BY 10-K & 10-Q changes, risk factors and insider trading

As of December 31, 2024,2025, we had $1.8 billion of non-interest-bearing demand deposits and $767.8$878.6 million of interest-bearing checkingdemand accounts.deposits. AsThe Federal Reserve lowered interest rates by an aggregate of 75 basis points during 2025. To date in 2026, however, the Federal Reserve has moderatedindicated thethat declineit may moderate its approach to further reductions of the overnight target rate,rate in response to evolving economic and market data. Accordingly, we continue to cautiously manage our deposit repricingpricing strategies to seek to maintain our net interest margin. As the competition for funding among banks remains high, and customers continue to seek higher yields, we have adjusted our deposit pricing accordingly. To the extent we offer higher interest rates on targeted interest-bearing deposit products to maintain current customers or attract new customers, our interest expense may increase, perhaps materially. Furthermore, if we fail to offer interest rates at a sufficient level to keep these demand deposits, our core deposits may be reduced, which would require us to obtain funding in other ways or risk slowing our future asset growth.

We are also subject to the risk that our rights against third parties may not be enforceable in all circumstances. Deterioration in the credit quality of third parties whose securities or obligations we hold, including the Federal Home Loan Mortgage Corporation, Federal National Mortgage Corporation, Government National Mortgage Association and municipalities, could result in significant losses.

Other primary sources of funds consist of cash from operations and investment maturities, redemptions,redemptions and sales, as well as borrowings from the Federal Reserve Bank of Chicago, the FHLBFederal Home Loan Bank and other third-party lenders from time to time. Our access to funding sources in amounts adequate to finance or capitalize our activities or on terms that are acceptable to us could be impaired by factors that affect us directly or the financial services industry or economy in general,generally, such as disruptions in the financial markets or negative views and expectations about the prospects for the financial services industry.

We are a legal entity separate and distinct from Byline Bank, our wholly-owned banking subsidiary. A substantial portion of our cash flow from operating activities,activities comes primarily from dividends we receive from Byline Bank. Various federal and state laws and regulations limit the amount of dividends that theByline bankBank may pay to us. As of December 31, 2024,2025, Byline Bank had the capacity to pay us dividends of up to $270.0$241.0 million without the need to obtain prior regulatory approval. In the event Byline Bank is unable to pay dividends to us, we may not be able to service our existing debt or any debt we may incur, pay obligations or pay dividends on our common stock, which could have a material adverse effect on our business, financial condition or results of operations.

New lines of business, products, product enhancements or services and technologies may subject us to additional risks.

From time to time, we may implement new lines of business or offer new products and product enhancements as well as new services within our existing lines of business. We may also implement new technologies, such as those related to artificial intelligence ("AI"), automation and algorithms, in order to create efficiencies, access and use data and enhance our customers’ engagement with us. There are substantial risks and uncertainties associated with these efforts, particularly in instances in which the markets are not fully developed. Also, the implementation of certain new technologies may have unintended consequences due to their limitations, potential manipulation, or our failure to use them effectively. In implementing, developing, or marketing new lines of business, products, product enhancements or services,services and/or technologies, we may invest significant time and resources and not realize their expected results or returns. Further, initial timetables for the introduction and development of new lines of business, products, product enhancements or servicesinitiatives may not be achieved, and price and profitability targets may not prove feasible. External factors, such as compliance with regulations, competitive alternatives andalternatives, shifting market preferences,preferences and general economic conditions, may also affect the ultimate implementation of a new line of business or offerings of new products, product enhancements or services.services and/or technologies. Furthermore, any newsuch line of business, product, product enhancement or service or system conversioninitiative could have a significant impact on the effectiveness of our system of internal controls. Failure to successfully manage these risks in the development and implementation of new lines of business or offerings of new products, product enhancements or services and/or technologies could have a material adverse effect on our business, financial condition, or results of operations.

Our financial performance generally, and in particular the ability of our borrowers to pay interest on and repay principal of outstanding loans and leases and the value of collateral securing those loans and leases, as well as demand for loans and leases and other products and services we offer, is highly dependent upon the business environment in the markets in which we operate and in the United States as a whole. Unlike larger banks that are more geographically diversified, we provide banking and financial services to customers primarily in the Chicago metropolitan area. The economic conditions in this local market may be different from, or worse than, the economic conditions in the United States as a whole. Some elements of the business environment that affect our financial performance include short-term and long-term interest rates, the prevailing yield curve, inflation and price levels, tax policy, monetary policy, unemployment, real estate prices and development, and the strength of the domestic economy and the local economy in the markets in which we operate. Also, the occurrence of other external events, such as geopolitical events and widespread public health emergencies or pandemics may negatively affect the business environment in our markets. Unfavorable market conditions can result in a deterioration in the credit quality of our borrowers and the demand for our products and services, an increase in the number of loan and lease delinquencies, defaults and charge-offs, additional provisions for credit losses and an overall material adverse effect on the quality of our loan and lease portfolio. Unfavorable or uncertain economic and market conditions can be caused by, among other factors, declines in economic growth, business activity or investor or business confidence; limitations on the availability or increases in the cost of credit and capital; changes in inflation or interest rates; increases in real estate and other state and local taxes; high unemployment; population migration; natural disasters; geopolitical issues, conflicts and uncertainty; public health concerns; and other external factors or a combination of these or other factors.

