BYLINE BANCORP, INC.

Previous wording

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, there can be no assurance that actual strategies, actions or results will not differ materially from expectations and readers are cautioned not to place undue reliance on such statements.

Current wording

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.

Previous wording

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 SBA loans and was the second most active 7(a) and 504 lender in Illinois for the quarter ended March 31, 2025.

Current wording

We are a bank holding company headquartered in Chicago, Illinois, and conduct all our business activities through our subsidiary, Byline Bank, a full service commercial bank, and Byline Bank’s subsidiaries. Through Byline Bank, we offer a broad range of banking products and services to small and medium sized businesses, commercial real estate and financial sponsors and to consumers who generally live or work near our branches. We also offer online account opening to consumer and business customers through our website and provide trust and wealth management services to our customers. In addition to our traditional commercial banking business, we provide small ticket equipment leasing solutions through Byline Financial Group, a wholly-owned subsidiary of Byline Bank, headquartered in Bannockburn, Illinois, with sales offices in Illinois, and sales representatives in Illinois, Michigan, and New York. We participate in U.S. government guaranteed lending programs and originate U.S. government guaranteed loans. Byline Bank is a leading originator of SBA loans and was the most active 7(a) lender in Illinois for the fiscal year ended June 30, 2025.

Previous wording

First Security Bancorp, Inc. Acquisition Section

Current wording

First Security Bancorp, Inc. Acquisition

Previous wording

On April 1, 2025, we completed our acquisition of First Security Bancorp, Inc. ("First Security") under the terms of a definitive merger agreement. As a result of the merger, First Security's wholly-owned bank subsidiary, First Security Trust and Savings Bank, was merged with and into Byline Bank. As of March 31, 2025, First Security reported approximately $313.4 million in total assets, $156.7 million in total loans, and $279.2 million in total deposits. Refer to Note 3—Acquisition of a Business for additional information.

Current wording

On April 1, 2025, we completed our acquisition (the "First Security acquisition") of First Security Bancorp, Inc. ("First Security") under the terms of a definitive merger agreement. As a result of the merger, First Security's wholly-owned bank subsidiary, First Security Trust and Savings Bank, was merged with and into Byline Bank. Refer to Note 3—Acquisition of a Business for additional discussion.

Previous wording

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").

Current wording

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").

Previous wording

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.

Current wording

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.

Previous wording

(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.

Current wording

(1) Represents a non-GAAP financial measure. See "Reconciliations of non-GAAP Financial Measures" for a reconciliation to the most directly comparable GAAP financial measure.

Previous wording

We reported consolidated net income of $28.2 million for the three months ended March 31, 2025 compared to net income of $30.4 million for the three months ended March 31, 2024, a decrease of $2.2 million. The decrease in net income was primarily attributable to an increase in non-interest expense of $2.6 million and an increase in the provision for credit losses of $2.5 million, partially offset by a $2.7 million increase in net interest income. Net income available to common stockholders was $0.65 per basic and $0.64 per diluted common share, for the three months ended March 31, 2025 compared to $0.70 per basic and per diluted common share, for the three months ended March 31, 2024.

Current wording

We reported consolidated net income of $30.1 million for the three months ended June 30, 2025 compared to net income of $29.7 million for the three months ended June 30, 2024, an increase of $411,000. The increase in net income was attributable to a $9.4 million increase in net interest income and a $1.6 million increase in non-interest income, offset by a $6.4 million increase in non-interest expense, and a $5.9 million increase in provision for credit losses. Net income was $0.66 per basic and per diluted common share for the three months ended June 30, 2025, compared to $0.68 per basic and per diluted common share for the three months ended June 30, 2024.

Previous wording

Our annualized return on average assets was 1.25% for the three months ended March 31, 2025 compared to 1.36% for the three months ended March 31, 2024. Our annualized return on average stockholders’ equity was 10.32% for the three months ended March 31, 2025 compared to 12.26% for the three months ended March 31, 2024. Our efficiency ratio was 53.66% for the three months ended March 31, 2025 compared to 51.94% for the three months ended March 31, 2024.

