Byline Bancorp (BY): Buy, Sell, or Hold Post Q1 Earnings?

June 26, 2025 at 00:01 AM EDT

BY Cover Image

Over the past six months, Byline Bancorp’s shares (currently trading at $25.74) have posted a disappointing 12.4% loss while the S&P 500 was flat. This may have investors wondering how to approach the situation.

Following the pullback, is this a buying opportunity for BY? Find out in our full research report, it’s free.

Why Does Byline Bancorp Spark Debate?

Ranking as the fifth most active Small Business Administration lender in the country, Byline Bancorp (NYSE: BY) is a Chicago-based bank that provides banking services to small and medium-sized businesses, commercial real estate developers, and consumers.

Two Things to Like:

1. Net Interest Income Skyrockets, Fueling Growth Opportunities

While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.

Byline Bancorp’s net interest income has grown at a 12.5% annualized rate over the last four years, better than the broader bank industry. Its growth was driven by an increase in its net interest margin, which represents how much a bank earns in relation to its outstanding loans, as its loan book shrank throughout that period.

Byline Bancorp Quarterly Net Interest Income

2. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Byline Bancorp’s EPS grew at an astounding 15.4% compounded annual growth rate over the last five years, higher than its 8.5% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Byline Bancorp Trailing 12-Month EPS (Non-GAAP)

One Reason to be Careful:

Efficiency Ratio Expected to Falter

Topline growth alone doesn't tell the complete story - the profitability of that growth shapes actual earnings impact. Banks track this dynamic through efficiency ratios, which compare non-interest expenses such as personnel, rent, IT, and marketing costs to total revenue streams.

Markets understand that a bank’s expense base depends on its revenue mix and what mostly drives share price performance is the change in this ratio, rather than its absolute value. It’s somewhat counterintuitive, but a lower efficiency ratio is better.

For the next 12 months, Wall Street expects Byline Bancorp to become less profitable as it anticipates an efficiency ratio of 53.7% compared to 52.3% over the past year.

Byline Bancorp Trailing 12-Month Efficiency Ratio

Final Judgment

Byline Bancorp’s positive characteristics outweigh the negatives. After the recent drawdown, the stock trades at 1× forward P/B (or $25.74 per share). Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

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