Many of the loans in our portfolio are secured by real estate. As of December 31, 2024,2025, our real estate loans held for investment include $489.3$408.1 million of construction and development loans, $429.9$476.1 million of multifamily loans, $975.6$1.1 millionbillion of non-owner occupied CRE loans and $296.2$281.3 million of residential mortgage loans, with the majority of these real estate loans concentrated in the Chicago metropolitan area and the State of Illinois. Real property values in our primary market may differ from real property values in other markets where we may do business and may be affected by a variety of factors outside of our control and the control of our borrowers, including national and local economic conditions, generally. The Chicago metropolitan area has experienced volatility in real estate values over the past decade. Declines in real estate values, including prices for homes and commercial properties in the Chicago metropolitan area, could result in a deterioration of the credit quality of our borrowers, an increase in the number of loan delinquencies, defaults and charge-offs, and reduced demand for our products and services, generally. In addition, our appraisal of the property may change significantly in relatively short periods of time and may not accurately describe the fair value of the real property collateral after the loan is made, resulting in loss if we foreclose on the property prior to realizing the full amount of any remaining indebtedness. Our CRE loans may have a greater risk of loss than residential mortgage loans, in part because these loans are generally larger or more complex to underwrite. In particular, real estate construction and acquisition and development loans have certain risks not present in other types of loans, including risks associated with construction cost overruns, project completion risk, general contractor credit risk and risks associated with the ultimate sale or use of the completed construction. In addition, declines in real property values could reduce the value of any collateral we realize following a default on these loans. An increase in the level of non-performing assets increases our risk profile and may affect the capital levels regulators believe are appropriate in light of the ensuing risk profile. In addition, we rely on appraisals and other valuation techniques to establish the value of our other real estate owned ("OREO") and personal property that we acquire through foreclosure proceedings and to determine certain loan impairments. If any of these valuations are inaccurate, our consolidated financial statements may not reflect the correct value of our OREO, and our allowance for credit losses - loans and leases may not reflect accurate loan impairments. This could have a material adverse effect on our business, financial condition or results of operations. Our failure to effectively mitigate these risks could have a material adverse effect on our business, financial condition, or results of operations.

Our business is highly dependent on the successful and uninterrupted functioning of our information technology and telecommunications systems, third-party servicers, accounting systems, mobile and online banking platforms and financial intermediaries. We outsource to third parties many of our major systems, such as data processing, loan servicing, deposit processing, and internal audit systems. The failure of these systems, or the termination of a third-party software license or service agreement on which any of these systems is based, could interrupt our operations. Because our information technology and telecommunications systems interface with and depend on third-party systems, we could experience service denials if demand for such services exceeds capacity, or such third-party systems fail or experience interruptions. If sustained or repeated, a system failure or service denial could result in a deterioration of our ability to operate effectively or service our customers, resulting in potential noncompliance with applicable laws or regulations, loss of customer business, and/or subject us to additional regulatory scrutiny and possible financial liability, any of which could have a material adverse effect on our financial condition. In addition, failureFailure of third parties to comply with applicable laws and regulations, or fraud or misconduct on the part of employees of any of these third parties, could disrupt our operations or adversely affect our reputation.

As a financial institution, we are susceptible to fraudulent activity, information security breaches, and cybersecurity-related incidents that may be committed against us, our customers, or third-party service providers that we utilize, which may result in financial losses or increased costs to us or our customers, disclosure or misuse of our information or our customer information, misappropriation of assets, privacy breaches against our customers, litigation, or damage to our reputation. Information security breaches and cybersecurity-related incidents may include fraudulent or unauthorized access to systems used by us or our customers, denial or degradation of service attacks, and malware or other cyberattacks. There continues to be a rise in electronic fraudulent activity, security breaches, and cyberattacks directed at the financial services industry. Consistent with industry trends, we have also experienced an increase in attempted electronic fraudulent activity, security breaches, and cybersecurity-related incidents. The continued evolution and increased usage of AI technologies may further increase these risks. Information pertaining to us and our customers is maintained, and transactions are executed, on networks and systems maintained by us and certain third-party partners, such as our online banking or reporting systems. The secure maintenance and transmission of confidential information, as well as execution of transactions over these systems, are essential to protect us and our customers against fraud and security breaches and to maintain our customers’ confidence and privacy. Although we have developed, and continue to invest in, systems and processes that are designed to detect and prevent security breaches and cyberattacks and periodically test our security, our or our third-party partners’ inability to anticipate, or failure to adequately mitigate, breaches of security could result in: losses to us or our customers; our loss of business and/or customers; damage to our reputation; the incurrence of additional expenses; disruption to our business; our inability to grow our online services or other businesses; additional regulatory scrutiny or penalties; or our exposure to civil litigation and possible financial liability-anyliability, any of which could have a material adverse effect on our business, financial condition, or results of operations.

The financial services industry is continually undergoing rapid technological change with frequent introductions of new, technology-driven products and services.services and an established and growing demand for mobile banking and payment systems and applications, necessary to allow companies to interact with customers and to review, analyze and use data. The effective use of technology increases efficiency and enables financial institutions to better serve customers and reduce costs. Our future success depends, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands, as well as to createcreating additional efficiencies in our operations. Many of our competitors have substantially greater resources to invest in technological improvements than we do. We may not be able to effectively implement new, technology-driven products and services, or be successful in marketing these products and services to our customers. In addition, the implementation of technological changes and upgrades to maintain current systems and integrate new ones may also cause service interruptions, transaction processing errors, and system conversion delays, and may cause us to fail to comply with applicable laws. Failure to successfully keep pace with technological change affecting the financial services industry and failure to avoid interruptions, errors, and delays could have a material adverse effect on our business, financial condition, or results of operations.

Our SBA lending program is dependent upon the U.S. federal government. As an approved participant in the SBA Preferred Lender’s Program (an "SBA Preferred Lender"), we enable our customers to obtain SBA loans without being subject to the potentially lengthy SBA approval process necessary for lenders that are not SBA Preferred Lenders. The SBA periodically reviews the lending operations of participating lenders to assess, among other things, whether the lender exhibits prudent risk management. When weaknesses are identified, the SBA may request corrective actions or impose enforcement actions, including revocation of the lender’s SBA Preferred Lender status. If we lose our status as an SBA Preferred Lender, we may lose some or all of our customers to lenders who are SBA Preferred Lenders, and as a result wewhich could experiencehave a material adverse effect toon our financial results. Any changes to the SBA program, changes to program-specific rules impacting volume eligibility under the guaranty program, as well as changes to the program amounts authorized by Congress, may also have a material adverse effect on our business. In addition, any default by the U.S. government on its obligations or any prolonged government shutdown could impede our ability to originate SBA loans or other government guaranteed loans or sell such loans in the secondary market, which could materially adversely affect our business, results of operations, and financial condition.

The laws, regulations and standard operating procedures that are applicable to government guaranteed loan products may change in the future, particularly in light of the changes being made and scrutiny being given to government funded programs under the newcurrent U.S. presidential administration. We cannot predict the effects of these changes on our business and profitability. Because government regulation greatly affects the business and financial results of all commercial banks and bank holding companies and especially our organization, changes in the laws, regulations and procedures applicable to government guaranteed loans could adversely affect our ability to operate profitably.

