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• Corporate Strategy and Culture

• Core objective is to become the preeminent commercial bank in Chicago, focused on relationship quality, credit discipline, talent, and shareholder value rather than scale for scale's sake; expected organic growth over the next 3-5 years, with selective strategic M&A only within pre-established metrics.
• Recognized as one of the 2026 Best Workplaces in Illinois for the third consecutive year, based on employee feedback, reinforcing the company's philosophy that engaged employees drive better business outcomes.
• Named 2025 Illinois SBA 7A Lender of the Year for the 17th consecutive year, and 2025 Illinois SBA Expert Lender of the Year, reflecting consistent expertise and commitment to small business lending.
• Wealth management business crossed $1 billion in assets under administration, marking a key milestone for this growing line of business.

• Balance Sheet and Operational Execution

• Delivered record net income in Q2 2026, marking the 15th consecutive quarter of pre-tax provision ROA above 2%, and the fourth consecutive quarter of improvement in the efficiency ratio (the best efficiency ratio since becoming a public company in 2017).
• Achieved positive operating leverage: revenue grew while non-interest expenses declined quarter-over-quarter.
• Elevated payoff activity ($339 million for the quarter) is primarily driven by recycling of assets from prior acquisitions, not weak origination demand; origination activity remained solid at $234 million for the quarter, with line utilization increasing to 60% from 59% last quarter.
• Capital allocation remains disciplined: the company repurchased 275,000 shares for $9.1 million in Q2, the board approved a 16.7% dividend increase to $0.14 per share, and total shareholder payout ratio for the quarter was 36%. Capital is prioritized for organic loan growth, reinvestment in the business, selective M&A, and returning excess capital to shareholders.
• Ongoing preparation for crossing the $10 billion asset threshold informs current decisions around growth, expenses, and capital.

• Full-year 2026 loan growth is expected to be in the mid-single-digit range, assuming payoff activity normalizes in the second half of the year after elevated levels from asset recycling in the first half. • Q3 2026 net interest income is expected to be in the range of $100 million to $102 million. • Q3 2026 non-interest income is expected to be in the range of $14 million to $15 million, with average gain on sale revenue of ~$5.5 million per quarter. • Full-year 2026 non-interest expense guidance is maintained at $59 million to $60 million per quarter, with higher expenses in the second half driven primarily by compensation, employee benefits, and higher commissions tied to annual production. • Near-term net charge-off rates are expected to remain in the 30 to 40 basis point range, with a gradual long-term decline as higher-risk SBA lending becomes a smaller proportion of the overall loan portfolio. • The company does not plan to grow its securities portfolio going forward, with excess liquidity prioritized for loan growth.

Byline Bancorp reports consolidated financial performance for Q2 2026, with no separate product segment breakdown provided in the transcript. Consolidated results: total revenue of $118 million, up 4.7% quarter-over-quarter; net interest income (NII) of $101 million, consistent with prior guidance; non-interest income of $17 million, up 35% quarter-over-quarter, driven by favorable fair market marks, higher gain on sale revenue, and stronger swap fee income; non-interest expenses of $56.5 million, down 1.2% quarter-over-quarter; net income of $40.2 million ($0.90 per diluted share), up from $37.6 million ($0.83 per diluted share) last quarter; adjusted EPS of $0.91, up 21% year-over-year; return on average assets of 1.63%, up 7 basis points quarter-over-quarter; return on annual common equity of ~14.5%, up 70 basis points quarter-over-quarter; adjusted efficiency ratio of 46.5%, improved 285 basis points quarter-over-quarter; total assets of $9.9 billion; total deposits of $7.9 billion, up 3.5% annualized quarter-over-quarter, with growth driven by interest-checking balances partially offset by lower money market balances; total loans of $7.6 billion, up 4.2% annualized quarter-over-quarter; net interest margin of 4.28%, down 5 basis points quarter-over-quarter; allowance for credit losses of $112 million, equal to 1.48% of total loans, up 2 basis points quarter-over-quarter; net charge-offs of $4.4 million, equal to 24 basis points of total loans, down from 32 basis points last quarter; non-performing loans of $69.1 million, equal to 92 basis points of total loans, flat year-over-year; tangible common equity ratio of 11.4%, CET1 ratio of 12.9%, both well above regulatory requirements.

