BY

ANALYST NOTE: BY (Byline Bancorp, Inc.) Date: 2026-06-13

1. Structural Readiness

Conservative Entry: $33.10 Current Price: $35.15 Extension: +6.2% vs. conservative entry Breakout Level: $33.10 (Conservative Entry)

Volatility Context: The ATR at the time of the breakout was 2.4%, and the current ATR is 2.0%. Both metrics fall into the sub-threshold bucket (<2.5%). In the StoryStocks canon, this indicates structural quality is present but the volatility is lower than the historical "sweet spot" (4–6%). This suggests a tighter, potentially slower-moving move rather than a high-velocity expansion, requiring careful position sizing to account for the lower immediate momentum.

2. Thesis Layer

Thesis Classification: TACTICAL / Setup-Led Secular Exposure: None named at this date.

There is no named macro or secular thesis driving this specific setup as of June 13, 2026. This is a tactical trade driven by the structural price action (the confirmed breakout) and the immediate business fundamentals disclosed in recent filings. The conviction must be derived entirely from the quality of the setup execution and the strength of the underlying business metrics, rather than a broader thematic tailwind.

3. Business Overview

Company Profile: Byline Bancorp, Inc. is a Delaware corporation and the parent company of Byline Bank, an Illinois state-chartered subsidiary based in Chicago. The firm operates 43 branches in the greater Chicago area and one in Brookfield, Wisconsin.

Business Model & Operations: The company serves small and medium-sized businesses (SMBs), commercial real estate (CRE) developers, financial sponsors, and individual consumers. Its revenue model is diversified across net interest income, non-interest income (including SBA fees and wealth management), and gain on sale of loans.

Key Operational Metrics (as of Q2 2026):

• Loan Portfolio: As of December 31, 2025, the Commercial & Industrial (C&I) group managed $3.3 billion in loans, while the CRE group held $1.4 billion. The leasing portfolio (BFG) stood at $752.3 million with a weighted average life of 3.1 years.
• SBA Leadership: The SBA platform remains a core strength, ranking as the #1 SBA 7(a) lender in Illinois and the 10th most active originator nationally for the fiscal year ended September 30, 2025.
• Recent M&A: On April 1, 2025, the company completed the acquisition of First Security Bancorp, Inc. for approximately $41.5 million in consideration, expanding its footprint.
• Origination Activity: In the most recent quarter, origination activity was solid with $241 million in new loans, though payoffs remained elevated at $320 million.
• Expense & Income Guidance: Management has provided specific guidance for the second quarter of 2026:
• Net Interest Income (NII): Expected range of $99 million to $101 million, based on a forward curve assuming no rate cuts or hikes in 2026.
• Noninterest Expense: Full-year guidance remains unchanged at $58 million to $60 million per quarter.
• Noninterest Income: Expected to range between $14 million and $15 million for the second quarter, with gain on sale averaging $5.5 million per quarter.
• Provision: The pretax provision margin was 229 basis points, marking the 14th consecutive quarter exceeding 2%, indicating consistent credit quality management.

4. Archetype and Conviction

Archetype: Margin Inflector Rationale: The "Margin Inflector" archetype fits Byline Bancorp due to its disciplined expense management and strategic acquisition of First Security Bancorp, which is intended to expand the deposit base and loan origination capacity without a proportional increase in operating costs. The company's ability to maintain a stable provision margin (229 bps) while growing its loan book ($3.3B C&I, $1.4B CRE) and leveraging its SBA platform demonstrates an operational model focused on efficiency and yield expansion.

Valuation & Conviction Stack:

• Thesis Strength: Moderate. The lack of a named secular thesis limits the "story" potential, but the tactical setup is supported by concrete earnings guidance.
• Evidence Quality: High. The evidence base is robust, featuring specific Q2 2026 guidance on NII, expenses, and loan growth, alongside confirmed M&A integration.
• Setup Readiness: High. The coil is confirmed active with a clear stop level ($27.04) and a defined entry ($33.10).
• Rerating Potential: Dependent on the successful integration of First Security and the realization of the mid-single-digit loan growth guidance.

5. Invalidations, Strengtheners, and Gaps

Invalidation Triggers:

• A significant deviation from the provided guidance (e.g., NII falling below $99M or expenses exceeding $60M/quarter) in the next reporting cycle.
• A sharp deterioration in the provision margin (falling below the 2% historical floor).

Strengtheners:

• Confirmation of the "mid-single digits" full-year loan growth in the next earnings release.
• Successful integration of First Security Bancorp leading to deposit growth or cost synergies.
• An increase in the ATR, signaling a return to higher volatility and momentum.

Evidence Gaps:

• Missing: Specific details on the *post-acquisition* impact on the balance sheet as of June 13, 2026, beyond the April 2025 closing figures. The current evidence reflects the acquisition status but does not explicitly quantify the *current* (June 2026) synergies or cost savings realized.
• Missing: Detailed breakdown of the "elevated payoffs" ($320M) versus the "solid origination" ($241M) to determine the net loan growth trajectory for the specific quarter.

PRIVATE ANALYST CALL

Judgment: Buy Confidence: medium Key risks: Sub-threshold ATR (2.0%) suggests lower momentum than historical sweet spots; Elevated loan payoffs ($320M) vs. origination ($241M) could pressure net growth; Lack of named secular thesis limits rerating catalysts. Expected path: Price consolidates or grinds higher as management executes on the mid-single-digit loan growth guidance and integrates First Security; volatility may remain subdued until a catalyst (e.g., rate change or earnings beat) emerges. Expected horizon: 3 to 6 months for the setup to fully play out or for a re-test of the breakout level. Failure mode to watch: A daily close below $27.04, which would invalidate the confirmed coil structure.