The recognition of gains on the sale of loans and servicing asset valuations reflectreflects certain assumptions.

We continue to expect that gains on the sale of U.S. government guaranteed loans will continue to comprise a significant component of our revenue. The gain on such sales recognized for the year ended December 31, 20242025 was $24.5$22.7 million. The determination of these gains is based on assumptions regarding the value of unguaranteed loans retained, servicing rights retained and deferred fees and costs, and net premiums paid by purchasers of the guaranteed portions of U.S. government guaranteed loans. The value of retained unguaranteed loans and servicing rights are determined based on market-derived factors such as prepayment rates, current market conditions and recent loan sales. Deferred fees and costs are determined using internal analysis of the cost to originate loans. Significant errors in assumptions used to compute gains on sale of loans or servicing asset valuations could result in material revenue misstatements, which may have a material adverse effect on our business, results of operations and profitability. In addition, while we believe these valuations reflect fair value and such valuations are subject to validation by an independent third-party, if such valuations are not reflective of fair market value, then our business, results of operations and financial condition may be materially and adversely affected.

Certain accounting policies and estimates are critical to presenting our financial condition and results of operations. They require management to make difficult, subjective or complex judgments about matters that are uncertain. Materially different amounts could be reported under different conditions or using different assumptions or estimates. These critical accounting policies and estimates include (i) determining the provision and allowance for credit losses, (ii) the valuation of intangible assets such as goodwill, servicing assets, core deposit intangibles, and customer relationship intangible, and (iii) the determination of fair value for financial instruments. Refer to Note 1 of the notes to our audited consolidated financial statements contained in Part II, Item 8 of this report for further information. Because of the uncertainty of estimates involved in these matters, we may be required to do one or more of the following: significantly increase the allowance for credit losses or sustain credit losses that are significantly higher than the reserve provided; reduce the carrying value of an asset measured at fair value; or significantly increase our accrued tax liability. Any of these could have a material adverse effect on our business, financial condition or results of operations. See Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations".

In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the FRB. An important function of the FRB is to regulate the money supply and credit conditions. Among the instruments used by the FRB to implement these objectives are open market purchases and sales of U.S. government securities, adjustments of the discount rate, and changes in banks’ reserve requirements against bank deposits. These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments, and deposits. Their use also affects interest rates charged on loans orand paid on deposits.

The monetary policies and regulations of the FRB have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future. The effectscurrent term of suchFRB policiesChair uponis scheduled to end in May 2026. Recently, the President made a nomination for the next Chair of the FRB. The extent to which the nomination and confirmation of the next Chair of the FRB may alter monetary policy decisions of the FRB, or the timing and magnitude of any changes to the federal funds rate, is uncertain, and the potential impact on our business, financial condition,condition andor results of operationsoperation cannot be predicted.

Litigation and regulatory actions, including possible enforcement actions, could subject us to significant fines, penalties, judgments, or other requirements resulting in increased expenses or restrictions on our business activities.business.

Our business is subject to increased litigation and regulatory risks as a result of a number of factors, including the highly regulated nature of the financial services industry and the focus of state and federal prosecutors on banks and the financial services industry generally. In the normal course of business, we have in the past and may in the future be named as a defendant in various legal actions, including arbitrations, class actions, and other litigation, arising in connection with our current and/or prior business activities. Legal actions could include claims for substantial compensatory or punitive damages or claims for indeterminate amounts of damages, resulting in increased expenses, diminished income, damage to our reputation, and could divert management attention from the operation of our business. In addition, while the arbitration provisions in certain of our customer agreements historically have limited our exposure to consumer class action litigation, there can be no assurance that we will be successful in enforcing our arbitration clause in the future. Further, we have in the past and may in the future be subject to consent orders with our regulators.

The USA PATRIOT Act of 2001 and the Bank Secrecy Act require financial institutions to design and implement programs to prevent financial institutions from being used for money laundering and terrorist activities. If such activities are detected, financial institutions are obligated to file suspicious activity reports with the Financial Crimes Enforcement Network of the U.S. Department of the Treasury. These rules require financial institutions to establish procedures for identifying and verifying the identity of customers seeking to open new financial accounts. Federal and state bank regulators also have focused on compliance with Bank Secrecy Act and anti-money laundering regulations. Failure to comply with these regulations could result in fines or sanctions, including restrictions on conductingpursuing acquisitions or establishing new branches. While we have developed policies and procedures designed to assist in compliance with these laws and regulations, these policies and procedures may not be effective in preventing violations of these laws and regulations. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us, which could have a material adverse effect on our business, financial condition or results of operations.

We anticipate that theThe current presidential administration mayhas seekindicated that it intends to continue to implement a regulatory reform agenda that may be significantly different from that of the previous administration impacting rulemaking, supervision, examination and enforcement priorities of the federal banking agencies. Changes in federal policy and at regulatory agencies are expected to occur over time through policy and personnel changes, which could lead to changes involving the level of oversight and focus on the financial services industry. The nature, timing and economic and political effects of potential changes to the current legal and regulatory framework affecting financial institutions remain highly uncertain. At this time, it is unclear what additional laws, regulations and policies may change and whether future changes or uncertainty surrounding future changes will adversely affect our operating environment and therefore our business, financial condition and results of operations.

Currently, our principal stockholder, MBG Investors I, L.P., owns approximately 26.6%26.1% of the outstanding shares of our common stock and its general partner is one of our directors. As a result, MBG Investors I, L.P. is able to influence matters requiring approval by our stockholders, including the election of directors and the approval of mergers or other extraordinary transactions. At times, MBG Investors I, L.P. may also have interests that differ from yours and may vote in a way with which you disagree, and which may be adverse to your interests. The concentration of ownership may also have the effect of delaying, preventing, or deterring a change of control of the Company, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a private sale of their shares of the Company, subject us to the influence of a presently unknown third-party and might ultimately affect the market price of our common stock.

Future sales of our common stock in the public market, including by our pre-IPO stockholders, could lower our stock price.

The following is a discussion and analysis of our financial condition and results of operations and should be read in conjunction with our financial statements and notes thereto included in Part II, Item 8 of this report. In addition to historical information, this discussion contains forward‑looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the sections entitled "Special Note Regarding Forward‑Looking Statements" and "Risk Factors". Byline assumes no obligation to update any of these forward‑looking statements.

