Byline Bancorp, Inc.

Good morning and welcome to the Byline Bank Corp third quarter 2022 earnings call. My name is Amber and I will be your conference operator today. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question, simply press star followed by one on your telephone. If you would like to withdraw your question, please press star and two. If you are listening via speakerphone, please lift your handset prior to asking your question. If you require operator assistance, please press star, then zero. Please note, the conference call is being recorded. At this time, I would like to introduce Brooks Rennie, Head of Investor Relations for Byline Bancorp, to begin the conference call.

Thank you, Amber. Good morning, everyone. And thank you for joining us today for the Byline Bancorp third quarter 2022 earnings call. In accordance with regulation FD, this call is being recorded. and is available via webcast on our investor relations website, along with our earnings release and the corresponding presentation slides. Management would like to remind everyone that certain statements made on today's call involve projections or other forward-looking statements regarding the future events or the future financial performance of the company. We caution that such statements are subject to certain risks, uncertainties, and other factors that could cause actual results to differ materially from those discussed. The company's risk factors are disclosed and discussed in SEC filings. In addition, certain slides contain and we may refer to non-GAAP measures, which are intended to supplement but not substitute for the most directly comparable GAAP measures. Reconciliation for these numbers can be found within the appendix of the earnings release. For additional information about risks and uncertainties, please see the forward-looking statement and non-GAAP financial measures disclosures in the earnings release. I would now like to turn the conference call over to Alberto Parchini, President of Byline Bancorp. Alberto Parchini, President of Byline Bancorp.

Alberto Parchini, President of Byline Bancorp. Alberto Parchini, President of Byline Bancorp. Alberto Parchini, President of Byline Bancorp. Alberto Parchini, President of Byline Bancorp. Alberto Parchini, President of Byline Bancorp. Alberto Parchini, President of Byline Bancorp. Alberto Parchini, President of Byline Bancorp. Alberto Parchini, President of Byline Bancorp. Alberto Parchini, President of Byline Bancorp. Alberto Parchini, President of Byline Bancorp. Alberto Parchini, President of Byline Bancorp. Alberto Parchini, President of Byline Bancorp. Alberto Parchini, President of Byline Bancorp. Alberto Parch Starting with financial highlights on slide three of the deck. As you've seen by now, we delivered another strong quarter highlighted by higher earnings, strong loan growth, positive operating leverage, solid profitability, and stable asset quality. For the quarter, we generated net income of $22.7 million, or $0.61 per diluted share, which compared favorably to the $0.54 we earned last quarter. These results continue to show the strengths of our diversified model, commercial focus, and the hard work of our employees. Our return metrics continue to be solid across the board with pre-tax preparation income of $34.7 million, up 8.9%, quarter over quarter, and pre-tax preparation ROA of 1.93%, again, up nine basis points from last quarter. Return on assets came in at a solid 1.26 percent, while ROTCE was 15.4 percent. Total revenue came in at $81 million, up 7 percent quarter-over-quarter. The combination of continued growth in our commercial loan book coupled with higher rates boosted net interest income by 12 percent, and our margin increased by 28 basis points to 4.05 percent. We continue to remain well-positioned to benefit from additional rate increases. Non-interest income was $12 million, which was down $2 million from last quarter. The decline was driven by lower gain on sale income stemming from lower volume of loans sold for the quarter. Expenses were up by $2.4 million, primarily due to higher incentive compensation accruals and lower deferred loan origination costs. Notwithstanding, expenses were well managed as we achieved positive operating leverage for the quarter, and our efficiency ratio remained essentially flat at 55%. T. Moving on to the balance sheet, the third quarter saw growth in both loans and deposits loans increased by 107 million or 8% annualized and stood at 5.3 billion as of quarter end. T. This was the sixth consecutive quarter of solid growth and consistent with our guidance last quarter. T. Net of loan sales we originated 303 million in loans coming primarily from our CNI and leasing businesses. Payoff activity increased this quarter, as expected, and line utilization remained relatively stable at 55.8%. Our government-guaranteed lending business had strong production with $151 million in closed loans, up 21% from the prior quarter. We remain a market leader in this business, and as of the government's fiscal year-end on September 30th, we're the fifth-largest 7A lender in the U.S. Moving on to the liability side, total deposits stood at $5.6 billion as of quarter end, up about 17 percent on a linked quarter basis, with the growth coming primarily from money market and other interest-bearing accounts. The mix remained solid despite the higher absolute level of rates, with DDA representing 38 percent of total deposits. Deposit costs increased 27 basis points to 43 basis points this quarter and were in line with expectations. The faucet betas continue to track with our previous guidance of 40% for the cycle for interest bearing accounts. And we are currently operating below that level. We added some additional detail on the faucet betas for your benefit on page six of the deck. Tom will cover this shortly, but we expect that continued target rate increases by the Fed will obviously impact loan and deposit rates. At this point in the cycle, Given our asset-sensitive position, we expect loan yields will continue to exceed the change in the faucet costs. Asset quality remains stable with NPAs and non-performing loans basically flat to last quarter and charges coming in at 15 basis points, which was nine basis points lower than the previous quarter. A reserves increase consistent with growth in the portfolio and uncertainty in the outlook. While our portfolio metrics remain stable, we are cognizant of the impact that a recession coupled with rapid increases in borrowing costs can have on our portfolio. To that end, we are proactively conducting targeted reviews of different portfolio segments, closely monitoring past dues, and communicating with customers to get a street-level perspective on current performance and the outlook going forward. To date, we have not found much in terms of weakness, but we'll continue to remain vigilant given the uncertainty in the environment. Moving on to capital, capital levels remain strong with a CET1 ratio of 10.3%, total capital ratio of 13%, and TCE inclusive of AOCI of 8.25% as of quarter end, which is consistent with our targeted TCE range of 8 to 9%. This past quarter, we returned capital to shareholders with the repurchase of approximately 174,000 shares of our common stock, along with our quarterly dividend of $0.09 per share. We remain focused on executing our strategy, invest in the business, and continue to look for opportunities to grow the franchise while delivering value to shareholders. With that, I'd like to turn over the call to Tom, who will provide you with more details on our results.