• The macroeconomic environment is expected to remain higher for longer on interest rates, contrary to earlier projections, leading to increased price competition for commercial loans (particularly in commercial real estate) and heightened competition for deposits, which creates pressure on net interest margins. • Payoff timing is highly uncertain and can create volatility in reported end-of-period loan balances and annualized growth rates. • Persistently high inflation and labor market strength continue to create upward pressure on employee compensation and benefit costs. • While current credit quality trends are favorable, management notes the need to remain vigilant given the ongoing uncertain evolving macro environment. • When pursuing M&A, only transactions that meet strict return and valuation parameters will be approved, limiting near-term deal certainty.

Q: With loan growth through the first half of 2026 running well below the full-year mid-single-digit guidance, management was asked to explain the drivers and confirm back half growth expectations. / A: Elevated payoff activity over the past two quarters is mostly driven by recycling of legacy assets from prior acquisitions, not weak originations. Origination activity has remained consistent over recent quarters, and management expects the bulk of elevated payoffs is now behind them. They retain confidence that full-year 2026 underlying loan growth will hit the mid-single-digit target, though remaining payoff volatility could impact reported end-of-period growth numbers. The firm prioritizes funding loan growth with core deposits, so growth will not outpace deposit accumulation meaningfully.

A: Higher second half expense guidance is driven by expected higher compensation, health care benefit costs, and production-linked commissions, a trend that matches prior year seasonal patterns. The firm is actively pursuing attractive talent opportunities in the current market, and any large team hires that would increase expenses beyond base guidance would be disclosed separately.

Q: With strong profitability building excess capital, management was asked to update M&A appetite and capital return strategy if no attractive deals emerge. / A: M&A activity is particularly active for sub-$10 billion bank targets, with constructive market chatter, but the firm only pursues deals that meet long-standing disciplined parameters: earnback period of less than three years, and a reasonable tangible book valuation relative to earnings accretion. Absent attractive accretive M&A opportunities, excess capital will be returned to shareholders via the existing share repurchase program and regular dividend increases, as demonstrated by the recently approved 16.7% dividend hike.

Q: Management was asked to explain the large sequential drop in criticized loans this quarter and comment on overall commercial borrowing base health. / A: The drop in criticized loans stemmed from three specific idiosyncratic factors: two large performing loans that had been downgraded earlier were upgraded after extended periods of improved operating performance, a large non-performing workout loan was fully paid off via an asset sale, and the firm realized a recovery on a previously charged-off exposure. Management noted there are no broad sector-wide negative trends across the loan portfolio, and the firm maintains a policy of proactive early downgrades to ensure transparent portfolio risk reporting.

A: Increased commercial real estate loan pricing competition is primarily being driven by large regional banks returning to the market after gaining clarity on final Basel III capital rules, which has reduced prior capital uncertainty. Large banks are now putting more capital to work in multifamily and industrial CRE, leading to pricing compression amid lower overall transaction volume relative to pre-rate hike periods. Deposit competition remains rational overall, with core relationship deposits still stable and low-cost, and incremental higher pricing is limited to short-term certificates of deposit as market expectations for rate cuts have shifted to potential hikes.

Q: An analyst asked how crossing the $10 billion asset threshold timing will be managed, and whether it will happen in H2 2026 or be pushed into 2027. / A: The firm is not changing normal business operations to avoid crossing the threshold, but if by early December 2026 it can stay just under $10 billion through normal balance sheet management, it will do so to push the impact of new regulatory requirements out to mid-2027. There are no plans to take extraordinary actions to avoid crossing the threshold at this time.