Management’s discussion focuses on 2025 results compared to 2024. For a discussion of 2024 results compared to 2023. For a discussion of 2023 results compared to 2022,2023, refer to Part I, Item 7 of our 20232024 Annual Report filed on Form 10-K, which was filed with the SEC on MarchFebruary 4,28, 2024.2025.

DividendsWe declaredreported onconsolidated commonnet sharesincome wereof $15.9 million and $14.6$130.1 million for the yearsyear ended December 31, 20242025, andcompared 2023,to respectively.net Dividendsincome paidof on common shares were $15.8 million and $14.6$120.8 million for the yearsyear ended December 31, 20242024, an increase of $9.3 million, or 7.7%. The increase in net income was attributable to a $37.3 million increase in net interest income, and 2023,a respectively.$2.1 million increase in non-interest income, offset by a $18.1 million increase in non-interest expense, a $9.1 million increase in provision for credit losses, and a $2.9 million increase in provision for income taxes. For the years ended December 31, 20242025 and 2023,2024, netour income available to common stockholders was $120.8 million, or $2.78earnings per basic share were $2.90 and $2.75$2.78, and per diluted commonshare share,were $2.89 and $107.9 million, or $2.69 per basic and $2.67 per diluted common share,$2.75, respectively. Our results of operations for the years ended December 31, 20242025 and 2023,2024, produced an annual return on average assets of 1.31%1.36% and 1.34%1.31% and a return on average stockholders’ equity of 11.61%10.86% and 12.50%,11.61%, respectively.

Our accounting and reporting policies conform to GAAP and to general practices within the banking industry. To prepare financial statements and interim financial statements in conformity with GAAP, management makes estimates, assumptions and judgments based on available information. These estimates, assumptions and judgments affect the amounts reported in the financial statements and accompanying notes;notes, and are based on information available as of the date of the financial statements. As this information changes, actual results could differ from the estimates, assumptions and judgments reflected in the financial statements. In particular, management has identified several accounting policies that, due to the estimates, assumptions and judgments inherent in those policies, are critical in understanding our financial statements.

The following is a discussion of the critical accounting policies and significant estimates that require us to make complex and subjective judgments. Additional information about these policies can be found in Note 1 of our audited consolidated financial statements contained in Part II, Item 8 of this report.

Refer to Note 17 of the notes to our audited consolidated financial statements contained in Part II, Item 8 of this report for a complete discussion of our use of fair value and the related measurement practices.

The following table summarizes certain selected historical consolidated financial data of Byline as of or for the fiscal years ended December 31, 2025, 2024, 2023, and 2022,2023, and is derived from our audited financial statements. YouIt should be read this information in conjunction with our consolidated financial statements and related notes included in Part II, Item 8 of this report. Management uses the non-GAAP financial measures set forth herein in its analysis of our performance and believes that these non-GAAP financial measures provide useful information to management and investors; however, youthese disclosures should not viewbe these disclosuresviewed as a substitute for results determined in accordance with GAAP financial measures.

Calculation excludes impairment charges on assets held for sale and ROU assetsassets, merger-related expenses, secondary public offering of common stock expenses, and merger-relatedloss expenses.on extinguishment of debt.

Calculations exclude incremental income tax benefit related to impairment chargescharges, merger-related expenses, secondary public offering of common stock expenses, and merger-relatedloss expenseson (4) Represents loans and leases, netextinguishment of acquisition accounting adjustments, unearned deferred fees and costs and initial indirect costs.debt.

"Adjusted net income" and "adjusted diluted earnings per share" exclude certain significant items, which include impairment charges on assets held for sale and right-of use asset ("ROU"), merger-related expenses, secondary public offering of common stock expenses, and merger-relatedloss expenseson extinguishment of debt, adjusted for applicable income tax. Management believes the significant items are not indicative of or useful to measure our operating performance on an ongoing basis.

"Adjusted non-interest expense" is non-interest expense excluding certain significant items, which include impairment charges on assets held for sale and ROU assetasset, merger-related expenses, secondary public offering of common stock expenses, and merger-relatedloss expenses.on extinguishment of debt. Management believes the significant items are not indicative of or useful to measure our operating performance on an ongoing basis.

"Adjusted pre-tax pre-provision net income" is pre-tax pre-provision net income excluding certain significant items, which include impairment charges on assets held for sale and ROU assetasset, merger-related expenses, secondary public offering of common stock expenses, and merger-relatedloss expenses.on extinguishment of debt. Management believes the metric is an important measure of our operating performance on an ongoing basis.

"Adjusted pre-tax pre-provision return on average assets" excludes certain significant items, which include impairment charges on assets held for sale and ROU asset, merger-related expenses, secondary public offering of common stock expenses, and merger-relatedloss expenses.on extinguishment of debt.

"Tangible common stockholders' equity" is defined as total stockholders’stockholders' equity reduced by preferred stock andstock, goodwill and other intangible assets. Management does not consider servicing assets as an intangible asset for purposes of this calculation.

"Tangible book value per common share" is calculated as tangible common stockholders' equity, which is stockholders’ equity reduced by preferred stock andstock, 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 stockholders' equity to tangible assets" is calculated as tangible common stockholders' equity divided by tangible assets, which is total assets reduced by goodwill and other intangible assets. Management believes this metric 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.

"Tangible net income available to common stockholders" is net income available to common stockholders excluding after-tax intangible asset amortization.

"Adjusted tangible net income available to common stockholders" is tangible net income available to common stockholders excluding certain significant items. Management believes the metric is an important measure of our operating performance on an ongoing basis.

"Return on average tangible common stockholders’ equity" is tangible net income available to common stockholders divided by average tangible common stockholders’ equity. Management believes the metric is an important measure of our operating performance on an ongoing basis.

"Adjusted return on average tangible common stockholders’ equity" is adjusted tangible net income available to common stockholders divided by average tangible common stockholders’ equity. Management believes the metric is an important measure of our operating performance on an ongoing basis.

