Byline Bancorp (BY)

Brooks Rennie Head-Investor Relations
Alberto Paracchini President
Lindsay Corby Chief Financial Officer
Ben Gerlinger Hovde Group
Nathan Race Piper Sandler
Terry McEvoy Stephens
Tim Switzer KBW
Brian Martin Janney Montgomery
Call transcript
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Good morning and welcome to the Byline Bancorp 2021 Third Quarter Earnings Call. My name is Sam, I’ll be your conference operator today. [Operator Instructions] Please note the conference call is being recorded. At this time, I would now like to introduce Brooks Rennie, Head of Investor Relations to begin the conference call.

Brooks Rennie

Thank you, Sam. everyone. morning, Good for third you today the for And XXXX joining earnings Bancorp quarter call. Byline thank us In accordance Relations with and Regulation the FD, this call slides. via our release on corresponding with presentation is is webcast our along Investor website, earnings and available being recorded to that company. future the would involve of made the call certain financial on or like Management or future other events statements today’s projections forward-looking remind everyone statements, regarding performance that risks, We cause caution discussed. are statements to and materially actual could that factors differ subject to results uncertainties other certain such for those its factors filings. The disclosed company’s risk are and discussed within SEC

In can addition, supplement, non-GAAP but and found of appendix be Reconciliation directly release. may to measures, for, substitute refer measures. the most within the certain to slides earnings contain not comparable the intended numbers which these are GAAP we for

For now and additional the release. President and non-GAAP please the to measures over Byline forward-looking Bancorp. Alberto like I call turn statements see earnings information disclosed conference to in risks financial would of uncertainties, about Paracchini, the

Alberto Paracchini

you. good quarter the third all to to call And morning of our joining you review results. thank Brooks,

Joining Lindsay and Chief me CEO, Officer, Chairman our Credit Fucinato. Corby; Mark our our Herencia; on call, Roberto the CFO and

for to the Turning the highlights in Slide quarter. over for the X financial deck

outstanding few number will at more providing but a Byline much by of a is results, our As high practice key Lindsay driven on areas another detail trends start had over be quarter positive going our you in with areas. I to level. by want a

growth. very loan had good we First,

growing investing to return strong us quality, well as expanded stable quarter; in which combined Second, the internal and capital with and nicely continue business our third, credit second allowed the generation to capital shareholders. had margin when from as we

million reflective our the was bit marks $X.X carried Our quarter can consistently $X.XX share. results value share. servicing down asset, earnings, us $XX.X $X.XX than given per up Fair in and a mark This about cost part or our value on from which quarter. go include our not lower last business a a which of diluted but fair per of are on recurring came net the at quarter, million in second but the income over quarter,

quarter profitability return a Digging were bit the basis and reflective year Our materially ROTCE basis, a translates from level here, bit of capital was XXX which across XX pre-provision basis excellent XXX X.X%. profitability the the period. a but basis revenue year points. link as in of million, ago metrics came and strong well management pre-tax lower of XX.X% ago $XX.X board. at ROA ROA points, in on pre-tax deeper into of points than at as a was which up came pre-provision higher

to the sheet. on Moving balance

in quarter and saw third continued deposits. loans The both growth

This the end. from during the of quarter by record A quarter. XX% the driven our the $X.X of we the and diversified momentum were or increased million the is million we growth. and stood for seen $XXX loan and consecutive production PPP, quarter. million loan quarter have at had billion company in level as prior up in where significant second Ex. $XXX PPP CRE having businesses $XXX in lending lending excluding results as C&I Our strong a across platform. lending by and value equipment board our as across annualized Loans, well Production leasing, business. government-guaranteed sponsor was

we’re which very in gets to from the which position being is and banking to loans. investments marketplace. payoff expect coming we us our We the see benefited $XXX starting loans see of goal million, in grew PPP note fully made balances we’ve profitability teams contribution able replace ex. Of our from in quality year-to-year On conventional bolstering with a improved lower the some to than close PPP by of to also our expected quarter. basis

market and maintaining line Our was quarter, and saw growth remains Demand for equation does is lines. said remains happy the credit with balances. which growth that relationship Customer the us emphasis and use particular competitive. healthy reward trade-off increase to Price discipline XX.X% CRE drive quarter and last XX.X% with customers That another utilization and some additional and both multifamily positive namely commercial are this generally risk credit make structures. sense. of standards market new remain in in their categories, industrial on credit the additions the existing with certain from to lenders We notable. C&I activity consistent help we’re increasing in if commercial competition