Current wording

Our annualized return on average assets was 1.25% for the three months ended June 30, 2025 compared to 1.31% for the three months ended June 30, 2024. Our annualized return on average stockholders’ equity was 10.24% for the three months ended June 30, 2025 compared to 11.83% for the three months ended June 30, 2024. Our efficiency ratio was 52.61% for the three months ended June 30, 2025 compared to 52.19% for the three months ended June 30, 2024. Our adjusted efficiency ratio was 48.20% for the three months ended June 30, 2025, compared to 52.19% for the three months ended June 30, 2024.

Previous wording

We reported consolidated net income of $28.2 million, or $0.65 per basic and $0.64 per diluted common share, for the three months ended March 31, 2025, compared to net income of $30.4 million, or $0.70 per basic and per diluted common share, for the three months ended March 31, 2024, a decrease of $2.2 million. The decrease in net income was attributable to a $2.6 million increase in non-interest expense and a $2.5 million increase in the provision for credit losses, partially offset by a $2.7 million increase to net interest income. The increase in non-interest expense was primarily driven by a $2.3 million increase to salaries and employee benefits mainly due to merit increases, higher incentive compensation, and higher health insurance costs. The increase in the provision for credit losses is mainly due to growth in the loan and lease portfolio and a larger allowance for government guaranteed loans based on changes in loss rates. The increase in net interest income was primarily driven by lower interest expense on deposits and other borrowings.

Current wording

We reported consolidated net income of $58.3 million for the six months ended June 30, 2025 compared to net income of $60.1 million for the six months ended June 30, 2024, a decrease of $1.8 million. The decrease in net income was primarily attributable to a $9.0 million increase in non-interest expense and an increase of $8.4 million in provision for credit losses, offset by a $12.1 million increase in net interest income and a $2.5 million decrease in the provision for income taxes. Net income was $1.31 per basic and $1.30 per diluted common share for the six months ended June 30, 2025, compared to $1.39 per basic and $1.37 per diluted common share for the six months ended June 30, 2024.

Previous wording

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.

Current wording

Net interest income, representing interest income less interest expense, is a significant contributor to our revenues and earnings. We generate interest income from interest and dividends on interest-earning assets, which include loans, leases and investment securities we own. We incur interest expense from interest paid on interest-bearing liabilities, which include interest-bearing deposits, subordinated debt, Federal Home Loan Bank ("FHLB") advances, junior subordinated debentures and other borrowings. To evaluate net interest income, we measure and monitor (i) yields on our loans and other interest-earning assets, (ii) the costs of our deposits and other funding sources, (iii) our net interest spread, and (iv) our net interest margin. Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest margin is calculated as the annualized net interest income divided by average interest-earning assets. Because non-interest-bearing sources of funds, such as non-interest-bearing deposits and stockholders’ equity, also fund interest-earning assets, net interest margin includes the benefit of these non-interest-bearing sources.

Previous wording

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 March 31, 2025, purchased credit deteriorated loans accounted for under ASC Topic 326 represented 1.7% of our total loan and lease portfolio compared to 1.8% at December 31, 2024.

Current wording

We also recognize income from the accretable discounts associated with the purchase of interest-earning assets. Because of our recapitalization and acquisitions, we derive a portion of our interest income from the accretable discounts on purchase credit deteriorated and acquired non-credit-deteriorated loans. The accretion is generally recognized over the life of the loan. This accretion will continue to have an impact on our net interest income as long as loans acquired with a discount at acquisition represent a meaningful portion of our interest-earning assets. As of June 30, 2025 and December 31, 2024, purchased credit deteriorated loans accounted for under ASC Topic 326 represented 1.8% of our total loan and lease portfolio.

Previous wording

Loan and lease balances are net of deferred origination fees and costs and initial direct costs. Non-accrual loans and leases are included in total loan and lease balances.

Current wording

Loan and lease balances are net of deferred origination fees and costs and initial direct costs. Fees included in loan and lease interest income were $2.3 million for each of the three months ended June 2025 and 2024, respectively. Non-accrual loans and leases are included in total loan and lease balances.

Previous wording

Net interest income for the three months ended March 31, 2025 was $88.2 million compared to $85.5 million during the same period in 2024, an increase of $2.7 million, or 3.1%. Interest income decreased $3.5 million for the three months ended March 31, 2025 compared to the same period in 2024 primarily as a result of lower yields on loans and leases. Interest expense decreased by $6.1 million for the three months ended March 31, 2025 compared to the same period in 2024 mainly due lower rates paid on interest-bearing deposits.