Net interest income for the year ended December 31, 20242025 was $348.0$385.3 million, an increase of $17.4$37.3 million, or 5.3%10.7% compared to 2023.2024. The increase in interest income of $86.5$6.3 million was principally a result of increasedgrowth averagein balancesthe due to portfolio growthloan and higherlease yields.portfolio. The average balance of interest-earning assets was $8.8$9.1 billion for the year ended December 31, 2024,2025, an increase of $1.1$356.2 billion,million, or 14.3%,4.1%, compared to 2023,2024, primarily due to growth in our loan and lease portfolios.portfolios and securities portfolio, offset by decreases to cash and cash equivalents. Interest expense increaseddecreased by $69.0$31.0 million or 14.2%, for the year ended December 31, 20242025 compared to 2023,2024, mostly due to higher average deposit balances, a shift in deposit mix, and higher averagelower rates paid and lower average balances on time deposits and partially offset by growth of money market accounts. Average total interest-bearing deposits increased $1.1$312.9 billion,million, or 25.7%5.6% year over year.

Interest expense on borrowings for the year ended December 31, 20242025 was $25.5$19.2 million compared to $27.4$25.5 million for the year ended December 31, 2023,2024, a decrease of $1.9$6.4 million, or 6.9%.24.9%. This decrease was driven mainly by a decrease inlower rates paid on other borrowings and lower average balances of such borrowings.

The net interest margin for the year ended December 31, 20242025 was 3.97%,4.22%, aan decreaseincrease of 3425 basis points compared to 4.31%3.97% for the year ended December 31, 2023.2024. The average yield on interest-earning assets increaseddecreased 2018 basis points to 6.28% for the year ended December 31, 2025 compared to 6.46% for the year ended December 31, 2024 compared to 6.26% for the year ended December 31, 2023,2024, while the average rate paid on interest-bearing liabilities increaseddecreased by 5960 basis points to 3.54%2.94% from 2.95%,3.54%, resulting in aan decreaseincrease in the interest rate spread of 3942 basis points.

Net loan accretion income was $10.4 million for the year ended December 31, 2025 compared to $13.5 million for the year ended December 31, 2024 compared to $16.7 million for the year ended December 31, 2023,2024, a decrease of $3.2$3.1 million. Total net loan accretion on acquired loans contributed 1511 basis points to the net interest margin for the year ended December 31, 20242025 compared to 2215 basis points for the year ended December 31, 2023.2024. Assuming no additional acquisitions, we expect loan accretion income to continue to decline as acquired loans mature. Projected accretion income as of December 31, 20242025 is summarized as follows:

Provision for credit losses for the year ended December 31, 20242025 was $27.0$36.1 million compared to $31.7$27.0 million for the year ended December 31, 2023,2024, aan decreaseincrease of $4.6$9.1 million. The decreaseincrease in provision was drivenmainly bydue lowerto non-performing and substandard loans, particularly those originatedgrowth in the commercialloan realand estatelease portfolio and higher non-performing loans and leases. 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. For the year ended December 31, 2025, the provision for credit losses is comprised of a provision for loan portfolio,and lease losses of $35.8 million and improvementa provision for unfunded commitments of purchased credit deteriorated and other acquired loans due to their continued resolution.$348,000. For the year ended December 31, 2024, the provision for credit losses is comprised of a provision for loan and lease losses of $28.3 million and a recapture of provision for unfunded commitments of $1.2 million. For the year ended December 31, 2023, the provision for credit losses is comprised of a provision for loan and lease losses of $32.2 million and a recapture of provision for unfunded commitments of $567,000. The ACL as a percentage of loans and leases decreased from 1.52% at December 31, 2023 to 1.42% at December 31, 2024.

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, treasury management fees, and other charges. Fees and service charges on deposits were $10.9 million for the year ended December 31, 2025, compared to $10.2 million for the year ended December 31, 2024, compared to $9.2 million for the year ended December 31, 2023, an increase of $1.0 million$662,000 or 10.9%.6.5%. The increase was a result of growth in deposit balances and from new client acquisitions.customers.

While portions of the loans that we originate are sold and generate gain on sale revenue, servicing rights for the majority of the 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 $12.9$12.3 million and $13.5$12.9 million in loan servicing revenue on the sold portion of U.S. government guaranteed loans for the years ended December 31, 20242025 and 2023,2024, respectively, a decrease of $598,000$644,000 or 4.4%. At December 31, 2024 and 2023, the outstanding balance of U.S. government guaranteed loans serviced was $1.7 billion.5.0%.

Loan servicing asset revaluation represents net changes in the fair value of our servicing assets. Loan servicing asset revaluation had a downward adjustment of $5.6 million for the year ended December 31, 2025, compared to a downward adjustment of $6.7 million for the year ended December 31, 2024, compared to a downward adjustmentdecrease of $5.1$1.1 millionmillion, foror the year ended December 31, 2023.16.4% The variance was primarily driven by the change in fair value of the servicing asset mainly as a result of lower overallaverage balancediscount of loans serviced and higher prepayment speeds.rate.

Net gains on sales of loans were $22.7 million for the year ended December 31, 2025 compared to $24.5 million for the year ended December 31, 20242024, compareda to $22.8 million for the year ended December 31, 2023, an increasedecrease of $1.7$1.8 million, or 7.6%.7.4%. The increasedecrease in net gains on sales was primarily driven by higherlower market premiums for U.S. government guaranteed loans. We sold $314.8$315.0 million and $348.4$314.8 million of U.S. government guaranteed loans during the years ended December 31, 20242025 and 2023,2024, respectively.

Other non-interest income was $11.0 million for the year ended December 31, 2025 compared to $8.7 million for the year ended December 31, 2024 compared to $6.2 million for the year ended December 31, 2023,2024, an increase of $2.5$2.3 million or 40.5%.26.1%. The increase was primarily a result of increased swap fee income,income a higher cash surrender value on bank owned life insurance, andfrom increased gainsswap on the sale of leased equipment.activity.

AdvertisingWe andreported promotionsnon-interest expense for the year ended December 31, 20242025 wereof $5.0$236.9 million compared to $3.8$218.8 million for the year ended December 31, 2023,2024, an increase of $1.2$18.1 million,million or 31.1%, primarily due to an increase in digital deposit advertising campaigns.8.3%.

TelecommunicationsSalaries forand employee benefits, the yearsingle endedlargest Decembercomponent 31,of 2024our non-interest expense, was $870,000 compared to $1.4$150.4 million for the year ended December 31, 2023,2025 compared to $140.1 million for the year ended December 31, 2024, an increase of $10.3 million or 7.3%, primarily a decreaseresult of $577,000 or 39.9%, primarily due to merger-related expensesexpenses, inmerit 2023salary increases, higher incentive compensation, and decreasedhigher telecommunicationequity-based data expenses.compensation.

