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Byline Bancorp (BY)

Participants
Tony Rossi Financial Profiles
Alberto Paracchini President
Lindsay Corby Chief Financial Officer
Roberto Herencia Executive Chairman & Chief Executive Officer
Terry McEvoy Stephens
Ebrahim Poonawala Bank of America
Michael Perito KBW
Nathan Race Piper Sandler
Brian Martin Janney Montgomery
Michael Perito KBW
Call transcript
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Operator

Good day, and welcome to the Byline Bancorp First Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that, this event is being recorded. I would now like to turn the conference over to Tony Rossi of Financial Profiles. ahead. go Please

Tony Rossi

part Good Byline's us Cole. XXXX and you to and presentation thank Call. Please presentation. this Thank the the Relations visit for morning, website the joining Events as slide a today be page Quarter our Byline for discussion We'll morning. of you, Presentations using everyone, of Investor Bancorp Earnings access First for

to forward-looking factors the Bancorp. future with the could company's which directly reconciliation today, company like non-GAAP performance the comparable are by materially and implied that, Byline begin, be quantitative well financial to as the such the as from call cause this remind conference respect forward-looking I'd the The to Various company's forward-looking statements contains substitute contains most turn supplement, the obligation disclaims uncertainties, available the we statements. any Byline on intended to SEC the any financial Before to release available for of filings, the press are made be but pandemic. you website. statements, the other different future are may And with These and The update risks and condition Bancorp results call. impact like Paracchini in or call results actual Alberto expressed of involve of COVID-XX refer GAAP President to non-GAAP information that, to of factors to GAAP discussed including I'd the discussed which measures. during website that, any not over measures, to on to Management measures.

Alberto Paracchini

quarter on Lindsay and to Thank good and call Credit welcome CEO; Officer. earnings our me are for Mark this Herencia, joining in morning. Corby, you, morning participating this Chairman our Tony, Executive and Fucinato, our and Great. Chief call the call. Roberto our Thank And you everyone, first CFO;

turn call the detail. who our walk call I'll for I'll you come to that, remarks, practice, with closing for and questions. normal provide highlights our open with call more start with you financials results I the of we Lindsay a is before up some in After As the before over summary our quarter, through back will the

for were quarter the points, As follow at highest can on record PPP XXX of comments basis presentation while was level income and is materials over the Page with had company. always, website. came One quarters. the from levels you Pre-tax a the up find last at $XX.X the highlight summarized record a very was XXX quarter. our was up year-over-year for was can substantially last previous pre-provision which program, $X.XX ROA strong and across ROTCE quarter round the first in basis came X Overall, excellent Relations our to you metrics board. quarter share. million, or compared basis. XX.XX% on productive our participation in five points, we section the a both per This ROA the was and deck. return Investor Net and at both of Profitability the in of on two

experience well both support market. customers the with as in to small in business of bank as the by customers, relationship-oriented new existing drawn continue a positive We working

first current X,XXX than processed more round. with when approved we $XXX million. have over X,XXX $XXX the loans, round totaling loans the We combined million totaling And during

their originations forgiven of quarter, job $XXX customers remain built of base clients tends also and a during first year-over-year this strong customers is up of us. the all for employees. notable the commercial our slow quarter to in business activity, We liquidity to quarter XX%. in originations our platform, our small $XXX the business fact areas given from bankers PPP of PPP, excluding excellent of leasing we commercial a which and loans inclusive our an of related business. up active Economic million during million by banking high our contributions the increased by On navigate activity had X.X% our all-in-all asset continued among originations loan seasonally PPP, process coming good increased Outside level by quarter, be that the $X.X a in new basis, with the development new forgiveness quarter period and to helping with pick supporting Loan with increased to balances billion.