record lending million We XX% expiration worked business guarantees quarter $XX.X compared increased we from quarter. at Gain end really of to at got loans higher prior certain to our million the the on of sure the the benefit quarter. and prior prior lower quarter up a in end. customers hard income make $XXX with X% to to production had government-guaranteed Our closed loans, sale under fees subsidies

the the of in market business, remain the and to largest in the continue government’s XX as States. X(a) leader September on United year-end lender fiscal We fifth this we’re

new $X.X to quarter. grew Moving end. by inflows of in annualized X.X% $XX clients. deposits of from the to existing to the commercial among billion million side. Deposits relationships respect the strong quarter at from liability stood And With buildup as of commercial or see over continue third deposits, addition and the liquidity we of

growth coming from the With market money primarily accounts.

remains costs basis low. Our on DDAs and XX% Deposit be total exceptional a cycle were at with a balances. deposit mix quarter-over-quarter flat representing to continue of

was full with improved on some continued gaining but at also first we’re by digitally the seeing encouraged consumer quarter returns the technology early we our traction the deposits well are as and investments. modest as rates point, seeing growing started quarter Results conversion digitally of we’re opening This deposit this accounts.

which on PPP, was at of year. expanded potentially exclude income, XX to It and very expanded higher Moving point also loans some higher ex on nice to and yields and well rates the margin next accretion as point reflective if profitability, by basis for was our see basis of points, securities. six you drag positions

Lastly, in a percentage dollar points represented or basis both what quarter-over-quarter of in and reflective basis levels variable on are again XXX tied of our the very despite results compensation seeing combined of ratio quarter-over-quarter terms our XX our the were production From the with in points and decline market. liquidity at and benign basis good. the rest allowance environment of XX% remained XXX costs, higher an points loans environment. excluding and current which NPAs a and the NPLs to coming efficiency credit standpoint, reflective been were in range effects quality PPP. asset Charge-offs basis some decline and of ample has

with and XX.X% of capital total remains of Our strong CETX the ratio quarter capital of ratio position end. a as XX.X%

capital level in Lindsay, our Given XXX,XXX balance organic sheet strength positions to call were during support more investing opportunities of to We capital, turn repurchased positioned provide approximately to who’ll shareholders well we detail returning continue growth, our M&A of and franchise while well With strong on would over shareholders. the return the believe to capital shares as our pursue you to I our common that, quarter. profitability like stock. our and We results.

Lindsay Corby

Total morning, everyone. loans our XX, the of on with end of I’ll $XXX Thanks, X. portfolio Alberto, or information Slide an September on loan annualized good prior at $X.X quarter. some from million increase billion XX.X% and additional leases were the start

and on offset forgiveness the line As increased the utilization more had in we earlier, PPP runoff loans new production than the acquired Alberto loan the portfolio. discussed and

equipment PPP estate In quarter, our and portfolio. core growth excluded, over commercial well-balanced in the saw commercial, moderate mortgage XX% us reflects first the client to we real loan across our loan million payoffs mortgage the million. commercial addition, portfolio loan of for offset continued the helped our the leasing, residential runoff $XXX loans $XX down base. We planned portfolio our residential When saw which and year, originated increased growth past which are

we’re which up XX respective in forgiveness, Page We seeing by the respect XX% our provides past to page over we and be a loans, on in fees continued round. encouraged appendix have finance equipment to included balances, that With the the from business, is on demand details year. the PPP the

$XX our the look of XX prior on-balance approximately quarter business. we’ll million, X, At lending being Slide USDA the up on million SBA the $XX is guaranteed. the The the end sheet government-guaranteed $X guaranteed end was which Turning balance SBA. $XXX million million of the sheet $X by than exposure was from with at prior lower X(a) $XX million exposure quarter to September million of

payment the following status, recovered trends As with regular expiration the from borrowers subsidies. improving periods of portfolio see this most pandemic, and we deferral to returning economy the continue to in

we’ve prior unguaranteed of percentage a just to quarter. at the decreased balances As result, X% a X.X% our loan allowances, from end of the slightly under the

continue economy and the However, demonstrate we remain small vigilant more to resiliency. borrowers business as