For the years ended December 31, 20242025 and 2023,2024, our efficiency ratio was 52.45%51.83% and 52.62%,52.45%, respectively. The improvement in ourthe efficiency ratio was primarilymainly attributabledriven toby increased net interest incomerevenues and non-interestlower income, offset by an increase in non-interestinterest expense. For the years ended December 31, 20242025 and 2023,2024, our adjusted efficiency ratio was 52.24%50.37% and 49.61%,52.24%, respectively. Please refer to the "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" included in Item 7 of this report, for more information on how our adjusted efficiency ratio is calculated.

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 andand, readers are cautioned not to place undue reliance on such statements.

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 and California. 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 quarter ended MarchJune 31,30, 2026.

We reported consolidated net income of $37.6$40.2 million, or $0.84$0.90 per basic and $0.83$0.90 per diluted common share, for the three months ended MarchJune 31,30, 2026, compared to net income of $28.2$30.1 million, or $0.65$0.66 per basic and $0.64 per diluted common share, for the three months ended MarchJune 31,30, 2025, an increase of $9.3$10.1 million. The increase in net income was principally attributable to a $11.6$4.9 million increase in net interest income and $3.6$4.8 million decrease in the provision for credit losses, partially offset by a $2.3$5.0 million decreaseincrease to non-interestprovision income.for income taxes.

Dividends declared and paid on common shares were $5.4 million and $4.4$4.6 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Dividends paid on common shares were $5.7 million and $4.8 million for the three months ended June 30, 2026 and 2025, respectively.

Our results of operations for the three months ended MarchJune 31,30, 2026 and 2025 yielded an annualized return on average assets of 1.56%1.63% and 1.25%, and an annualized return on average stockholders’ equity of 11.43%12.05% and 10.32%,10.24%, respectively. Our results of operations for the six months ended June 30, 2026 and 2025 yielded an annualized return on average assets of 1.59% and 1.25%, and an annualized return on average stockholders’ equity of 11.74% and 10.28%, respectively.

As of MarchJune 31,30, 2026, we had consolidated total assets of $9.9 billion, total gross loans and leases outstanding of $7.5$7.6 billion, total deposits of $7.8$7.9 billion, and total stockholders’ equity of $1.3 billion.

Refer to Note 2 of our Unaudited Interim Condensed Consolidated Financial Statements as of MarchJune 31,30, 2026, which is included in this report, for a description of recent accounting pronouncements, including the effective dates of adoption and anticipated effects on our results of operations and financial condition.

(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.

(3) Calculation excludes merger-related expenses.expenses, secondary public offering of common stock expense, and impairment on assets held for sale.

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 deposits and other funding sources, (iii) net interest spread, and (iv) net interest margin. Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest margin is calculated as the annualized net interest income divided by average interest-earning assets. Because non-interest-bearing sources of funds, such as non-interest-bearing deposits and stockholders’ equity, also fund interest-earning assets, net interest margin includes the benefit of these non-interest-bearing sources.

We also recognize income from the accretable discounts associated with the purchase of interest-earning assets. Because of our recapitalization and acquisitions, we derive a portion of our interest income from the accretable discounts on purchase credit deteriorated and acquired non-credit-deteriorated loans. The accretion is generally recognized over the life of the loan and is impacted by changes in expected cash flows on the loan. This accretion will continue to have an impact on our net interest income as long as loans acquired with a discount at acquisition represent a meaningful portion of our interest-earning assets. As of MarchJune 31,30, 2026, purchased credit deteriorated loans accounted for under ASC Topic 326 represented 1.3%1.1% of our total loan and lease portfolio compared to 1.4% at December 31, 2025.

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 $2.6 million and $2.3 million for each of the three months ended June 30, 2026 and 2025, respectively. Non-accrual loans and leases are included in total loan and lease balances.

Net interest income for the three months ended MarchJune 31,30, 2026 was $99.9$100.8 million compared to $88.2$96.0 million during the same period in 2025, an increase of $11.6$4.9 million, or 13.2%.5.1%. Interest income increaseddecreased $6.8 million$233,000 for the three months ended MarchJune 31,30, 2026 compared to the same period in 2025 primarily as a result of higherlower average balancesyields on loansthe loan and leases.lease portfolio, partially offset by growth in the loan and lease portfolio. Interest expense decreased by $4.8$5.1 million, or 10.4%million for the three months ended MarchJune 31,30, 2026 compared to the same period in 2025 mainlymostly due to lower rates paid on interest-bearing deposits, primarily money market accounts and time deposits.

The net interest margin for the three months ended MarchJune 31,30, 2026 was 4.33%,4.28%, an increase of 26ten basis points compared to 4.07%4.18% for the three months ended MarchJune 31,30, 2025. The increase was primarily attributable to lower rates paid on money market accounts and time deposits, offset by lower yields on loans.loans and leases. The net interest margin for the six months ended June 30, 2026 was 4.30%, an increase of 17 basis points compared to 4.13% for the six months ended June 30, 2025. The increase was primarily attributable to lower rates paid on money market accounts and time deposits, offset by lower yields on loans and leases.

Net loan accretion income was $2.0$2.5 million for the three months ended MarchJune 31,30, 2026 compared to $2.6$3.0 million for the three months ended MarchJune 31,30, 2025, a decrease of $624,000$502,000 mainly due to lower accretion on acquired loans.loans converting to originated. Total net loan accretion on acquired loans contributed nine11 basis points to the net interest margin for the three months ended MarchJune 31,30, 2026 compared to 13 basis points for the three months ended June 30, 2025. Net loan accretion income was $4.4 million for the six months ended June 30, 2026 compared to $5.6 million for the six months ended June 30, 2025, a decrease of $1.1 million due to acquired loans converting to originated and charge-offs of PCD loans. Total net loan accretion on acquired loans contributed ten basis points to the net interest margin for the six months ended June 30, 2026 compared to 12 basis points for the threesix months ended MarchJune 31,30, 2025. Estimated projected accretion income for the remaining periods as of MarchJune 31,30, 2026 is summarized as follows (dollars in thousands):

(2) Projections are updatedundated quarterly, assume no prepayments, and are subject to change.