production fourth $XXX quarter, increased had a on basis, which lower remain XX% quarter year market $XX ago. same levels. the secondary but a our period loans, closed record year-over-year million. was also loans in strong as at to the with expected Premiums On million gains up business a lending sales million government-guaranteed of the in of Our than net $X.X over

from stemming relationships deposit of liquidity existing we the new clients. continued On of inflows buildup the the of commercial strong side, and commercial among addition deposits, saw

deposit to points the the impact yields. liquidity margin costs deposit Our increased and of remains deposits deposit exceeding helping improved of remain the outstanding by basis X lower end core at securities DDAs to us now basis which stable XX% XX mix balances our The mix XX.X% deposits of cost balances. points of and helped of representing to quarter, with total the allowed lower with to offset drive

stock. with the performance, during common our XX.X% repurchased to just XXX% we shares Asset we the remains with from to well the Net declined end excluding improved capital charge-offs capital X.X% total at and of loans, quality points under non-performing both from X.XX% CET quarter loans improved strong NPLs loans, last our Combined of to quarter. stable loans. Reserve representing the and remained and positioned the also of prior our of of at the levels quarter, XXX,XXX return financial X.X% strong basis at allowance PPP. coverage at end X.XX% solid XX% were with the shareholders to remained Classified with approximately Capital of of declining XX quarter. when and NPAs quarter.

Our balance organic strength us growth, to M&A sheet to pursue support positions capital opportunities. shareholders, return well and

consist and by of loans, to of appendix walk excluding declined decline to the deferrals to that, loans the now to like COVID borrowers in to in total $XX.X you more government-guaranteed million of with million, X, slide loans of the the food the portfolio prior for of $XX.X a Nearly through quarter. who million, to And deferrals outstanding X.XX% to half accommodation $XX.X and our over industries. over $XX.X I'd will PPP. refer turn call Deferrals Lindsay, Please detail financials. affected from industries. represent at service stood Turning

Lindsay Corby

I'll information on everyone. morning, some for on additional loan slide portfolio us today. start Good with joining Thanks Alberto. our Thanks, X.

the outside loans March have billion which end due growth Our were and we bit $XXX PPP leases to little of originations of new at of the did a was of an increase PPP quarter, although prior portfolio. total of primarily million $X.X loans, from the XX,

client loans loan Our When across planned offset We commercial, portfolio our The acquired originated a broad loan portfolio. in increased loan by decrease are year, estate our commercial and offset in loan the equipment in growth million when $XXX and past the commercial portfolio over which the $XX leasing, including real our portfolio are the originated core mortgage first residential resolutions quarter million impaired residential in reflects of million in growth PPP mortgage continued the by loans XX% excluded. portfolio, increased portfolio during our million, loan base. excluded, the helped $XX portfolio. runoff saw $XX.X our in growth PPP or originated was acquired which

payoffs. of new $XXX offset had we first which originations million PPP, quarter, partially was Excluding million in $XXX of the by

sheet X, look X(a) business. which of exposure sheet lending of $XX slide million USDA At strong is $XX was at government-guaranteed was exposure on $XX production guaranteed. million quarter to of XX, commitments. the March by We $XXX $XXX million million, SBA of The guaranteed is SBA. million, which had another we'll the very our Turning on-balance with including loan balance

outlook programs, SBA approximately and from the the purpose providing regular stronger of this subsidies. support borrowers allowance begin reopens. of applications continue our drinks. believe will loan we The at businesses recovery most to This as coverage to pandemic. the continued grants, accepting bridge subsidies end a includes as the increasing the XX, up to SBA to X% a introduce at balances our fully improving, by designed are to for and portfolio, Fund, the is percentage return prior the While of to impacted which targeted borrowers primary assist quarter. increased X.X% until payment on to to status Restaurant March Revitalization serving economy grants a new Accordingly, or begin for economic unguaranteed The these programs, from deferrals borrowers billion $XX.X the prudent food it with is

deposits. to Moving over

in deposit the in funding $X from million for and attributed $XXX continue growth history. our billion prior came inflows The quarter. we categories, first as increased the this strong of deposits total to cost lower quarter PPP particularly Our of see DDAS, time to end exceeded the our

now our Our at deposit Non-interest-bearing deposits about just a quarter, end deposits from continued of of total represent deposits to the in total half during mix of activity prior result to shift of the positive deposits. commercial in increased quarter while XX.X% deposits. our the XX.X%

income Moving margin. on net and interest to

basis, the lower PPP our net quarter. X.XX% points the the for last XX contributed well to increase from income in was related Accretion margin the down funding quarter, income loans for to XX Our in primarily prior was points from net quarter. in margin X% interest was On as interest acquired basis due first This a from unchanged up costs. the on million quarter, first basis as quarter. GAAP last $XX.X quarter, an income, the