X. Slide over deposits Moving on to

our million $X.X $XX end The quarter billion. deposit cost lower increase categories. to deposits came growth total Our the prior the in of to from

that to higher replacing deposits. continue see commercial we As inflows time transaction are deposits of cost

As expected eight of our points. deposits cost remain flat total basis at

Our a continue in deposits our about deposits. represent deposits. to increased XX.X% of and while our during shift commercial deposit result total the half to of Non-interest-bearing positive quarter, total deposits non-interest-bearing reflect activity mix XX% of in of deposits deposits and

and margin X. Slide net to on on income Moving interest

third million to XX margin costs. funding slightly $XX.X forgiveness and income from our was PPP well interest interest third the quarter. loans third the was yield the The average fee loan $X.X to loans, PPP the due also QX to quarter. On margin quarter. income the up lower This the quarter, basis, earning the quarter in X% contributed XX quarter. balances prior net points interest basis higher basis Accretion contribute net assets. XX from the as for Our last of million on nearly on quarter, as on from income was and and loans, the GAAP margin a higher last acquired higher basis primarily $X.X last quarter basis the average X.XX%, net to points point interest nine benefited for compared million income from for improvements points combined income to up net

result production robust during shift As of assets of loan the a the quarter. continued mix the to earning as

should margin exact reprice. its stabilize from of margin, margin the the a believe timing yields timing as see and of our compression processing excluding SBAs the forward, process rise. as anticipate PPP though, for Looking $X.X core that to may GAAP interest net to accretion our fees and to dependent rates loans impacted will result upon and net the PPP increase loans begin amounts begin the million by continue We be forgiveness. are lower remaining We and

asset approximately take of higher future remains the invested variable positioned XX% Our sheet with balance in rate and loans. to the interest we’re in rates sensitive, well advantage portfolio loan of

million which charge, increase quarter, write-offs. the on was an payoffs in of on quarter, early of the a to $X.X This prior a pricing, downward valuation net to Turning by partially the higher third in and Slide quarter, strong non-interest loan loans from the million we sales. market upward decrease quarter. servicing due $X.X the the asset our minor third by quarter. income $XXX.X revaluation net change servicing did offset a to of in This see prior the average quarter fair volume quarter. slight decreased X. In gains attributed was of $XXX.X million loans income was in We be servicing quarter, asset as up to loans the the decrease non-interest was primarily secondary adjustment in for result sold second evaluation end sales premium the of during a continued adjustment to compared a asset of value lower begin the to a the million at The to due although, prior a XX.X% from

ended Looking returned new lending guaranteed back originations. XX% loan enhancements government XX fee the from SBA was has September the forward, portion waiver for most and program XX% guaranteed and to discontinued the SBA for

to beginning and as pipeline for we guaranteed remain loans investor the return without to to in decrease historical fact the averages. guaranteed anticipate But begin do sell of more strong. XXXX appetite premiums in fee loans waiver, Our government we and

expense trends on Moving Slide to X. non-interest

factors. was primarily $XX.X $XX in in prior was to quarter. quarter, third two The million Our attributed expense increase the from up the non-interest million

expense First, efficiency increased prior due quarter, to And non-interest million, hires the new adjusted to basis, improved during to from primarily an was marketing salaries year and quarter ago mainly quarter. $X.X during our increase commission we other the higher the up our benefits due but an second, saw ratio On XX.XX%. from a and increase by spend expense. expense in

on for focus our and we to efficiency. review rate will We continue expense to run continue

will believe additional remarks. increase As per slightly run invest We we million touch our talented continue the quarter. that including his closing to Alberto trending employees in upon team, between in bankers expense the $XX and quarterly rate $XX will and million and begin

look at take Turning XX, we’ll Slide asset quality. to a

trends continue during quarter. see the We to positive

basis XX loans OREO the points decreased loans XX loans basis in Our decline five points also of million excluding assets. to loans of declined basis and total leases quarter. government guaranteed points assets basis Net by five charge-offs points non-performing leases. to of basis and total basis XX non-performing points points from $X.X declined are average to XX and prior

improvement. XXX,XXX compared of mainly during an by a driven loan to of $X.X expense The third release leased was of growth million quarter economic from factors the the provision the for million improved qualitative quarter. provision of in was Our quarter a origination resulting a million increase new by and prior $X result offset $X.X continued provision as release

by of adjustments, leases excluding total September plus XX. a continue PPP at high basis our measured loans represents We and have which allowance points XXX as total of loss accounting absorbency acquisition loans to level

to Slide earnings and our our capital XX. the first months stockholders on our stock repurchase through returned year, to common have returning Through Outlying focus share the Turning and of the our XX% of program. position approximately dividend nine we capital.