The provision for credit losses isreflects the amount required to maintain the ACL at an appropriate level based upon management’s evaluation of collectively and individually evaluated loss reserves. The provision for credit losses represents a charge to earnings necessary to establish an allowance for credit losses that, in management’s evaluation, is appropriate to provide coverage for current expected credit losses in the loan and lease portfolio. The ACL is increased by the provision for credit losses and is decreased by charge-offs, net of recoveries on prior charge-offs.

The provision for credit losses was $5.5$7.2 million for the three months ended MarchJune 31,30, 2026, compared to $9.2$11.9 million for the three months ended MarchJune 31,30, 2025, a decrease of $3.6$4.8 million and is comprised of a provision for credit losses - loans and leases and a recapture of the provision for credit losses - unfunded commitments. Provision for credit losses - loans and leases was $6.0$7.4 million for the three months ended MarchJune 31,30, 2026, comparedand to $9.1$11.8 million for the three months ended MarchJune 31,30, 2025, a decrease of $3.1$4.3 million. The decrease in provision for credit losses - loans and leases was driven by a recapture of provision on commercial real estate loans and construction, land development, and other land loans. The provision for credit losses - unfunded commitments was a recapture of $458,000$266,000 and a provision of $166,000 for the three months ended MarchJune 31,30, 2026 and a2025, provision of $103,000 for the three months ended March 31, 2025.respectively.

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, treasury management fees, and other charges. Fees and service charges on deposits were $2.9 million and $2.7$2.6 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively,respectively. anFees increaseand ofservice 8.0%.charges on deposits were $5.8 million and $5.3 million for the six months ended June 30, 2026 and 2025, respectively. The increaseincreases iswere primarily due to growth in deposits and increased fees.

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 $3.1 million in loan servicing revenue on the sold portion of the U.S. government guaranteed loans for the three months ended MarchJune 31,30, 2026 and 2025, respectively. We generated $6.1 million in loan servicing revenue on the sold portion of the U.S. government guaranteed loans for each of the six months ended June 30, 2026 and 2025. The decrease in revenue in each period is due to lower volume of loans serviced. At MarchJune 31,30, 2026 and 2025, the outstanding balance of guaranteed loans serviced was $1.6 billion and $1.7 billion, respectively.

Loan servicing asset revaluation represents net changes in the fair value of our servicing assets. Loan servicing asset revaluation had a downward adjustmentsadjustment of $1.9$1.1 million and $1.1$2.1 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, a change of $811,000,$1.0 ormillion. 77.1%.Loan Changesservicing asset revaluation had a downward adjustment of $3.0 million and $3.2 million for the six months ended June 30, 2026 and 2025, respectively, a change of $213,000. Change in the revaluationrevaluations were mainly due to higherchanges prepayments.in the size of the serviced loan portfolio, offset by decreases to the discount rate and longer weighted-average life of the loans.

NetATM gainsand oninterchange sales of loansfees were $5.5$1.4 million for the three months ended MarchJune 31,30, 2026 compared to $4.9$1.1 million for the three months ended MarchJune 31,30, 2025, an increase of $530,000,$318,000 or 10.8%,30.0%. drivenATM mainlyand byinterchange higherfees premiums.were We sold $71.8$2.3 million of U.S. government guaranteed loans duringfor the threesix months ended MarchJune 31,30, 2026,2026 compared to $70.2$2.1 million duringfor the threesix months ended MarchJune 31,30, 2025.2025, an increase of $215,000 or 10.3%. The increases were primarily due to higher interchange fees and higher third-party merchant fees.

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 $1.3 million for the three months ended MarchJune 31,30, 2026 compared to $1.1 million for the three months ended MarchJune 31,30, 2025, an increase of $180,000$196,000 or 16.6%.18.3%. Wealth management and trust income was $2.5 million for the six months ended June 30, 2026 compared to $2.2 million for the six months ended June 30, 2025, an increase of $376,000 or 17.5%. The increases were primarily driven by increases to assets under management. Assets under administrationmanagement were $803.9$1.0 millionbillion and $741.8$869.1 million as of MarchJune 31,30, 2026 and 2025, respectively.respectively, an increase of $138.6 million or 16.0%.

Other non-interest income was $1.9$2.5 million for the three months ended MarchJune 31,30, 2026, compared to $2.3$3.3 million for the three months ended MarchJune 31,30, 2025, a decrease of $421,000$799,000 or 18.4%.24.0%. TheOther non-interest income was $4.4 million for the six months ended June 30, 2026 compared to $5.6 million for the six months ended June 30, 2025, a decrease wasof $1.2 million or 21.7%. These decreases were primarily fromdriven by lower swap fee incomeincome, fromlower decreased swap activity and a lossgains on a salesales of leased assetsequipment incurredand inhigher theincome threeassociated monthswith endedbank Marchowned 31,life 2026.insurance during 2025.

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

Salaries and employee benefits, the single largest component of our non-interest expense, totaled $36.2$35.7 million and $37.8 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, a decrease of $2.2 million, or 5.7%. Salaries and employee benefits, totaled $71.9 million for the six months ended June 30, 2026 compared to $36.3$74.1 million for the threesix months ended MarchJune 31,30, 2025, a decrease of $7,000.$2.2 million, or 2.9%. These decreases were primarily a result of merger-related expenses incurred during the three and six months ended June 30, 2025.

Occupancy and equipment expense,expenses, net,net was $4.4$4.1 million for the three months ended MarchJune 31,30, 20262026, compared to $4.9$4.7 million for the three months ended MarchJune 31,30, 2025, a decrease of $407,000$674,000 or 8.4%.14.2%. Occupancy and equipment expenses, net was $8.5 million for the six months ended June 30, 2026, compared to $9.6 million for the six months ended June 30, 2025, a decrease of $1.1 million or 11.3%. The decreasedecreases isin primarilyboth dueperiods towere driven by lower repairdepreciation andexpense on software, lower maintenance expense,expenses, and lower softwarerent expenses.

Loan and lease related expenses were $929,000$752,000 for the three months ended MarchJune 31,30, 2026 compared to $827,000$938,000 for the three months ended MarchJune 31,30, 2025, ana increasedecrease of $102,000,$186,000, or 12.2%.19.8%. TheLoan increaseand waslease related expenses were $1.7 million for the six months ended June 30, 2026, compared to $1.8 million for the six months ended June 30, 2025, a decrease of $84,000 or 4.7%. These decreases were primarily duedriven toby higherlower appraisalgovernment guaranteed loan expenses during the three and surveysix fees,months higherended commercialJune fees,30, and higher tax liens and judgments.2026.