increase recognition points. decline margin Excluding of the the interest was average due accretion basis net our The cost PPP our deposits. of three increase to income was an in X.XX%, and income,

and room impact quarter, should We yields. over remainder our deposits to We level of of reprice the from down the costs, core for our outlook believe and time have offset compression PPP and NIM, the next the year. little quarter next mature for to accretion be help a excluding more as loan expected is securities compressed deposit off and bring slightly our which

and remix securities returns, as As balance economic loans. sheet the margin loan improve improve outlook our from we conditions more growth and towards could away

market and rate value $XXX against hedges interest flow fixed protect cash million income well of addition, as pay added a starting In forward years, environment. to losses we rising in in protect future as net

Turning to was a the to the quarter. decrease In million income factors. primarily on of our non-interest first non-interest prior decreased by income couple $X from XX. The quarter, attributed slide

asset servicing we had First, net of quarter. loans by sold. we the charge And $X.X the on volume securities. loans to a offset revaluation decline in of in net a sales in government-guaranteed second, a the gains of due partially a in This gain million loan on decline sales had this $X.X million decrease decrease was

the quarter first quarter of Although, first also SBA. made than positively originated. the guarantee with trends loan last the contribution quarter, the the remained this lower The by to which us was our the increased loans when positive, from of in year. the of million above in see well which XXXX. premium increase volume the last exceeded was Even in the quarter, the The the loans XX% by result of the temporary of seasonality an average We as benefited typically compared government-guaranteed waiver normalized from quarter remains a group of the gain fee. enhancements contributions particularly from levels XXXX, $XX.X the we by business of and SBA, first loans SBA to the sold in expectations, XXXX, historical first XX% guarantee sell on on sold was of enabled our of impacted $XX.XX sale

Moving to non-interest expense trends.

in branch held first million quarter, million $XX from down to non-interest sale. Our consolidations included $XX.X and charges the was for on prior which the in impairment quarter, related the expense charges assets

occupancy primarily lower loan-related increase declined other partially charges, branch following the in equipment expense, offset and these This expense non-interest by legal an and consolidation. Excluding our was due to fees.

declined controlling reflected generating revenue in $X.X related our well success which Our balance second to improvement loan which ratio, efficiency sheet in origination we're was salaries in round while reduced was our to and to the growth, of costs this quarter, the expense our assets, down expenses The and this $X.XX. expense as million non-interest deferred XX.X% quarter to PPC. in by as is benefits having average

the the deferred Excluding run expect be loan costs, the range would expense our of for $XX to million in rate origination we $XX the to future. impact million foreseeable

to on slide Moving XX.

quality. take we'll Next, asset at a look

quarter. continued to during trends see conventional in loan We good the portfolio the

points declined assets nonperforming Our total XX of basis loans XX points nonperforming XX assets basis our points declined to points XX basis to of leases. loans basis total and and

government points and declined basis guaranteed loans loans loans nonperforming leases. of points total Excluding basis XX our XX to

held expense our with accounting asset PPP by unguaranteed guaranteed small our capital in in measured provision as liquidity of We XXX quality which the and loans our XX, reserve loan offset release million to levels due last in expected the allowance, and quarter, conventional a representing adjustments, the to be portion plus cash absorbency in loans. leases our million to for total of points from by measured down of approach was against $XX.X government the a impaired slide We which and strong. acquired reserve was resolutions acquisition reflects Our continue had $X.X total loss basis excluding loans loans. On remain portfolio. improved reserve increase improvements further flows,

quarterly earnings $X.XX along with capital dividend our robust Our of support contribution continue share. to per levels our

we Alberto repurchase XXX,XXX as did $X shares cost million. at a addition, discussed, around In of

remains shares you. Our XXXX program end XXX,XXX Alberto, of that, remaining. approximately the in stock until back With effect with repurchase to

Alberto Paracchini

Thanks, Lindsay.

small excess leasing lockstep the deal loan commercial in our XX, with seeing PPP amount for activity good Notwithstanding the the diminishing to capital. today since economic up of last and good good year liquidity sponsor slide impact pipelines for particularly we're estate customer pandemic. like of our about the healthy gotten to seeing We're and XXXX recovery the up priorities remain flow, start system, Turning with it I'd consistent to activity, remained and few and a in as wrap real and call. in off outlook. our picks We've business a the comments

to continue opportunities organization. good the We add bankers to also see to talented

M&A open a questions. On the the over well that capitalize returns to generating quarter. look in for and seen and the With both our that, on M&A for shareholders. fit and to in front, call investing we closing, dialogue continue continue for we opportunities please prior organic pickup have our In our positioned criteria opportunities, franchise remain operator,

Operator

Thank you. ahead. Please Stephens. begin with come first session. And question-and-answer the we our from And Instructions] will McEvoy will [Operator question today now Terry go

Terry McEvoy

Hi, good morning everyone.