our be our during we As continue authorized program repurchased. capital, with mentioned, these capital million to X.X to remaining repurchased believe million position. shares. and reflect quarter, have Year-to-date, We we have X.X opportunistically shares solid deploy shares actions repurchase we Alberto the our to approximately the expanded

grow the to strategically. both while continue back you. generate flexibility capital Alberto, we to allowing As and organically excess to us

Alberto Paracchini

Lindsay. you, Thank

objective. Slide remain laser quality strategy, our We across lending on loan achieving businesses on priorities priority, to XX. support top add talent remains focused our this growth to a our continue ahead executing Looking we’ll organic and to

take manage company great built We investing an growth. and of and a to market culture, with base At in eye our we’ll the capabilities. digital with have in continue time, for out expense have order our cost same to a the ample platform continue operation opportunity to room

capitalize Lastly, can add we to the continue to that want franchise. further market opportunities on to value

we’ve talent non-revenue previously reported the of the past, we the to been years, As actively in revenue to several both last and over generating company. in you the areas organization adding

added, and leaders for was business as our quarter no new exception banking. This business we both for wealth management

out looking the In addition serve to ourselves our organizing really to banking an business, in at business. is we’re then requisite customer and continuing best well our us marketplace. customer way as commercial that Business in a bankers positions the banking and the to add to with of approach figuring critically example who capital trying a segment. effectively possible to particular to coupled This serve the compete business size scalable platform a in strength, is, with

wrap franchise. continues our on outlook continue front, to criteria market remainder evaluate our M&A XXXX. with we environment can be the and of I’d like and the and value fit for to active, comments On market few opportunities, to our that up the add a today to the

and supply year. year surging, dominated about the in quarter into variant this latter Delta growth the part chain and do of remain optimistic While challenges. next of was concerns third over We

In of for from closing, levels the thank the that, heading to the liquidity, their call market pick and to yield Given our level remixing to up all of the dedication strong, assets position year pipelines we continue you off in Notwithstanding our our well looking hard up this expect Operator work ability from our and continued into quarter. XXXX, our the like in our free we let’s stakeholders. payments remain earning today, saw activity finishing additional loans. our securities franchise employees for in I’d and continue which and the all portfolio, for the us for open growth a also to growing continued strong and serving to With to shareholders. to for position questions. value optimistic of creating we’re say we’re


[Operator of you. question Gerlinger Instructions] Thank from Your comes Group. line the Hovde first Ben from

line Your open. is Please proceed. now

Ben Gerlinger

morning guys. good Hey,

Alberto Paracchini

Ben. Morning,

Lindsay Corby

Ben. Good morning,

Ben Gerlinger

a banks. could quarters last higher we the of seen if landscape two view, wondering, you’ve banking take a or so the the call, was I just for level bifurcation

growth, are seems of in are lending to to seeing to both. able Byline in on Some some somewhat yields order terms It do Whereas also defend lower capabilities. to the loan growth like while strong you guys be seems pull loan willing willing stable go increase margin. have where pretty order encouraging in to back to margins

keep growth forward? should that So, I you future forward, kind think think there’s different to stable excuse a focus me was wondering, opportunities going on of area lending of keep stable, do – more that provide do future or upside niche a an going kind margin to the is and you

Alberto Paracchini

Ben. question, Good

we our believe view a is, and lending diversified think on business. strongly that I having

quarter having provides have second, of flexibility all stability going of well. very two not good those really but It quarter, overall things. it the we to and be to case from lending as this benefited single a It’s and provides So in provides diversification yield businesses every quarter. terms originations, it

Some of businesses are those growing.

were has for is obviously, Some that Other diversity that, sources we businesses off lower think, having large say idea I yields. yields pretty have businesses I of margin business coming forget And depending well had, would well us also of stability as the years. the over The serve. is, on as of and up type higher to don’t that looking those relatively origination thing in we’re the the that, last and something the off diversity position. and borrower paid type having generate supports, of we

assets continue margin. some securities it Obviously, our been had to earning Our can into security loans, adds if to we elevated. tailwinds portfolio remix from those


Your Race Sandler. of Nathan comes from Piper next question

Your line is now open.