Data processing was $4.9 million for the three months ended MarchJune 31,30, 2026,2026 compared to $5.2$5.0 million for the three months ended MarchJune 31,30, 2025, a decrease of $246,000$120,000 or 4.8%.2.4%. TheData processing was $9.8 million for the six months ended June 30, 2026, compared to $10.2 million for the six months ended June 30, 2025, a decrease wasof $366,000 or 3.6%. These decreases were driven mainly by lower outside services spending due to lowermerger-related outsidedata serviceprocessing providerexpenses expenses.incurred during the three and six months ended June 30, 2025, these were offset by higher software fees for the three and six months ended June 30, 2026.

Other non-interest expense was $5.4$6.0 million for the three months ended MarchJune 31,30, 2026 compared to $4.9$4.8 million for the three months ended MarchJune 31,30, 2025, an increase of $440,000,$1.2 million or 9.0%.25.2%. Other non-interest expense was $11.4 million for the six months ended June 30, 2026, compared to $9.7 million for the six months ended June 30, 2025, an increase of $1.7 million or 17.0%. The increase for both periods was primarily duedriven toby highera telecommunicationsgain expenses,on higherthe sale of asset recorded in the three months ended June 30, 2025 and increases in advertising expenses,and promotions for the three and increasedsix insurance-relatedmonths operatingended costs.June 30, 2026.

Our efficiency ratio was 49.78%46.93% for the three months ended MarchJune 31,30, 2026 compared to 53.66%52.61% for the three months ended MarchJune 31,30, 2025. Our adjusted efficiency ratio was 46.51% for the three months ended June 30, 2026 compared to 48.20% for the three months ended June 30, 2025. The change in our efficiency ratio was mainly driven by higher net interest income and lower non-interest expense. Our efficiency ratio was 48.32% for the threesix months ended MarchJune 31,30, 20262026, wascompared drivento by53.11% increasedfor netthe interestsix income.months ended June 30, 2025. Our adjusted efficiency ratio was 49.78%48.11% for the threesix months ended MarchJune 31,30, 20262026, compared to 53.04%50.54% for the threesix months ended MarchJune 31,30, 2025. The change in our efficiency ratio was principally driven by higher net interest income.

Our provision for income taxes for the three months ended MarchJune 31,30, 2026 totaled $12.1$13.9 million compared to $9.2$8.8 million for the three months ended MarchJune 31,30, 2025, an increase of $2.9$5.0 million, or 31.1%.57.0%. The increase in income tax expense was principally due to an increase inhigher net income before provision for income taxes.taxes, and lower discrete tax benefit due to the exercise of stock options and vesting of restricted shares. Our effective tax rate was 24.4%25.7% for the three months ended MarchJune 31,30, 2026 and 24.6%22.7% for the three months ended MarchJune 31,30, 2025.

Our total assets increased by $257.0$279.8 million, or 2.7%,2.9%, to $9.9 billion at MarchJune 31,30, 2026 compared to $9.7 billion at December 31, 2025. The increase in total assets was primarily due to an increase in securities available-for-sale of $251.1$211.6 million, or 17.9%, and an increase in cash and cash equivalents of $49.3 million, or 33.0%. These were offset by decreases to total loans and leases of $34.1 million or 0.5%.15.1%.

Total liabilities increased by $244.6$243.5 million, or 2.9%, to $8.6 billion at MarchJune 31,30, 2026 compared to $8.4 billion at December 31, 2025. Total deposits increased by $154.4$223.3 million, or 2.0%,2.9%, driven by growth in time deposits and interest-bearing checking accountsadd.accounts and time deposits. Other borrowings increased by $84.9$40.9 million, or 20.2%, mainly9.7%, due to higherincreased FHLB advances.

Investment Portfolio,Portfolio

Our investment securities portfolio consists of securities classified as available-for-sale. There were no securities classified held-to-maturity or as trading in our investment portfolio during the three months ended March 31, 2026 or the year ended December 31, 2025. There were no securities classified as held-to-maturity as of MarchJune 31,30, 2026 or December 31, 2025. All available-for sale securities are carried at fair value and may be used for liquidity purposes should management consider it to be in our best interest. Securities available-for-sale consist primarily of residential mortgage-backed securities, commercial mortgage-backed securities,securities and U.S. government agencies securities.

Securities available-for-sale increased by $251.1$211.6 million, or 17.9%,15.1%, from $1.4 billion at December 31, 2025 to $1.7$1.6 billion at MarchJune 31,30, 2026. The increase was mainlyprimarily attributed to purchases of securities, netmainly ofmortgage-backed maturities, calls, and repayments.securities.

Certain securities have fair values less than amortized cost and, therefore, contain unrealized losses. At MarchJune 31,30, 2026, we evaluated the securities that had an unrealized loss for credit losses and determined there were none. There were 244252 investment securities with unrealized losses at MarchJune 31,30, 2026. We anticipate full recovery of amortized cost with respect to these securities by maturity, or sooner in the event of a more favorable market interest rate environment. We do not intend to sell these securities and it is not more likely than not that we will be required to sell them before recovery of their amortized cost basis, which may be at maturity.

The following table (dollars in thousands) set forth certain information regarding contractual maturities and the weighted average yields of our investment securities as of MarchJune 31,30, 2026. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Total non-taxable securities classified as obligations of states, municipalities and political subdivisions were $38.6$23.4 million at MarchJune 31,30, 2026, a decrease of $380,000$15.5 million from December 31, 2025.

There were no holdings of securities of any one issuer, other than U.S. government-sponsored entities and agencies, with total outstanding balances greater than 10% of our stockholders’ equity as of MarchJune 31,30, 2026 or December 31, 2025.

As a member of the Federal Home Loan BankFHLB 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 MarchJune 31,30, 2026 and December 31, 2025, we held $20.6$18.8 million and $21.3 million, respectively, in FHLB and Bankers’ Bank stock. We evaluate impairment of our investment in FHLB and Bankers’ Bank based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. We did not identify any indicators of impairment of FHLB and Bankers’ Bank stock as of MarchJune 31,30, 2026 and December 31, 2025.