Current wording

Net interest income for the six months ended June 30, 2025 was $184.2 million compared to $172.1 million during the same period in 2024, an increase of $12.1 million, or 7.0%. Interest income decreased $513,000 for the six months ended June 30, 2025 compared to the same period in 2024 primarily as a result of lower yields on loans and leases, offset by growth in the loan and lease portfolio. Interest expense decreased by $12.6 million for the six months ended June 30, 2025 compared to the same period in 2024 mostly due lower rates paid on interest-bearing deposits and change in deposit mix.

Previous wording

The net interest margin for the three months ended March 31, 2025 was 4.07%, an increase of seven basis points compared to 4.00% for the three months ended March 31, 2024. The increase was primarily attributable to lower rates paid on deposits.

Current wording

The net interest margin for the three months ended June 30, 2025 was 4.18%, an increase of 20 basis points compared to 3.98% for the three months ended June 30, 2024. The increase was primarily attributable to lower rates paid on deposits. The net interest margin for the six months ended June 30, 2025 was 4.13%, an increase of 14 basis points compared to 3.99% for the six months ended June 30, 2024. The increase was primarily attributable to lower rates paid on deposits.

Previous wording

Net loan accretion income was $2.6 million for the three months ended March 31, 2025 compared to $4.3 million for the three months ended March 31, 2024, a decrease of $1.7 million due to lower accretion on acquired loans. Total net loan accretion on acquired loans contributed 12 basis points to the net interest margin for the three months ended March 31, 2025 compared to 20 basis points for the three months ended March 31, 2024. Projected accretion income as of March 31, 2025 is summarized as follows:

Current wording

Net loan accretion income was $3.0 million for the three months ended June 30, 2025 compared to $3.7 million for the three months ended June 30, 2024, a decrease of $678,000 mainly due to acquired loans converting to originated. Total net loan accretion on acquired loans contributed 13 basis points to the net interest margin for the three months ended June 30, 2025 compared to 17 basis points for the three months ended June 30, 2024.

Previous wording

The provision for credit losses was $9.2 million for the three months ended March 31, 2025, compared to $6.6 million for the three months ended March 31, 2024, an increase of $2.5 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 $9.1 million for the three months ended March 31, 2025, compared to $6.9 million for the three months ended March 31, 2024, an increase of $2.2 million. The increase in provision for credit losses - loans and leases was driven by growth in the loan and lease portfolio and a larger allocation for collectively assessed government guaranteed loans based on changes in loss rates. The provision for credit losses - unfunded commitments was $103,000 for the three months ended March 31, 2025 and a recapture of $248,000 for the three months ended March 31, 2024.

Current wording

The provision for credit losses was $11.9 million for the three months ended June 30, 2025, compared to $6.0 million for the three months ended June 30, 2024, an increase of $5.9 million and is comprised of a provision for credit losses - loans and leases and a provision for credit losses - unfunded commitments. Provision for credit losses - loans and leases was $11.8 million for the three months ended June 30, 2025, and $6.9 million for the three months ended June 30, 2024, an increase of $4.9 million. On April 1, 2025, a provision for credit losses of $864,000 was recorded on acquired non-credit-deteriorated loans related to the First Security acquisition. The provision for credit losses - unfunded commitments was a provision of $166,000 and a recapture of $833,000 for the three months ended June 30, 2025 and 2024, respectively.

Previous wording

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 $2.7 million and $2.4 million for the three months ended March 31, 2025 and 2024, respectively. The increase is primarily due to growth in deposits and increased fees.

Current wording

Fees and service charges on deposits represent amounts charged to customers for banking services, such as fees on deposit accounts, and include, but are not limited to, maintenance fees, insufficient fund fees, overdraft protection fees, wire transfer fees, and other charges. Fees and service charges on deposits were $2.6 million and $2.5 million for the three months ended June 30, 2025 and 2024, respectively. Fees and service charges on deposits were $5.3 million and $5.0 million for the six months ended June 30, 2025 and 2024, respectively. The increases were primarily due to increases in deposit balances.