Alberto Paracchini

Good morning Terry.

Lindsay Corby

Hi, Terry.

Terry McEvoy

think thoughts other are the first growth. we've I of all ran quarter? the maybe bunch second through commercial you increase and order in where looked know and expand out bit just at. what And what stood ex-PPP you a saw growth really rank releases on I the quarter loan a Could the based the drove little areas on you your for

Alberto Paracchini

activity, it pretty good deal broad-based. in was Terry, flow general. good seeing We're

can't above I that it's one say So that today area is and beyond others. the

flow good that solid that we area of actually and seeing Deal coming pipelines from seeing all business. business leasing good a our -- equipment we it's the on that good across but in we're win bid, building we're plenty also today, is activity think growth bats. activity really past, have I maybe and our an getting small And business, commercial relatively part on add which one But I at we're we're we time seeing that's of portfolio our we lines. over actually the thing been good haven't it. compete, obviously it's touched to would

Terry McEvoy

surprised Thank quarter-over-quarter. a just guess And these to through you. unguaranteed as Lindsay higher them programs relative all to portion as I reserve then call borrowers I'm support the there's or those was follow-up, yet a the enhancements that SBA you little ran

these to need see before guarantee what it comes my loan long speak? you I in down? unguaranteed a do Is is on So essentially to programs guess an so reserve And how question are place? that

Alberto Paracchini

head. nail Good And hit I question the you in Terry. think the

are a borrowers that there's these think lot of supporting I programs obviously.

these we amount come subside be stand want will getting borrowers the the how And wane fair see programs uncertainty time. they're cautious we up of to see without have the We impact those the programs think themselves. these and So of as I the as pandemic a side to over for borrowers there's out today that programs. on various other of from support these

Roberto Herencia

factors, that add, if didn't to obviously, may to look CECL covers particular you'll under the if much bank. see hospitality not they reserves Terry CECL the with segment. that those possible a banks, did qualitative down in the as And so go I adjust of we're everything you But

Terry McEvoy

for Great. my taking you Thank questions.

Lindsay Corby

Thanks Terry.

Alberto Paracchini

Thanks Terry.

Operator

will And with Please our come ahead. Ebrahim Poonawala Bank question of from next go America.

Ebrahim Poonawala

morning. Good

Alberto Paracchini

Hi, Ebi.

Ebrahim Poonawala

first just question allocation. capital just around guess, I

rest a bit a appetite stock’s, the execute. pace quickly changes in love authorization. last seen of we your terms quarter year-to-date. So of the saw in through to update we've Talk can of obviously, clearly you with M&A the as I to up how us an fair in activity. a first move similar And made buybacks strategic the that would guess, also to of the accelerate continue you you quarter was part pickup of some

Just do that not point M&A to By? you of, talk from a you're to announcement we us moving in or to see getting whether expect should an terms closer

Alberto Paracchini

Good a first allocation, your the -- On this. to flexibility questions organic first Ebi take lot we of thing have we have to I nice the look is I capital and I'll think support to think, crack return comment related capital shareholders. growth at

mentioned, just which plus is our profitability is touched really of it the the on about past lastly and trying of what earnings Lindsay quarter the on pretty point balance the dollars M&A. we're Obviously those just up, combination opportunities. buyback of second lot for to XX% this us of a is dividend you And all gives do then it good on that amount we amounts And with the flexibility. us. for the As quarter, spent to

capital, teams of we guidance, we a buyback our growth, an or of in deploy of whether certainly been won't continue the we And I have where think or but it that's on supporting to levels, do comment don't the acquisition be not what will M&A transaction capital at capital supporting going we find of and to return our uses certainly terms ways to then use we're to shareholders. So we if specifically flexibility. have it

On what front, add seen we've the since I a certainly I M&A spoke. we in dialogue I pickup would to think just said what is, last

-- price things would bid-ask things particularly what you that sellers come dialogue, would that's It's is agreement that's sometimes and know But usually how are where not these parties to I As part And to two materialize the immediately. with potential building an here have with that's a question. your relationship the it’s difficult. answer I more expectations.