Nathan Race

everyone. Good Hi Yes. morning.

Lindsay Corby

Nathan. morning, Good

Nathan Race

the obviously growth discussion, growth really back in broad going the strong, loan Just quarter. to based

think factor growth. was line in the shared also know what’s But mentioned increase around that I curious that how coming from in some kind of for growth of terms utilization we drivers well. gains about color as a get this curious, how of you can much Alberto to So that is quarter. the

Alberto Paracchini

Nate, a couple of things.

of as had So the here in that pay third why didn’t in few tailwinds, than obviously quarter. benefit growth, in quarter extra some I a comments. a loan fourth reason that. no expected. terms downs happen see Prepayments in the for the the We of question suspect mentioned we’ll strong in I lower we about came quarter

that helped So certainly a us bit.

something quarters. is that to down some have coming over to were think last with and mortgage Obviously is we other that Lindsay and portfolio is, that And relaxed been several quarter what the that a the had, is in I residential last the with year added talking thing first balances. this much mentioned that higher, runoff speaks about that we’ve portfolio as headwinds, year, when the particularly smaller. obviously of portfolio prepayments

So of of starting to subside that effect is it. the

that over pipelines contributing and origination the really, since sure it’s for in gradual we’ve that a in thinking other we about add been namely context we’ve years into that, is, today And starting business putting and I growth bankers as something the our a buildup. year, been to is, the see we our several banking was know, past. lot in The making building thing also and bank. have really would last say We’ve is, and, up. last given really the building, adding benefits really are I talked different size we’re years, to you I we’re that of thing are this of And last The of in the teams the been would been form that’s have, example, sources in think end contributions think reflective bank what I our our quarter. this growth that on the those not focused there, making platform loan is seeing that leasing

the margin lot Now a at it’s contribute starting more. to

to speaks benefit our going good single a had in good lines every to this to So the businesses way diversification aggregate, fortune lending really diversification of quarter, the that the that going of and quarter, these not back but of all it of we had platform. quarter it’s be

Nathan Race

Got great it. That’s color.

going high those put growth our reasonable about single-digit all thinking kind just pieces of kind of of in forward? the for And trying together to expectations terms so assume to outlook,

Alberto Paracchini

still sticking number, to We’re that Nate.

Nathan Race

gears just the trajectory outlook on contributor be of then And maybe reserve the for curious the about to going great. charge-offs continuing Okay, of forward. your get forward SBA updated Obviously main going changing thoughts be unit the to thinking is to the and charge-offs. kind

thoughts kind reserves need hear within SBA going the of any the and level on particularly provide relative unallocated single-digit your some are as just just roll forward, to off. that to absolute years. were charge-offs the from So that just expectations subsidies for of built of still would reserve continue last And high love what over the maybe excess up to unit some to context, for the kind growth couple that

Alberto Paracchini

good Yes, that just unpack And so ways. a question. me let in several

about questions charge-offs. your First

where there speaking the question the overall to We forms. benign. The a been think stimulus the the economy of and for credit made, mentioned that is the still, Lindsay credit has think are. that has environment and word had you reasons is, benefit many has the vigilant we I of very lot had and I the benefit exactly comments as

So borrowers make extraordinary. this we good off want that period, sure of are as has off completely, been stimulus a which have that coming wears we how really understanding to

to point, concerned. reserves are that remain cautious vigilant far with respect continue in as we’ll as and So, to

concerned In we where the in of immense marketplace the presents I There’s charge-offs looking yield. terms things. situations or advantage of form an in It’s are market. of, will mention look of about the to And that. exit is you certain we other a amount an that credits at and for opportunities to have you degree opportunity several have take that would that you to that look the that something liquidity thing

is, last I’m good what over been have very several saying the quarters. think, I charges So, there

we point think are anticipate at we’ll of continue have issues gets take, look loan to we obviously, to We through will and as if of continue Lindsay your reserves a on the of and to good at built and level reserves. level environment. see right I’m the she potential we opportunities have growth, And to take adequacy point to this, closely But that the on touch lastly, that question. sure this growth, Nate advantage

assets We’re from risk weight. remixing as are X% those pays seeing of down. standpoint PPP a Obviously a weight risk

we portfolio, we our in book have as we’ll traditional, So, commercial – loans growth.

provision to to going growth. obviously support that We’re


Our comes Stephens. of McEvoy next question of Terry from line the

now is line Your open.