Previous wording

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 $3.0 million and $3.4 million in loan servicing revenue on the sold portion of the U.S. government guaranteed loans for the three months ended March 31, 2025 and 2024, respectively, a decrease of $321,0000 or 9.5%. The decrease in loan servicing revenue was primarily driven by a decrease in loans serviced compared to March 31, 2024 and one less day during the quarter. At March 31, 2025 and 2024, the outstanding balance of guaranteed loans serviced was $1.7 billion.

Current wording

While portions of the loans that we originate are sold and generate gains on sale revenue, servicing rights for the majority of loans that we sell are retained by us. In exchange for continuing to service loans that have been sold, we receive servicing revenue from a portion of the interest cash flow of the loan. We generated $3.1 million and $3.2 million in loan servicing revenue on the sold portion of the U.S. government guaranteed loans for the three months ended June 30, 2025 and 2024, respectively. We generated $6.1 million and $6.6 million in loan servicing revenue on the sold portion of the U.S. government guaranteed loans for the six months ended June 30, 2025 and 2024, respectively. At June 30, 2025 and 2024, the outstanding balance of guaranteed loans serviced was $1.7 billion.

Previous wording

Loan servicing asset revaluation represents net changes in the fair value of our servicing assets. Loan servicing asset revaluation had a downward adjustment of $1.1 million and $703,000 for the three months ended March 31, 2025 and 2024, respectively, a change of $348,000. Changes in the revaluation were mainly due to higher prepayments.

Current wording

Loan servicing asset revaluation represents net changes in the fair value of our servicing assets. Loan servicing asset revaluation had a downward adjustment of $2.1 million and $2.5 million for the three months ended June 30, 2025 and 2024, respectively, a change of $318,000. Change in the quarterly revaluation was mainly due to a changes in prepayment speeds. Loan servicing asset revaluation had a downward adjustment of $3.2 million for both the six months ended June 30, 2025 and 2024, a change of $30,000.

Previous wording

Net gains on sales of loans were $4.9 million for the three months ended March 31, 2025 compared to $5.5 million for the three months ended March 31, 2024, a decrease of $595,000, or 10.8%, driven mainly by lower volume of sales and higher deferred costs. We sold $70.2 million of U.S. government guaranteed loans during the three months ended March 31, 2025 compared to $72.5 million during the three months ended March 31, 2024.

Current wording

Net gains on sales of loans were $5.4 million for the three months ended June 30, 2025 compared to $6.0 million for the three months ended June 30, 2024, a decrease of $622,000 or 10.3%, driven mainly by lower premiums. We sold $73.0 million of U.S. government guaranteed loans during the three months ended June 30, 2025 compared to $72.5 million during the three months ended June 30, 2024. Net gains on sales of loans were $10.4 million for the six months ended June 30, 2025 compared to $11.6 million for the six months ended June 30, 2024, a decrease of $1.2 million or 10.5%, driven by a lower volume of loans sold. We sold $143.2 million of U.S. government guaranteed loans during the six months ended June 30, 2025 compared to $146.4 million during the six months ended June 30, 2024.

Previous wording

Wealth management and trust income represents fees charged to customers for investment, trust, or wealth management services and are primarily determined by total assets under administration. Wealth management and trust income was $1.1 million for the three months ended March 31, 2025 compared to $1.2 million for the three months ended March 31, 2024, a decrease of $75,000 or 6.4%. Assets under administration were $741.8 million and $654.1 million as of March 31, 2025 and 2024, respectively.

Current wording

Wealth management and trust income represents fees charged to customers for investment, trust, or wealth management services and are primarily determined by total assets under administration. Wealth management and trust income was $1.1 million for the three months ended June 30, 2025 compared to $942,000 for the three months ended June 30, 2024, an increase of $132,000 or 14.0%. Wealth management and trust income was $2.2 million for the six months ended June 30, 2025 compared to $2.1 million for the six months ended June 30, 2024, an increase of $57,000 or 2.7%. The increases were primarily driven by higher fees from higher asset managed balances. Assets under administration were $783.1 million and $665.7 million as of June 30, 2025 and 2024, respectively.