Ebrahim Poonawala

Got margin outlook. XX -- around wanted core just wanted basis know just over out the it. the PPP just I the the make to was you the the thanks mentioned guess figure ex-accretion I the XQ moving What to -- But for yeah. margin total quarter? Lindsay impact increase XQ. I And margin this to what points sure was X.XX%. I

Lindsay Corby

So then XX had $X shows that deck PPP. in what PPP included of interest net was to contributed, that it And the we quarter, associated we there slide terms that attributed basis million was the that in chart a points this Ebi. also of with income was

Ebrahim Poonawala

it. Got

million. fees much two and remind of So loans and what's versus $XX the round $X round one quarter? outstanding how million breakdown -- And end at the the me that are of

Lindsay Corby

You bet.

the $XXX the of million loans of balance our sheet. of PPP have quarter, end on As currently we

the round need on about we to fees bifurcation second have million. the the we round, $XX.X of And have terms that the approximately for In left. first through $X.X million come remaining for

Ebrahim Poonawala

quickly guess how best your of And second in the I get forgiven? guesstimate round what's does terms

Lindsay Corby

Sure.

seen We've the along moving nicely. So with a forgiveness first SBA processing. pickup the terms round of in really is

of with the really half will Ebi, it processing in to commensurate and of how SBA flows terms be think the year, round, the going I be second Second it's speed.

half. to it's towards the I more think heavily weighted going So be second do

Alberto Paracchini

borrowers -- to XX as on thing to One have add there are weeks weeks. is eight round, Ebi the short as as long the windows as second from Yeah.

the that half to points of So, latter probably year. the somewhere in

Ebrahim Poonawala

Thanks taking Understood. my questions. for

Alberto Paracchini

Thank you.

Operator

with And go Michael our ahead. next question Perito will come from KBW. Please

Michael Perito

guys. morning Good Thanks.

Alberto Paracchini

Good morning Mike.

Lindsay Corby

Good morning.

Michael Perito

Is liquidity which will on second the all is to half mid-XXXs the range. as to the ex at quarter, has but to in margin with ex-accretion stabilize quarter piggyback the actually like correctly, the been deployed. PPP that But the so that it to was NIM make the in compress obviously, forgiveness, margin a the the second and reported in has hopeful the sounds you're that I fair It of then of a ebb back sure just understand that of basis, XX So kind relative moving it year points basis a sounds the quarter just along pace flow of more thoughts? like summarization decent will and first rate. room

Lindsay Corby

Yes.

think terms I the think and to it's GAAP so there headed. we've basis, it's really to shift more is going some and it's It's can give And securities a earning in some it's got we right you've from a gross where loans the hard on have the And, what upside I lot of into better. a timing. close. with there you're exactly and a mix. Obviously volatile do little got asset faster picture be you PPP But, all liquidity, upside, think the the you're and -- seeing. there. of I about And we cash

Michael Perito

then, And, the gain strong it origination Got seems quarters sized really platforms if provide some of are row SBA peer couple curious, And could pretty SBA a -- in nice on you've actually. -- you of of have just obviously I was a banks sale still the it. bullish had that activity. three of about like terms in your here.

guess there guess that SBA kind of PPP curious, platform there's the kind any a origination activity of? updated it provide mindful can should how still here? Alberto last real like we just any support be in seems if attractive, standpoint of you Roberto this So, of could structure lot mean question from loans but a the thoughts to I mean, I long or I how -- I is thoughts. long elevated

Alberto Paracchini

fees. precisely look, is Obviously, Mike. attractive. today reduced still But the It's XX% very guarantee hard a program to say

a still just So, pure of from a program. borrowers, cost very for attractive standpoint it's capital

good. volumes be pretty that are So the in short we still going to to medium-term, think

run we some piece additional of money are borrowers to out. demand is these those in second of got financing, program. PPP all from that for loans. in to that financing borrowers shape going bodes would And some loans. -- need you gotten that that have have form, terms I some at going way or The probably of those them, have add XXX% -- point to certainly are not well those which SBA And providing borrowers not is borrowers of but That

pretty So good it. we feel about

As we're this run. the a the that's long-term the not quarter SBA view a We've business you of so know, in long for next We're quarter. in a or business long take business company that time, been business. we in the

feel pretty So the about there. we outlook good

Michael Perito

Very just And ones then, good. last me. two quick for

Just tax here? going Lindsay, to proxy rate is the first forward decent quarter

Lindsay Corby

Yes.