Terry McEvoy

morning, good Hi,

Alberto Paracchini

morning, Terry. Good

Lindsay Corby

Terry. morning, Good

Terry McEvoy

this guess, hate of or portfolios the I and at growth come growth from loan another much ask about legacy you quarter, market did, that you growth a verticals teams to your in there. I’ll I new but already question, on Did real start it majority last estate commercial call all, see run the and you’ve the lending talked specialized that and call. middle

Alberto Paracchini

saw activity both, Terry, up. customer we’re both things C&I our legacy Two good seeing business, we growth pick in

I year. think had very commentary beginning been probably the where heard utilization at to was the online certainly nice That particularly see the of utilization. you

nice customer we’re purchases, and call a also it’s – also see equip that, we’re equipment a to just add seeing again, So, existing it to which from to core, base. activity, a, of customers expansion new resuming our lot

So yes, yes. is answer the short

On the industrial real well very is multifamily, The estate we’re asset rest good narrower, side of meaning, in particularly I the quiet. as as classes think are activity, color seeing is everything there else. more the

not a lot for there. seeing example So we’re retail,

effects. from I loans And having to pandemic reasons, big capital market mode, the certainly we’re for office and lender, again, in obvious see settings that we’re wait given the hotel not capital standpoint. an challenges think some an but where a but for think office big in asset access to office a I a lender, is is class not a that’s that’s area

Terry McEvoy

Appreciate SBA, net go maybe gain that. to there six on risk us maybe Thank given little just could a been more strong remind just Lindsay, quarters? the demand given spreads a last premiums how supply premiums four you and the over or and And that levels sales you. they’ve what of below within then issues normal bit is

Lindsay Corby


best normalized to and we’re is to to that honestly much state today. was historical our Terry, more than back, go So premiums a because that COVID, at the previous just performance way what look prior seeing at look

to seeing think did this you slightly. points So, it basis we’ll a we did probably dip from point see quarter, be down XXX basis XXX forward. going somewhere to And decrease

the anything is you gain and variables and above mind production government, a first by think just XX%. about premium. the share of then the one we sale, really, So that’s obviously XX/XX on as the when with it’s second and it’s, reminder, Keep in the driven

from premiums above if down on XX%. just share dip we So only gain sales a standpoint the do

So less of impact you there probably so. an than think would

Terry McEvoy

Okay. how working that. was on next new one a success for in. banking group? Appreciate earlier I’ll with rolled then and out more was And the product squeeze some you they are What’s expense Byline’s on call, year, that the for just could side mentioned on I digital budget comments Thank much spending think tech your to and and any next as relates you grow? it as about you. what

Alberto Paracchini

to had today, which the I see introduced table that Yes, No on banking digital ability to the open nice something is It’s we think side. problem, is stakes Terry. accounts.

traction it were that we we summer. consumer in the And That's for there. and only some of it's kind testing had to us earlier So, side. the like on – the middle we nice did getting of while a see been

of So accounts. really that next project evolution that for is the business enable to

the on. accounts, the maybe come of open a end quarter, process business that digital small quarter ability in nuts next beginning So soup period an And on is working in the year. fully the to next those expect first the is end-to-end towards the what the sometime, really quarter, we of online to second team of short first time will

Aside about ways I into digital comments that focus in we to a made so take be area. will is the costs continue continue invest from that, that – operation, find and to earlier focus And are to continuing be the of area, that big a speaks we Terry, to to and out that continues the can space. to call

once spending, percentage our to So, as base, just and were deemed that question that trying our does operation of in on they capabilities. out or to important impact? What areas is, spending by we're about do digital be are how investing your as those by to the customer take not redeploy costs obviously

Terry McEvoy

have you And weekend. a Thank both. nice

Alberto Paracchini

you. Thank Great.

Lindsay Corby

Thanks Terry.


Switzer question of comes Tim Your KBW. next from

ahead. Your now go Please line is open.

Tim Switzer

Hey, good morning. I'm on for Mike Perito.

Lindsay Corby

morning, Good Tim.

