Sign in

You're signed outSign in or to get full access.

BB

BYLINE BANCORP, INC. (BY)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered solid core performance: adjusted EPS of $0.75 vs reported diluted EPS of $0.66, total revenue of $110.5M, record net interest income of $96.0M, and NIM expansion to 4.18% .
  • Versus S&P Global consensus, adjusted EPS materially beat (consensus ~$0.67; adjusted actual $0.75), while total revenue of $110.5M exceeded revenue consensus of ~$107.0M; GAAP EPS was roughly in line with consensus at $0.66* .
  • Cost discipline improved: adjusted efficiency ratio fell to 48.20% (from 53.04% in Q1), even with merger and offering costs; PTPP ROAA remained above 2% for the 11th consecutive quarter .
  • Key catalysts: NII guidance of $95–$97M for Q3, margin tailwinds from deposit mix and lower borrowings, and opportunistic buybacks (543,599 shares repurchased this quarter; 418,235 tied to the secondary offering) .

What Went Well and What Went Wrong

What Went Well

  • Net interest income reached a record $96.0M (+8.8% QoQ), with NIM up 11 bps to 4.18% on better earning asset yields and lower borrowing costs .
  • Adjusted operating efficiency improved markedly to 48.20% (vs 53.04% in Q1), and TBV/share rose 3.1% QoQ to $21.56 .
  • Management completed integration of First Security, adding ~$279M deposits and ~$153M loans; CEO highlighted “momentum and strength” and focus on becoming the “preeminent commercial bank in Chicago” .

What Went Wrong

  • Credit costs rose: provision increased to $11.9M (from $9.2M), net charge-offs rose to $7.7M (0.43% annualized), and NPLs increased to 0.92% of loans, driven by granular, event‑driven credits .
  • Non‑interest income declined 2.6% QoQ to $14.5M on a larger negative FV mark to the loan servicing asset and lower equity securities gains .
  • Non‑interest expense increased 5.6% QoQ to $59.6M due to merger-related costs and professional fees; money market costs rose 9 bps linked-quarter tied to First Security blending .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Net Interest Income ($M)88.5 88.2 96.0
Non-Interest Income ($M)16.1 14.9 14.5
Total Revenue ($M)104.7 103.1 110.5
Non-Interest Expense ($M)57.4 56.4 59.6
PTPP ($M)47.2 46.7 50.9
Provision for Credit Losses ($M)6.9 9.2 11.9
Net Income ($M)30.3 28.2 30.1
Diluted EPS ($)0.69 0.64 0.66
Adjusted Diluted EPS ($)0.69 0.65 0.75
Margins & EfficiencyQ4 2024Q1 2025Q2 2025
Net Interest Margin (%)4.01 4.07 4.18
Efficiency Ratio (%)53.58 53.66 52.61
Adjusted Efficiency Ratio (%)53.37 53.04 48.20
ROAA (%)1.31 1.25 1.25
ROTCE (%)13.92 12.92 12.83
Revenue ComponentsQ4 2024Q1 2025Q2 2025
Net Interest Income ($M)88.5 88.2 96.0
Non-Interest Income ($M)16.1 14.9 14.5
Non-Interest Income/Total Revenue (%)15.43 14.42 13.11
KPIsQ4 2024Q1 2025Q2 2025
Loans & Leases ($M)6,906.8 7,025.8 7,328.1
Deposits ($M)7,458.6 7,553.3 7,810.5
Average Cost of Deposits (%)2.48 2.30 2.27
ACL / Loans (%)1.42 1.43 1.47
NPLs / Loans (%)0.90 0.76 0.92
Net Charge-offs ($M)7.8 6.6 7.7
CET1 (%)11.70 11.78 11.85
TCE/TA (%)9.61 9.95 10.39
TBV/Share ($)20.09 20.91 21.56
Estimates vs Actuals (Q2 2025)ConsensusActual
EPS ($)0.67 (Primary EPS Consensus Mean)*0.66 GAAP diluted ; 0.75 adjusted
Revenue ($M)107.0*110.5

