Byline Bancorp delivered third-quarter results that were well received by the market, reflecting strong revenue growth and profitability metrics that management attributed to a combination of improved deposit mix, solid loan originations, and stable credit quality. Chairman and CEO Roberto Herencia highlighted the resilience of Byline's business model and its ability to maintain consistent execution despite macroeconomic uncertainty and industry competition. The company's SBA lending team proactively managed risks associated with the federal government shutdown, while credit costs and nonperforming asset levels improved compared to the prior quarter. CFO Thomas J. Bell credited disciplined deposit pricing and a shift toward non-interest-bearing accounts for supporting net interest margin expansion, noting, “We saw continued improvement in the mix, which drove deposit costs lower by 11 basis points to 2.16%.”
Is now the time to buy BY? Find out in our full research report (it’s free for active Edge members).
Byline Bancorp (BY) Q3 CY2025 Highlights:
- Revenue: $115.7 million vs analyst estimates of $110.8 million (13.6% year-on-year growth, 4.5% beat)
- Adjusted EPS: $0.83 vs analyst estimates of $0.72 (15.3% beat)
- Adjusted Operating Income: $49.92 million vs analyst estimates of $53.71 million (43.1% margin, 7.1% miss)
- Market Capitalization: $1.24 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Byline Bancorp’s Q3 Earnings Call
- David Long (Raymond James) asked about assumptions behind net interest income sensitivity to rate cuts. CFO Thomas J. Bell explained the model benefits from disciplined deposit pricing and ongoing asset growth, but confirmed asset sensitivity remains a factor.
- Adam Kroll (Piper Sandler) inquired about M&A priorities and capital deployment. President Alberto Paracchini reiterated openness to disciplined deals in the Greater Chicago area, emphasizing capital is being built for both organic growth and acquisitions.
- Adam Kroll (Piper Sandler) also asked about the estimated Durbin Amendment impact. Paracchini projected a $4.5–$5 million annual effect, with the regulatory change expected in 2027 after surpassing the $10 billion asset threshold.
- Brian Martin (Janney Montgomery Scott) questioned the sustainability of recent deposit mix improvements. Bell clarified the gains were partially seasonal but said relationship-focused commercial accounts support ongoing margin benefits.
- Brandon Rudd (Stephens) requested details on non-depository financial institution (NDFI) exposure. Paracchini shared that NDFI loans represent about 3% of the portfolio, mainly commercial in nature and granular, differentiating from riskier industry practices.
Catalysts in Upcoming Quarters
Looking ahead, our analyst team will monitor (1) the pace of commercial payments customer onboarding and product adoption, (2) the progression toward and effects of surpassing the $10 billion asset threshold, and (3) the resolution and operational impact of government shutdowns on SBA lending and loan sales. Ongoing efficiency improvements and the deposit mix’s contribution to margin sustainability will also be key indicators of execution.
Byline Bancorp currently trades at $26.94, up from $26.65 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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