Alberto Paracchini

Tim. morning, Good

Tim Switzer

any the leaders? on you a the then XX.X the adding little that's loan, I ones volume if land, on you've adding expense where driven range. question higher XX, continue ask are wanted to you to new Is bit but guys top already say in outlook, higher. probably assuming expense of bankers, that by if a hires, also business hires your is could expand made? moving largely new additional And I baking And guess

loan comes growth expecting. or you're in doesn't quite expected, on as So sale, gain as stronger than much moderate

Lindsay Corby


So guidance expenses, the of that given were the end that the around on keep in was terms additions. discussed the that, in is with brought Tim people and really the to everything reason those increase, XX, that mind that's And incorporating that where towards quarter. those for XX just of Alberto the

we full don't of have So, a rate run there. quarter

that guidance look teams continue in in front. say to forward, So and of on just bankers new will we mind, terms new and continue as to that ads, update to going add keep our the to then I'd

market So, we do see around obviously pressures in inflation. the

the terms slightly the guided one of just that's And that what's to due in higher economy. outlook I've of other happening so in the reasons

that little I more So, that. around gives you hope color a

Tim Switzer


hires. include doesn't necessarily additional So

Lindsay Corby


Tim Switzer


Lindsay Corby

put we that Ones out today.

Alberto Paracchini

just bit let talent. of pretty add when comes opportunistic said, that, color it little to to always been me Tim, Lindsay there. We've what a to adding add to

it. if we're – have business We're we the so long-term, going right the that's we do and right good going to invest. the for the right opportunity the and find if person So, to

if given able but us our it's little from being of to the higher a talent as to result we perfectly are hire a predict incremental So were organization. hard any – to fine, on quarter, that, expenses

that. to context to So, add just some

Tim Switzer

Okay. have Yes. criteria at have guys kind you for of could please talked you'd Thank about that guys And target M&A a exactly what quarters you looking are now Can and potential us in I if and reviewing a you you be for? Great. more, market a Thank opportunities. of couple you. looking what kind for one guys remind active you. are pretty

Alberto Paracchini


that essentially the very has that been the be for of deposits, where degree markets amount we and deposits that us to of are, the good area whether going typically business current the a tenants the given for acquisition as fact a of banking strategic take just the obviously always as, can an don't franchise out an lending in is always like typically ideal that that, liquidity to we're But of focus drive the be sensitive looking complimentary presence the from of we really environment about look said have incremental higher through potential franchise. in target deposit costs more to So plus that's some where for a and another strategically, that strategically has operation profitability consolidating that's, we're ours, a then – fit, we basic despite just system. obviously we well not

more strategically tactically. just that's So

the in $X I Size wise, be think, – our $X.X million million Metro targets for market are say to way range. billion somewhere all would greater general call institutions in it would Chicago example, and million our Milwaukee. the $X.X which area, $XXX I to, area to range the

I think financial far the think and franchise, of looking, that's is this been zone. quality are, metrics, as disciplined. the And within dependent we've on certainly as I we're strike the but, those

we've the backs transactions of that inside we're that on done kind and that's you depending looking for. in of three criteria And for at a years. the If less the of more snapshot we're quick looking or quality franchise our what certainly past, earned look of

Alberto Paracchini

That's you. Thank perfect.


Janney from next line Montgomery. [Operator of comes Instructions] Martin Our the Brian question of

open. is Please line proceed. Your now

Brian Martin

morning. Okay. Good

Lindsay Corby

morning, Brian. Good

Brian Martin

I maybe comment, thoughts the See, couple a margin. your on could just clarity comment Lindsay, your on just just on just if wondering you for things,

ex. the that land Just, did kind margin is this – the level about we just can let here? this comments ex. know, accretion, go quarter, where just or baseline forward of about PPP, us think you your to as

Lindsay Corby


that'll what and But repricing to that's near really do. compression we're term wanted as continue it terms So, tailwinds but one the know, coming the when margin, mix headwinds, the securities the asset you slightly the to the loan hit it is about that, comments And a out slight that the the liquidity that in – even earning say the we've that drove unknown the we've reasons it, you several And great that did compress modest. something really margin margin that my The of to we been was give has just talked about times those great, and obviously of really of because very I'd And that time for of back and seeing. the really of deploy that the despite call. Brian, on during out, margin. continue was long loans and what was here we modest shifting so lift us of a the to help was it payoff.