XX%. For to I'd guidance XX% for that, say

Michael Perito

any to it. there's Got looking we spoke, are I if area last in time close seemed just an level bring rolling anything things strategic of from just the focus things And on general? looking terms market you're know guys in terms willing side, out or like and a updates curious, kind investment then, you're on that tech at? or of in updates was you high that or I anything new the of at, mean investments of to that

Alberto Paracchini

to Mike. to to it, we're -- We're projects going call mean I continue platform. to continue executing capabilities add to we a pipeline have on add we Yes. be of, our capabilities, that

buttress loans, additional side support have to to on. So, year and of we side on platform account the to We're for a the do which focused smaller new and to kind consumer the opening, SBA rolling it's by we're enable out on capabilities balance something do this able today being not historically business that example, platform we that going both online

be be now out the going towards PPP we really business, lending So and two we're Those established our we program. as of customers are rolling commercial with business nCino Last geared platform, have out a That for smaller will and rolled a actually loan implemented general. our year, examples. origination in to we that. part that relationship primarily

originate to exception across well loans. really organization the really as with leasing So, today government-guaranteed platform that we both the use and SBA as of loans conventional

the So, business that we're those pipeline. our are few to customers a things example, of online next the mobile of migrating -- migrating and in another just business examples our are generation platforms. We're

So that's in progress.

So, as the later are And that -- into highlights those are well some there that and next we're year. of then in things on side doing those some currently. we're planning tech the But the that the just year for of things looking highlights. of are as at

Michael Perito

flavor. lot the are that's your I and with have specific mix? it are -- out names, but appreciate these upgrades I a helpful outside or guess No, core like or color. your to just curiosity you just updates on of don't get of of core, they is a

Alberto Paracchini

outside of one is some. in with that's the mentioned There I There core. Primarily, are there core. our that particular

are of all ones other The core. the outside

Michael Perito

Interesting. and Got it. Appreciate, question. my Thank Alberto Lindsay and Roberto. you, guys, for taking

Alberto Paracchini

Mike. Thanks Yes.

Lindsay Corby

Thanks.

Roberto Herencia

you. Thank

Operator

ahead. go question Race Piper Please with next Nathan Sandler. will Our from Instructions] [Operator come

Nathan Race

Hi, Good everyone. morning. Yes.

Lindsay Corby

Nate. morning, Good

Alberto Paracchini

Hey, Nate.

Nathan Race

discussion, to you flat ex and to of kind growth just about back and so dynamics continues the to going forward? those kind remain process thoughts guys expecting deposit thinking the just any of sheet the of denominator that core kind margin the are core strong balance forgiveness unfold? PPP sheet PPP on balance slightly accretion, Going quarter, equation, well guys the of as had Obviously as in higher you maybe

Lindsay Corby

Sure.

So, here, do natural have on remind attrition depending Nate some our how intention off. We of PPPLF that. is sheet to shrink see well, and may to but not PPP just you it's quickly of the you balance as because coming the just

loan them could seen through great as funded here. in is to of terms and and shrinkage. cause well balance we really that pipelines the it PPPLF of some want sheet we've continue But, overall So, to the grow

here. And from to is so our intention to grow continue

Nathan Race

little of to and see year. over sold what terms the so over with SBA think XXXX? last the in forth, the a production changing volumes of cadence tend production SBA we of that kind bit Okay, generally I and year, And think the over exception course Is the way gears of fair course to that of of the just a the then course thinking expect build great. guys about and about year, maybe you

Alberto Paracchini

production So basis, performed the have up we the a -- expectation this Nate. business essentially It comparatively it's we just how quarter. good have was has seen year-over-year saw speaking That's on what we our seen in clearly, obviously because past.