Previous wording

The following table presents the major components of non-interest expense for the periods presented (dollars in thousands):

Current wording

The following table presents the major components of non-interest expense for periods presented (dollars in thousands):

Previous wording

Legal, audit, and other professional fees were $3.3 million for the three months ended March 31, 2025 compared to $2.7 million for the three months ended March 31, 2024, an increase of $532,000 , or 19.6%. The increase was principally driven by merger-related legal expenses incurred in the first quarter of 2025 and increased audit and other professional fees.

Current wording

Legal, audit, and other professional fees were $4.8 million for the three months ended June 30, 2025 compared to $3.7 million for the three months ended June 30, 2024, an increase of $1.1 million or 30.6%. Legal, audit, and other professional fees were $8.1 million for the six months ended June 30, 2025 compared to $6.4 million for the six months ended June 30, 2024, an increase of $1.7 million or 25.9%. The increases were principally driven by merger-related expenses and fees and expenses related to the secondary public offering of our common stock.

Previous wording

Our efficiency ratio was 53.66% for the three months ended March 31, 2025 compared to 51.94% for the three months ended March 31, 2024. The change in our efficiency ratio for the three months ended March 31, 2025 was driven by increased non-interest expense. Our adjusted efficiency ratio was 53.04% for the three months ended March 31, 2025 compared to 51.75% for the three months ended March 31, 2024.

Current wording

Our efficiency ratio was 52.61% for the three months ended June 30, 2025 compared to 52.19% for the three months ended June 30, 2024. The change in our efficiency ratio for the three months ended June 30, 2025 was driven by the increase in non-interest expense. Our adjusted efficiency ratio was 48.20% for the three months ended June 30, 2025 compared to 52.19% for the three months ended June 30, 2024. Our efficiency ratio was 53.11% for the six months ended June 30, 2025, compared to 52.06% for the six months ended June 30, 2024. The change in our efficiency ratio was due to higher non-interest expense. Our adjusted efficiency ratio was 50.54% for the six months ended June 30, 2025, compared to 51.97% for the six months ended June 30, 2024.

Previous wording

Our provision for income taxes for the three months ended March 31, 2025 totaled $9.2 million compared to $10.1 million for the three months ended March 31, 2024, a decrease of $898,000, or 8.9%. The decrease in income tax expense was principally due to a decrease in net income before provision for income taxes. Our effective tax rate was 24.6% for the three months ended March 31, 2025 and 25.0% for the three months ended March 31, 2024.

Current wording

Our provision for income taxes for the six months ended June 30, 2025 totaled $18.1 million compared to $20.6 million for the six months ended June 30, 2024, a decrease of $2.5 million or 12.1%. The decrease in income tax expense was principally due to a decrease in net income before provision for income taxes. Our effective tax rate was 23.7% for the six months ended June 30, 2025 and 25.5% for the six months ended June 30, 2024.

Previous wording

Our total assets increased by $88.2 million, or 0.9%, to $9.6 billion at March 31, 2025 compared to $9.5 billion at December 31, 2024. The increase in total assets was primarily due to an increase of $137.1 million in total loans and leases and loans held for sale, or 2.0%, from $6.9 billion at December 31, 2024 to $7.0 billion at March 31, 2025, and an increase in securities available-for-sale of $122.4 million, or 8.6% from $1.4 billion at December 31, 2024 to $1.5 billion as March 31, 2025. Our originated loan and lease portfolio increased by $161.4 million and our purchased credit deteriorated loans and acquired non-credit-deteriorated loans and leases portfolio decreased by $42.4 million. The increase in our originated portfolio was primarily attributed to growth in the commercial and industrial portfolio. The decrease in our purchased credit deteriorated loans and acquired non-credit-deteriorated loans and leases portfolio was attributed to decreases in commercial and residential real estate resulting mainly from renewals and resolutions.

Current wording

Our total assets increased by $223.7 million, or 2.4%, to $9.7 billion at June 30, 2025 compared to $9.5 billion at December 31, 2024. The increase in total assets was primarily due to an increase of $421.2 million in loans and leases, or 6.1%, from $6.9 billion at December 31, 2024 to $7.3 billion at June 30, 2025, and an increase in securities available for sale of $159.5 million, or 11.3%. Our originated loan and lease portfolio increased by $362.2 million and our purchased credit deteriorated loans and acquired non-credit-deteriorated loans and leases portfolio increased by $59.0 million. The increase in our originated portfolio was primarily attributed to the growth in the commercial and industrial and commercial real estate portfolios. The increase in our purchased credit deteriorated loans and acquired non-credit-deteriorated loans and leases portfolio was attributed to the First Security acquisition.

