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Byline Bancorp Inc . (NYSE:BY) reported its first quarter 2025 results showing continued growth in loans and deposits, while completing its merger with First Security Bancorp ahead of schedule. The Chicago-based commercial bank posted solid financial metrics despite a slight decrease in earnings compared to the previous quarter.
Quarterly Performance Highlights
Byline reported net income of $28.2 million ($28.8 million adjusted) for Q1 2025, translating to diluted earnings per share of $0.64 ($0.65 adjusted). This represents a modest decline from the $30.3 million net income and $0.69 EPS reported in Q4 2024. The bank maintained strong profitability metrics with a pre-tax pre-provision return on average assets (PTPP ROAA) of 2.06% and return on tangible common equity (ROTCE) of 12.92%.
The company’s efficiency ratio stood at 53.66%, indicating effective cost management, while tangible book value per share increased 14.3% year-over-year.
As shown in the following quarterly highlights chart:
Loan and Deposit Growth
Byline’s loan portfolio reached $7.0 billion in Q1 2025, representing an increase of $137.1 million or 8.0% annualized from the previous quarter. The bank originated $310.3 million in new loans during the quarter, with an average loan yield of 7.09%.
The loan portfolio maintains a diversified composition with Commercial & Industrial (C&I) loans accounting for 39%, Owner Occupied CRE at 20%, and Non-Owner Occupied CRE at 14%. The company’s leasing business represents 10% of the portfolio, while residential and construction & development loans make up 10% and 7%, respectively.
The following chart illustrates the loan portfolio trends and composition:
On the funding side, total deposits grew to $7.6 billion, up 5.1% annualized from Q4 2024. The loan-to-deposit ratio stood at 92.54%, reflecting a balanced approach to growth. The bank’s deposit base remains granular with approximately 69% of total deposits being FDIC insured, providing stability to the funding structure.
The deposit trends and composition are shown in the following chart:
Net Interest Income and Margin
Net interest income for Q1 2025 was $88.2 million, remaining flat compared to the previous quarter. However, the net interest margin improved to 4.07%, up 6 basis points from Q4 2024, indicating the bank’s ability to manage its interest-earning assets and funding costs effectively in the current rate environment.
The following chart details the net interest income and margin trends:
Non-interest income decreased to $14.9 million, down 8.0% from the previous quarter. The bank sold $70.2 million of government-guaranteed loans in Q1 2025, continuing its strong position in the SBA (LON:SBA) lending space. Notably, Byline maintained its status as the top Illinois SBA 7(a) lender for the 16th consecutive year.
Operating expenses showed improvement with non-interest expenses of $56.4 million, down 1.7% from Q4 2024, contributing to the solid efficiency ratio.
Asset Quality and Capital Position
Byline maintained strong asset quality metrics with non-performing loans to total loans ratio at 0.76%. The bank’s allowance for credit losses provides adequate coverage for potential loan losses, reflecting prudent risk management.
The following chart illustrates the asset quality trends:
Capital levels remain robust with a Common Equity Tier 1 ratio of 11.78% and total stockholders’ equity of $1.1 billion, up 3.6%. The tangible common equity to tangible assets ratio stands at 9.95%, well above the bank’s operating target range of 8-9%, providing ample capacity for continued growth and potential acquisitions.
The capital position is detailed in the following chart:
Strategic Initiatives and Outlook
Byline completed its merger with First Security Bancorp, Inc. effective April 1, 2025, earlier than the previously anticipated Q2 timeframe mentioned in their Q4 2024 earnings call. This strategic acquisition aligns with the bank’s growth strategy to supplement organic growth through acquisitions.
For 2025, Byline’s strategic priorities include maintaining balance sheet strength, focusing on deposit growth, achieving top quartile profitability, and capitalizing on market opportunities. The bank aims to stay ahead of regulatory expectations while actively managing risk.
The company’s strategic priorities are illustrated in the following chart:
With total assets of $9.6 billion, Byline continues to strengthen its position as a leading Chicago commercial banking franchise. The bank operates 45 branches throughout the Chicagoland area, providing a solid foundation for its commercial banking focus.
As shown in the following overview:
Byline’s stock closed at $25.35 on April 25, 2025, up 1.22% for the day, with minimal movement in after-hours trading. The stock has traded between $20.93 and $32.89 over the past 52 weeks, currently positioned in the middle of that range as investors assess the bank’s growth trajectory and the impact of its recent merger.
Full presentation:
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