So, the course of yes, over to answer answer what year. the we your question, expect of the kind that's is, there short

Nathan Race

do of thinking of an how premiums And secondary to it somewhat continue to to are go you about it. this guys in anomaly, or market is you kind expect kind expectations quarter higher, of the was continue guys or -- Got book secondary premiums?

Alberto Paracchini

this and time see I bids of internally Yes. we another will also, be coming if still and like at take is in, decline, are kind premiums levels were say, premiums see news The Good question. think But seen seems where never high, some us of normalize are think we here one attractive. advantage the they we we obviously look of is business that. good have every and high. to so It we

And when So, do or decline rethink holding these past, as have better not in would for either. off premiums selling the whether flexibility comes a to the off them. from lot, the it And certainly, to loans have said to agnostic we're we're that. pretty better we levels us we're to or we've

our on I participants I mean attractive. careers, mean, attractive today, to strength terms guaranteed of from very loans. So -- as very, we in these buy market seen as have but collectively probably in the are –

Lindsay Corby

being to did waived in premiums, guarantee mind. add that, the that's in and prepared that keep the my fee to terms to just definitely remarks about just I Nate, of in say helping and Yeah,

ultimate that is driven But SBA that their yet. not a them programs once the roll-off, see the the by the those little gone, bit is enhancements to is little the of as would still a that, completely off I timing certain uncertain given So funding end it's come and of still and highs.

see. So we'll

Nathan Race

it we've to from deals the going forward having something Got be think Yeah. I And color. Curious it. appreciate as kind could great back the several are M&A or expect seen we one discussions I discussion. That's you going that. to is similar past just about if guys you're you the just the going what that more, likely ask could years, of over more transformational? maybe guys to

Alberto Paracchini

on still that general $XXX in Nate, of that criteria Board transactions. in let's it area. the not way I would outside the for of we number say, our significant we've cohort the But million that market $X kind not we're of And there's banks would would billion to cohort the our think, kind in that, I banks focused is range, that. between something say I of plus. number is That's shared of kind of the – of terms that, them say to consider what M&A say, a I and of are certainly, think think

that's we're in Board focused. where our not that. would say that's something But of So to again, not of really kind that, outside considering have flexibility

Nathan Race

Understood. you I the Thank everyone. color. appreciate all

Operator

Montgomery. Brian will ahead. question come And Janney from with Martin our next Please go

Brian Martin

Hey, good morning, everyone.

Alberto Paracchini

Brian. Hey,

Lindsay Corby

Good morning, Brian.

Brian Martin

and improving just most kind economy has it you I but my building. outlook guess, can just stuff of on I'm mean, for been – seems not I you on of seem with answered, loan Just reserve, the very like but the the the pipeline whom, sure optimistic

needs I of if kind SBA they they're the that you've as be. enhancements, in working reserve and to should, Just to where built curious the guess,

are about we I you here the and think things to reserve play guys going continues forward, how guess? as thinking if Just, economy the out kind of improve

Lindsay Corby

Sure, Brian.

SBA, I in enhancements. regards as Alberto We remain So said yes, there's to think the cautious.

the or overall, payments And that happens. ultimately look with regular as to out going really to and of just to enhancements, what terms frankly, stage status, that forward is far growth we be certainty the the these subsidy our ultimate in going getting just if the So, we're be of it's provisioning setting deferrals, that there. as back commensurate But SBA comes whether seeing. payment

definitely just uncertainty, and we still because there. of So there going from level a it through follow to think cautious, are we're is I

we'll so with where feel happens, what we reserves And see we're are but at. think I adequate, comfortable feel and we our that

Brian Martin

What's clarity of And borrowers? of SBA, clarity you kind just the more of programs when have a the on timing get of is from on condition and the on to as last? credits long you'd might details expect kind there how as those Lindsay, like these the time it more enhancement where that, far

Lindsay Corby

You know, with Brian it's day-to-day SBA. the

example, they not with taking just came yet and Revitalization applications. Fund for still the that So out, are Restaurant

don't else? a I over say Things have to give you next, know, definitely two I'd the So it's play or perfect quarters, answer. Roberto, anything out. three will to hard Alberto if you

Roberto Herencia

thing mean, sorry. – I the a – one I I

Alberto Paracchini

Go ahead, Roberto.

