764,114   6,246 0.82 %   583,022   3,150 0.54 %
Total interest bearing deposits   1,772,111   7,736 0.44 %   1,614,150   4,580 0.28 %
Federal Home Loan Bank advances 252,720 3,291 1.30 % 151,508 706 0.47 %
Other borrowed funds   66,280   2,864 4.32 %   45,172   2,461 5.45 %
Total borrowings   319,000   6,155 1.93 %   196,680   3,167 1.61 %
Total interest-bearing liabilities $ 2,091,111 $ 13,891 0.66 % $ 1,810,830 $ 7,747 0.43 %
Non-interest bearing demand deposits 744,797 666,221
Other liabilities 38,984 38,737
Total stockholders' equity   427,339   238,950

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$ 3,302,231 $ 2,754,738
Net interest spread(3)   3.92 %   3.46 %
Net interest income $ 122,912 $ 90,618
Net interest margin(4)   4.11 %   3.59 %
 
Net loan accretion impact on margin $ 8,647   0.29 % $ 2,795   0.11 %

Net interest margin excluding loan accretion(6)

  3.82 %   3.48 %
    (1)   Loan and lease balances are net of deferred origination fees and
costs and initial indirect costs. Non-accrual loans and leases are
included in total loan and lease balances.
(2) Interest income and rates exclude the effects of a tax equivalent
adjustment to adjust tax exempt investment income on tax exempt
investment securities to a fully taxable basis due to immateriality.
(3) Represents the average rate earned on interest-earning assets minus
the average rate paid on interest-bearing liabilities.