Byline Bancorp (BY) risk factors, 2026 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 operations66% rewritten
8. 08of funds. This loss would require us to seek other funding alternatives in order to continue to grow, thereby increasing our funding costs and reducing our net interest income and net incomenew
9. 09Our liquidity is dependent on dividends from Byline Bank25% rewritten
10. 10We may need to raise additional capital in the future, and such capital may not be available when needed or at all

Operational Risks

1. 11We may not be able to implement our growth strategy or manage costs effectively, resulting in lower earnings or profitability
2. 12There 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. 13New lines of business, products, product enhancements or services and technologies may subject us to additional risks50% rewritten
4. 14Our business may be adversely affected by conditions in the financial markets and economic conditions generally
5. 15Our 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. 16We 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 condition62% rewritten
2. 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
3. 18We continually encounter technological change80% rewritten
4. 19AI and our ability to implement and leverage AI to deliver new products and services to our customers present competitive risksnew
5. 20The recognition of gains on the sale of loans and servicing asset valuations reflects certain assumptions

Legal, Accounting, and Compliance Risks

1. 21Our 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. 22Our 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. 23The 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. 24Our ability to recognize the benefits of deferred tax assets is dependent on future cash flows and taxable income
5. 25Certain activities are restricted due to commitments entered into with the FRB by us and our foreign national stockholders
6. 26Monetary policies and regulations of the FRB could adversely affect our business, financial condition, and results of operations44% rewritten
7. 27We 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. 28Litigation 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
9. 29Non-compliance with the USA PATRIOT Act, the Bank Secrecy Act or other laws and regulations could result in fines or sanctions against us
10. 30Regulations 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. 31There 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
12. 32Our consolidated assets are expected to exceed $10 billion, which may result in increased regulation and supervision of Byline Bank and may also result in increased costs and/or reduced revenuenew

Risks Related to Acquisition Activity

1. 33We 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. 34Loss of deposits could increase our funding costs and negatively affect our liquidity
3. 35We operate in a highly competitive and changing industry and market area and compete with both banks and non-banks34% rewritten
4. 36Our principal stockholder, MBG Investors I, L.P. has significant influence over us, and its interests could conflict with those of our other stockholders61% rewritten
5. 37Future sales of our common stock in the public market, including by pre-IPO stockholders, could lower our stock price