I'd So, factors two those that the are there. headwinds say the driving really are

Brian Martin

you. Got

when is and margin And Okay. you core about mean, take accretion you that what percentage, Lindsay, as thereafter? what it, kind just into going the out in correct that think quarter was of today level I was the next quarter PPP,

Lindsay Corby

assumption we funding technically that make PPP, don't side. because give on So, to with an the have Brian,

it, So, what you pieces we so the can assume it Page you there. but calculate you all on give on XX, depends

Brian Martin


some terms – Okay. of given year gone, color just go are into fourth with in those how then of down, you that of just the next as the have production, think some the All are the and you about on quarter coming into production business? just SBA right. feeling how subsidies component guys about about you to yields how And

Lindsay Corby

And the XX%, XX%, as the it to tail the from on I call what drives strong, help. is the the XX% going that'll remains or other Pipelines you again, healthy guess good shift we production And feel also and gain change. a production the standpoint highlighted. from Alberto Brian And obviously about a sale. could one margin is has and

being the be the XX% As that assets XX% there'll instead with sold earning of retaining and XX%. more

Brian Martin

it. Got

And Okay. on me, maybe of the last is two last the has for just or great, where impressive, one record super just been the then growth kind DDAs are, – deposit the of kind levels do about growth this just I think balance forward your you size guess, deposit slows, expectation going as and that the of sheet is here, just you remixes.

with more flows, I on a And just think just sheet those the that, bit stable into You're moving the that? you kind be are side, and more of here, to the but know little security deposit the outlook, kind loans deposit how it on this about clear balance to seeing from was that's quarter, of side. down articulating still is

Lindsay Corby


increase I think and saw side. you on we're slight the the deposit quarter commercial this flows, a seeing it coming

long that think here lot earning of has. there, But your a question Brian, liquidity goal yes, how continue the and fair, to the big and there's assessment system, I those deploy to and is liquidity So, the it in and is everybody assets loans. is still stays out remix our

Brian Martin

you. Got

– trends but here, or I how down quarter slow thoughts is it's and completed remaining know That's what Okay. be been think year or and fair just I I pick, largely it, that PPP that but would last seems the are on, was know some is year a you the your that on next don't have tail great? just been see to end expectation if thought. this any just guess, there's And since one a how there's is about

Lindsay Corby

see, terms a a it had through PPP bit, quarter through, and come down great the dependent of all how a quarter things We on system. quiet saw and did gets Yes. little all quick amount third the good we'll it's in we forgiveness, in

So, I think and maybe don't the all think year, then this half trickle I other Brian, half, will come that it'll into XXXX.

Brian Martin

it. Got


Lindsay Corby

million remaining. $X.X fees only There’s processing net of Yes.

a just part perspective. So

Brian Martin

it. get Totally Yes.

And Thanks. guys. Okay. great quarter

Lindsay Corby

it. Appreciate Brian. you, Thank


Race have follow-up Piper a Sandler. from next We from question Nathan

is Please line now go open. ahead. Your

Nathan Race

Yes. Thanks for follow up. my taking

the I'm recently. of over have of acquisition kind can and returned term flow on context each that you next last just XX% if of seeing net quarters expect at quarters. to that a opportunities the to the you're capital about the of curious level income of two continue least, guys shareholders we few just Just management in near just within

Alberto Paracchini

I I think growth certainly forward. us And and that it, it be M&A to the flexibility affords going whether flexibility it obviously foremost to it buybacks, be business. is, dividend in to, that as think increase via would gives us deploy continue for well. the Whether the it Nate, way about time great first support over to

we're if grow, saying to than guess business I capital, if capital I'm we to more that, enough what deploy we we it and is capital see, – So, the excess the And looking are strategically. sheet will we'll more generating then balance are not have shareholders. return not, to obviously support and and continue

buybacks, accordingly. through we'll and increases through over flexibility, be dividends whether that determine So retain time, that be that or and whether data

Nathan Race

congrats great guys the you Got it. I and appreciate all on quarter. the colors. Thanks

Lindsay Corby

Nate. Thanks,

Alberto Paracchini

back now call you Thank today. I'll Yes. the turn you. Mr. over Thank to any Paracchini closing question for remarks. for your

Alberto Paracchini

that Byline. of And speaking look Great. us concludes of your for Sam. on call all And you morning thank to in today, Thank this our to here, next next and forward behalf quarter we time interest again year. you, your

you thank So much. very


you Thank call. today’s joining. concludes This for

disconnect You lines. may now your