BYLINE BANCORP, INC. Leases Disclosure

Note 9—Leases

The Company enters into leases in the normal course of business, primarily for its banking facilities and branches. The Company’s operating leases have varying maturity dates through year end 2036, some of which include renewal or termination options to extend the lease. In addition, the Company leases or subleases real estate to third parties. The Company includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Company will exercise the option. In addition, the Company has elected to account for any non-lease components in its real estate leases as part of the associated lease component. The Company has also elected not to recognize leases with original lease terms of 12 months or less (short-term leases) on the Company’s Consolidated Statements of Financial Condition.

Note 9—Leases (continued)

Leases are classified at the lease commencement date. Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

The Company uses its incremental borrowing rate at lease commencement to calculate the present value of lease payments when the rate implicit in a lease is not known. The Company's incremental borrowing rate is based on the FHLB regular advance rate, adjusted for the lease term and other factors. At December 31, 2025, the weighted average discount borrowing rate was 3.58% and the weighted average remaining life of operating leases was 4.7 years compared to 3.19% and 5.0 years for December 31, 2024.

Operating cash flows paid for operating lease amounts included in the measure of lease liabilities were $3.5 million and $4.0 million for the years ended December 31, 2025 and 2024, respectively. For the year ended December 31, 2024, operating cash flows paid included early termination payment of $228,000 for one of the Company’s previously closed branch facilities, resulting in a gain of $67,000.

The Company recorded $2.2 million, $2.3 million, and $4.8 million of right-of-use lease assets in exchange for operating lease liabilities for the years ended December 31, 2025, 2024, and 2023, respectively. In 2023, the additions recorded to right-of-use assets and operating lease liabilities included $3.8 million related to the acquisition of Inland.

During the year ended December 31, 2025 the Company recorded no impairment related to leases.

During the year ended December 31, 2024, the Company recorded $194,000 of impairment related to two branch facilities that were closed in 2024. Impairments were recognized on operating lease right-of-use assets and are reflected in other non-interest expense.

During the year ended December 31, 2023, the Company recorded $395,000 of impairment related to an acquired non-branch facility lease.

The total amount of minimum rentals to be received in the future on these subleases is approximately $2.2 million, and the leases have contractual lives extending through 2036. In addition to the above required lease payments, the Company has contractual obligations related primarily to information technology contracts and other maintenance contracts.