Roberto Herencia

Yeah. exposure right, we I restaurants hospitality, remember, say have The thing, is, business to its one going the Brian portfolio. SBA was that so mostly in the

I we're still in still think So slow. the The pandemic, right? are restaurants

to will would of a visiting again going think out improves restaurants point economy better as start embrace that the demarcation. and So indication and be I a be really better people

Brian Martin

Got you.

mean, just and getting I'm vac the on putting sounds getting maybe, has Okay. Where the about is And all kind momentum that in other guess so. though quarter the loan lately on or I been the least makes important that that the as That loans at the at? of expectations given today. and that vaccine I current rate is And just sense. your is current follow-up doing out for or competition was you're market last and building me, growth just everyone that yields, but one how here it in loan so? thinking

Lindsay Corby

Sure.

So excluding of go quarter, down yields, terms they the loan Brian, PPP the for did in quarter-over-quarter.

they went were and they to year the the at X.XX%. So end of at X.XX% down

seeing are pressure we there. So some

of we more about the of New a there. X.XX% so seeing to coming pressure loans are in bit range are little X.XX%,

Brian Martin

Okay.

Alberto Paracchini

I a seeing the the a we're that they those the very little I general transactions real Brian, bit commercial say, bit. were strong. the said, said, just quarter-over-quarter seen quality would compressed are, is capitalization fourth compression. spreads compressed Lindsay estate, businesses being the wider to what some structure in spreads in to so have That example transactions of on add characterize quarter, of last and in a fall, basis, some say, for spreads that would would I we've

Commercial for of some really say, still to for creditworthy – the as there's borrowers still So pick there's have are those the it's fair you we amount normal in market. particularly here the set a looking only up banks, disruption in and that market, there's competition borrowers, is new it's competitive, that have always seen expect companies of to and the of effects that. would

whose competition. And matured it's that longer-term in going So you again, have attractive draw market, lines and or business, in to out expired C&I that's and that's have a less the are transactional. facilities borrowers,

aggressive you to us those in this last wanting going from general pricing to that, in been be can But I quarter compared to examples are of to say, quarter. be people build acquire So a that customers included, pretty people going has would aside outside are consistent long-term with. relationship

Brian Martin

you. Got

taking appreciate Okay. the I questions. for Thanks that.

Operator

question follow-up Perito KBW. will be Michael And our with a from ahead. go next Please

Michael Perito

guys. Hey

Sorry.

revenues And Just would just just a forward? helpful. more a give to quick a model, kind four it through one defensive revenues color quick or seems going lot follow-up, extra on, were looking high-range is that SBA positioning, this talking provide comment where through of give, I five more of broader on Is just or you you curious, stuff. for think the they've be just mean a in that us market could years. that was it little a could looking being going -- the been the that in pretty the type disruption the I as now. there's was on market target, -- still a grow whether last like, And line you for of share return could share business a maybe of for or in you marketplace if I right we

Alberto Paracchini

to that Hey, take Roberto, want you one?

Roberto Herencia

side of Just this the off with the USDA the we traditionally the to We're idea There time right? XXX, and And getting business, more have. lever and last to us paying haven't platforms we the weeds there. is right? the we're efficient. expense into a the Mike, other as, what to, base areas focused we SBA SBA Happy of talked make revenue business of about grow And as have, plenty for the is which room in we such been attention on. little bit that

has good potential for we believe, So revenue overtime, that us. really this business

Now, a business. down mentioned. and little of business But the it is premiums this right, the be plateaus the bit, bit, If mix which may will the revenues. to X(a) would right bit as expectation, side Lindsay a grow come down revenue bring a change little idea

Michael Perito

for it That’s for helpful. color. it, Thanks guys all me. Got the

Alberto Paracchini

You bet, Mike.

Operator

then, question-and-answer are the the over turn I'd And remarks. there for back session. questions, to concludes management, any no closing to so further this like conference

Alberto Paracchini

Thank Operator. Great. you,

morning. forward think that your speaking look our interest call. the next today to I Thank that Byline participating So Thank to will Operator, concludes in the call you this in that you And for and call. And we again quarter. concludes you.

Operator

conference now you now the Thank may for you. time, concluded. today's has attending at presentation. this And And you disconnect. Thank