Previous wording

Total liabilities increased by $48.6 million, or 0.6%, to $8.5 billion at March 31, 2025 compared to $8.4 billion at December 31, 2024. Total deposits increased by $94.7 million, or 1.3%, driven by growth in money market accounts, offset by a decrease in time deposits. Other borrowings decreased by $40.5 million, or 6.5%, mainly due to lower FHLB advances and repayment of the term loan.

Current wording

Total liabilities increased by $122.8 million, or 1.5%, to $8.5 billion at June 30, 2025 compared to $8.4 billion at December 31, 2024. Total deposits increased by $351.9 million, or 4.7%, driven by the First Security acquisition, and growth in money market accounts, offset by decreases to time deposits. Other borrowings decreased by $204.7 million, or 33.1%, mainly due to decreased FHLB advances.

Previous wording

Securities available-for-sale increased by $122.4 million, or 8.6%, from $1.4 billion at December 31, 2024 to $1.5 billion at March 31, 2025. The increase was mainly attributed to purchases of securities, net of maturities, calls, and repayments.

Current wording

Securities available-for-sale increased by $159.5 million, or 11.3%, from $1.4 billion at December 31, 2024 to $1.6 billion at June 30, 2025. The increase was primarily attributed to the First Security acquisition, increases in fair value, and purchases of securities.

Previous wording

During the quarter ended March 31, 2025, our last remaining held-to-maturity security, which was carried at amortized cost, matured.

Current wording

During the six months ended June 30, 2025, our last remaining held-to-maturity security, which was carried at amortized cost, matured. Securities held-to-maturity were $605,000 at December 31, 2024.

Previous wording

Certain securities have fair values less than amortized cost and, therefore, contain unrealized losses. At March 31, 2025, we evaluated the securities that had an unrealized loss for credit losses and determined there were none. There were 305 investment securities with unrealized losses at March 31, 2025. We anticipate full recovery of amortized cost with respect to these securities by maturity, or sooner in the event of a more favorable market interest rate environment. We do not intend to sell these securities and it is not more likely than not that we will be required to sell them before recovery of their amortized cost basis, which may be at maturity.

Current wording

Certain securities in unrealized loss positions have fair values less than amortized cost and, therefore, contain unrealized losses. At June 30, 2025, we evaluated the securities that had an unrealized loss for credit losses and determined there were none. There were 298 investment securities with unrealized losses at June 30, 2025. We anticipate full recovery of amortized cost with respect to these securities by maturity, or sooner in the event of a more favorable market interest rate environment. We do not intend to sell these securities and it is not more likely than not that we will be required to sell them before recovery of their amortized cost basis, which may be at maturity.

Previous wording

Total non-taxable securities classified as obligations of states, municipalities and political subdivisions were $53.4 million at March 31, 2025, a decrease of $105,000 from December 31, 2024.

Current wording

Total non-taxable securities classified as obligations of states, municipalities and political subdivisions were $53.5 million at June 30, 2025, a decrease of $85,000 from December 31, 2024.

Previous wording

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 March 31, 2025 and December 31, 2024, we held $26.3 million and $27.5 million, respectively, in FHLB and Bankers’ Bank stock. We evaluate impairment of our investment in FHLB and Bankers’ Bank based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. We did not identify any indicators of impairment of FHLB and Bankers’ Bank stock as of March 31, 2025 and December 31, 2024.

Current wording

As a member of the FHLB system, Byline Bank is required to maintain an investment in the capital stock of the FHLB. No market exists for this stock, and it has no quoted market value. The stock is redeemable at par by the FHLB and is, therefore, carried at cost. In addition, Byline Bank owns stock of Bankers’ Bank that was acquired as part of a bank acquisition. The stock is redeemable at par and carried at cost. As of June 30, 2025 and December 31, 2024, we held $18.6 million and $27.5 million, respectively, in FHLB and Bankers’ Bank stock. We evaluate impairment of our investment in FHLB and Bankers’ Bank based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. We did not identify any indicators of impairment of FHLB and Bankers’ Bank stock as of June 30, 2025 and December 31, 2024.

