Byline Bancorp (BY) risk factors, 2025 10-K

Risks Related to Our Business

1. 01Our business depends on our ability to successfully manage credit risk
2. 02We may underestimate the credit losses inherent in our loan and lease portfolio and have credit losses in excess of the amount we provide for loan and lease losses
3. 03Our business is subject to interest rate risk and fluctuations in interest rates may adversely affect our earnings
4. 04Our business, profitability, and liquidity may be adversely affected by deterioration in the credit quality of, or defaults by, third parties who owe us money, securities or other assets or whose securities, or obligations we hold
5. 05We depend on the accuracy and completeness of information about customers and counterparties
6. 06The value of the financial instruments we own may decline in the future
7. 07A lack of liquidity could affect operations and jeopardize our business, financial condition, and results of operations
8. 08Our liquidity is dependent on dividends from Byline Bank
9. 09We may need to raise additional capital in the future, and such capital may not be available when needed or at all

Operational Risks

1. 10We may not be able to implement our growth strategy or manage costs effectively, resulting in lower earnings or profitability
2. 11There can be no assurance that we will be able to continue to grow and to be profitable in future periods, or, if profitable, that our overall earnings will remain consistent or increase in the future. Our strategy focuses on organic growth, supplemented by opportunistic acquisitions
3. 12New lines of business, products, product enhancements or services may subject us to additional risks
4. 13Our business may be adversely affected by conditions in the financial markets and economic conditions generally
5. 14Our business is significantly dependent on the real estate markets in which we operate, as a significant percentage of our loan portfolio is secured by real estate

Technology Risks

1. 15We depend on information technology and telecommunications systems of third parties, and any systems failures, interruptions, or data breaches involving these systems could adversely affect our operations and financial condition
2. 16which could have a material adverse effect on our financial condition. In addition, failure of third parties to comply with applicable laws and regulations, or fraud or misconduct on the part of employees of any of these third parties, could disrupt our operations or adversely affect our reputation
3. 17The occurrence of fraudulent activity, breaches or failures of our information security controls, or cybersecurity-related incidents could have a material adverse effect on our business, financial condition, or results of operations
4. 18We continually encounter technological change
5. 19The recognition of gains on the sale of loans and servicing asset valuations reflect certain assumptions

Legal, Accounting, and Compliance Risks

1. 20Our accounting estimates and risk management processes and controls rely on analytical and forecasting techniques and models and assumptions, which may not accurately predict future events
2. 21Our goodwill may become impaired, which may adversely impact our results of operations and financial condition and may limit Byline Bank’s ability to pay dividends to us, thereby causing liquidity issues
3. 22The accounting for loans acquired in connection with our recapitalization and acquisitions is based on numerous subjective determinations that may prove to be inaccurate and have a negative impact on our results of operations
4. 23Our ability to recognize the benefits of deferred tax assets is dependent on future cash flows and taxable income
5. 24Certain activities are restricted due to commitments entered into with the FRB by us and our foreign national stockholders
6. 25Monetary policies and regulations of the FRB could adversely affect our business, financial condition, and results of operations
7. 26We are subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions
8. 27Litigation and regulatory actions, including possible enforcement actions, could subject us to significant fines, penalties, judgments, or other requirements resulting in increased expenses or restrictions on our business activities
9. 28Non-compliance with the USA PATRIOT Act, the Bank Secrecy Act or other laws and regulations could result in fines or sanctions against us
10. 29Regulations relating to privacy, information security, and data protection could increase our costs, affect or limit how we collect and use personal information, and adversely affect our business opportunities
11. 30There is uncertainty surrounding the potential legal, regulatory and policy changes by the presidential administration in the United States that may directly affect financial institutions and the global economy

Risks Related to Acquisition Activity

1. 31We may be adversely affected by risks associated with completed and potential acquisitions, including execution risks, failure to realize anticipated transaction benefits, and failure to overcome integration risks, which could adversely affect our growth and profitability
2. 32Loss of deposits could increase our funding costs and negatively affect our liquidity
3. 33We operate in a highly competitive and changing industry and market area and compete with both banks and non-banks
4. 34Our principal stockholder, MBG Investors I, L.P. has significant influence over us, and its interests could conflict with those of our other stockholders
5. 35Future sales of our common stock in the public market, including by our pre-IPO stockholders, could lower our stock price