Previous wording

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 March 31, 2025 and December 31, 2024 were $7.0 billion and $6.9 billion, respectively, an increase of $119.0 million, or 1.7%. Originated loans and leases were $6.4 billion at March 31, 2025, an increase of $161.4 million, or 2.6%, compared to $6.2 billion at December 31, 2024. Purchased credit deteriorated loans and acquired non-credit-deteriorated loans and leases were $620.7 million at March 31, 2025, a decrease of $42.4 million, or 6.4%, compared to $663.0 million at December 31, 2024. The increase in our originated portfolio was primarily attributed to organic loan and lease growth, and renewals of acquired loans and leases that are now reflected in originated loans. The decrease in the purchased credit deteriorated and acquired non-credit-deteriorated loan and lease portfolio was driven mainly by renewals of acquired loans and leases as well as resolutions.

Current wording

Lending-related income is the most important component of our net interest income and is the main driver of the results of our operations. Total loans and leases at June 30, 2025 and December 31, 2024 were $7.3 billion and $6.9 billion, respectively, an increase of $421.2 million, or 6.1%. Originated loans and leases were $6.6 billion at June 30, 2025, an increase of $362.2 million, or 5.8%, compared to $6.2 billion at December 31, 2024. Purchased credit deteriorated loans and acquired non-credit-deteriorated loans and leases were $722.0 million at June 30, 2025, an increase of $59.0 million, or 8.9%, compared to $663.0 million at December 31, 2024. The increase in our originated portfolio was primarily attributed to organic loan and lease growth, and renewals of acquired loans and leases that are now reflected with originated loans. The increase in the purchased credit deteriorated and acquired non-credit-deteriorated loan and lease portfolio was driven by the First Security acquisition.

Previous wording

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 March 31, 2025, the loan portfolio included $431.7 million of unguaranteed 7(a) SBA and USDA loans with exposure to the following top three industries: 19.9% retail trade, 13.6% accommodation and food services, and 9.3% 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):

Current wording

We strive to maintain a relatively diversified loan portfolio to help reduce the risk inherent in concentration in certain types of collateral. Loans, excluding leases, are typically made to real estate, manufacturing, wholesale, retail and service businesses for working capital needs, business expansions and operations. As of June 30, 2025, the loan portfolio included $425.1 million of unguaranteed 7(a) SBA and USDA loans with exposure to the following top three industries: 20.5% retail trade, 13.2% accommodation and food services, and 8.9% manufacturing. The following table shows our allocation of originated, purchase credit deteriorated and acquired non-credit-deteriorated loans and leases as of the dates presented (dollars in thousands):

Previous wording

Loans collateralized by real estate include: commercial real estate, residential real estate, and construction, land development, and other land. In the aggregate, loans collateralized by real estate comprised 51.0% and 51.6% of the total loan and lease portfolio at March 31, 2025 and December 31, 2024, respectively.

Current wording

Loans collateralized by real estate include: commercial real estate, residential real estate, and construction, land development, and other land. In the aggregate, loans collateralized by real estate comprised 50.6% and 51.6% of the total loan and lease portfolio at June 30, 2025 and December 31, 2024, respectively.

Previous wording

Commercial Real Estate Loans. Commercial real estate loans, including owner occupied and non-owner occupied, comprised the largest portion of the real estate loan portfolio as of March 31, 2025 and totaled $2.4 billion, or 66.2% of real estate loans and 33.8% of the total loan and lease portfolio. At December 31, 2024, commercial real estate loans totaled $2.4 billion, or 66.0% of real estate loans and 34.1% of the total loan and lease portfolio. Purchased credit deteriorated commercial real estate loans decreased from $82.9 million as of December 31, 2024 to $78.4 million as of March 31, 2025, as a result of the migration of renewed loans to originated, paydowns, and resolutions.

Current wording

Commercial Real Estate Loans. Commercial real estate ("CRE") loans comprised the largest portion of the real estate loan portfolio as of June 30, 2025 and December 31, 2024 and totaled $2.5 billion, or 67.3% of real estate loans and 34.0% of the total loan and lease portfolio at June 30, 2025. At December 31, 2024, commercial real estate loans totaled $2.4 billion and comprised 66.0% of real estate loans and 34.1% of the total loan and lease portfolio. Purchased credit deteriorated commercial real estate loans increased from $82.9 million as of December 31, 2024 to $84.7 million as of June 30, 2025, an increase of $1.8 million, or 2.2%.

Previous wording

The composition of the CRE loan portfolio remained stable at March 31, 2025 compared to December 31, 2024. Industrial/warehouse, retail/restaurant, and office remain the top three collateral types in the CRE portfolio, and represented 25.6% of total loans and leases held for investment at March 31, 2025 compared to 26.8% at December 31, 2024. CRE office represents 10.4% of our total CRE portfolio as of March 31, 2025, compared to 10.5% as of December 31, 2024. Geographically, CRE loans in Illinois decreased to 22.9% of total loans and leases held for investment and represented 68.1% of total CRE loans at March 31, 2025, compared to 23.1% of total loans and leases held for investment and 67.8% of total CRE loans at December 31, 2024. CRE loans outside of Illinois comprised 10.7% of total loans and leases held for investment as of March 31, 2025, compared to 10.9% as of December 31, 2024.

Current wording

The composition of the commercial real estate loan portfolio remained stable at June 30, 2025 compared to December 31, 2024. Industrial/warehouse, retail/restaurant, and office remain the top three collateral types in the CRE portfolio, and represented 25.8% of total loans and leases held for investment at June 30, 2025 compared to 26.8% at December 31, 2024. CRE office represents 10.4% of our total CRE portfolio as of June 30, 2025, compared to 10.5% as of December 31, 2024. Geographically, CRE loans in Illinois increased to 23.4% of total loans and leases held for investment and represented 68.7% of total CRE loans at June 30, 2025, compared to 23.1% of total loans and leases held for investment and 67.8% of total CRE loans at December 31, 2024. CRE loans outside of Illinois comprised 10.6% of total loans and leases held for investment as of June 30, 2025, compared to 10.8% as of December 31, 2024.

Previous wording

Owner occupied CRE loans were $1.4 billion, or 19.8% of our loan and lease portfolio at March 31, 2025, compared to $1.4 billion, or 20.0% of our loan and lease portfolio at December 31, 2024, an increase of $14.7 million, or 1.1%. Non-owner occupied CRE loans were $978.1 million, or 13.9% of our loan and lease portfolio at March 31, 2025, compared to $975.6 million, or 14.1% of our loan and lease portfolio at December 31, 2024, an increase of $2.5 million, or 0.3%. Non-owner occupied CRE loans were 81.2% and 82.6% of Byline Bank total capital, at March 31, 2025 and December 31, 2024, respectively.

Current wording

Owner occupied CRE loans were $1.4 billion, or 19.7% of our loan and lease portfolio at June 30, 2025, compared to $1.4 billion, or 20.0% of our loan and lease portfolio at December 31, 2024, an increase of $62.2 million, or 4.5%. Non-owner occupied CRE loans were $1.1 billion , or 14.4% of our loan and lease portfolio at June 30, 2025, compared to $975.6 million, or 14.1% of our loan and lease portfolio at December 31, 2024, an increase of $76.8 million, or 7.9%. Non-owner occupied CRE loans were 84.0% and 82.6% of Byline Bank total capital, at June 30, 2025 and December 31, 2024, respectively.

Previous wording

At March 31, 2025 and December 31, 2024, CRE loan concentration, as defined in the Federal Register to include owner-occupied and non-owner occupied CRE loans, construction land development and other land loans, multifamily property loans, and loans to finance CRE, construction and land development activities (that are not secured by real estate), as a percentage of Byline Bank total capital were 275.1% and 278.2%, respectively. We have not experienced portfolio concentration shift during the three months ended March 31, 2025, nor have we changed our CRE underwriting standards.

Current wording

At June 30, 2025 and December 31, 2024, CRE loan concentration, as defined in the Federal Register to include owner-occupied and non-owner occupied CRE loans, construction land development and other land loans, multifamily property loans, and loans to finance CRE, construction and land development activities (that are not secured by real estate), as a percentage of Byline Bank total capital were 274.1% and 278.2%, respectively. We have not experienced portfolio concentration shift during the six months ended June 30, 2025, nor have we changed our CRE underwriting standards.