Values with asterisk (*) retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Interest Income ($M)Q3 2025N/A95–97 New
Non-Interest Expense ($M)Q3 2025N/A56–58 New
Gain on Sale (Gov’t Guaranteed) ($M)Quarterly run-rate~5 avg [Q1 stated] ~5 avg (unchanged) Maintained
Deposit Cost Trend2H 2025Trending lower (Q1) Flat-to-down (absent Fed cuts) Maintained/Refined
Securities Cash Flow UseNext 12 monthsN/A~$207M cash flows; likely allow runoff, fund loans New
Loan Growth Outlook2H 2025Mid-single digit (implied) Upper end of mid-single digit Raised
DividendOngoing$0.10/qtr $0.10/qtr (declared Jul 22) Maintained
Share RepurchaseOngoingOpportunistic 543,599 shares repurchased in Q2; 418,235 via secondary offering transaction Executed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
Net Interest Margin and NIINIM expanded in Q4 and Q1; NII stable to up Record NII, NIM +11 bps QoQ to 4.18% Improving
Deposit Mix & CostsCosts fell 28 bps in Q4; 18 bps in Q1 with mix shift Avg deposit cost down 3 bps to 2.27%; money market cost up 9 bps from First Security blend Mixed but favorable overall
Credit QualityNPLs fell in Q1; NCOs moderated vs Q3’24 Provision up to $11.9M; NPLs rose to 0.92%; granular events cited Slight deterioration
Regulatory Threshold ($10B)Preparing for crossing threshold (strategic priority) Reinforced readiness and planning Ongoing readiness
M&A & Capital DeploymentClosed First Security; capital strong M&A conversations ongoing; opportunistic buybacks; flexibility Active/Selective
Securities PortfolioAdded AFS in Q1; duration ~4.7 years ~$207M CF expected; no near-term growth in AFS; prioritize loans Shift to loan funding
SBA/Gov’t GuaranteedStrong volumes, premiums in Q4; $70M sold in Q1 $73M sold; gains $5.4M; servicing FV mark negative Stable core activity; FV volatility

Management Commentary

  • CEO: “We are pleased with our overall strategic execution… completed the acquisition of First Security… driven by our objective of becoming the preeminent commercial bank in Chicago.” .
  • President: “Adjusted second quarter results were highlighted by solid earnings, strong profitability, net interest margin expansion, healthy growth in loans and deposits, and controlled expenses.” .
  • CFO (Q3 outlook): “Assuming the Fed is on hold for Q3, our net interest income outlook is projected to range from $95 to $97 million.” .
  • President on capital: “We repurchased a large block of shares at attractive pricing and remain opportunistic within our capital hierarchy.” .

Q&A Highlights

  • Loan growth drivers: Healthy pipelines reflect both share gains and resilient client activity despite tariff uncertainty; growth guided to upper end of mid‑single digits in 2H .
  • M&A outlook: Conversations continue; seller mark‑to‑market challenges remain; capital priorities are growth, dividend, buybacks, opportunistic M&A .
  • Credit migration: Increases were granular and event‑driven across lines; focus on real-time problem identification and resolutions .
  • Securities & deposits: Let bond cash flows run off to fund loans; money market cost uptick from First Security mix; deposit pricing discipline continues .
  • Expense trajectory: Q3 NIE guided to $56–$58M due to seasonality and marketing; First Security cost saves largely in place .

Estimates Context

  • S&P Global consensus indicated EPS of ~$0.67 (Primary EPS Consensus Mean) with six estimates, and revenue of ~$107.0M with five estimates; adjusted EPS of $0.75 represents a clear beat, while GAAP diluted EPS of $0.66 was roughly in line; company-reported total revenue of $110.5M exceeded revenue consensus* .
  • Note: For banks, “revenue” definitions can vary across data providers; we anchor actuals on company-reported total revenue (NII + non-interest income). Values with asterisk retrieved from S&P Global.
  • Estimate implications: NII guidance ($95–$97M) and efficiency improvements support upward revisions to near-term EPS; higher provision and NPL uptick may temper magnitude of upward revisions .

Key Takeaways for Investors

  • Margin and NII momentum are intact; Q3 NII guide (95–97M) plus deposit mix tailwinds should support near‑term EPS resilience .
  • Cost control is a differentiator: adjusted efficiency at 48.20% and NIE guidance suggest operating leverage even post‑merger .
  • Credit normalization bears monitoring: provision and NPLs ticked up but remain within historical ranges; management’s granular credit approach mitigates risk .
  • Capital flexibility: CET1 at 11.85% and TCE/TA at 10.39% enable opportunistic buybacks and selective M&A while funding organic growth .
  • SBA/government‑guaranteed engine steady: $73M sold and ~$5M gains, though servicing FV marks can introduce quarterly volatility .
  • Strategic integration delivered: First Security added ~$279M deposits and ~$153M loans, reinforcing scale and franchise positioning .
  • Near‑term trading setup: A credible EPS beat on adjusted basis, clear NII guide, and visible cost discipline are positive; watch credit trend and any macro tariff headlines for sentiment shifts .

Relevant Q2 Press Releases

  • Secondary offering closed; company repurchased 418,235 shares concurrently as part of buyback program .
  • Board declared a $0.10 per share quarterly dividend, payable Aug 19 to holders of record Aug 5 .

Prior Quarter References (for trend analysis)

  • Q1 2025: NIM expanded to 4.07%; non‑interest income $14.9M; total revenue $103.1M; net income $28.2M .
  • Q4 2024: NIM 4.01%; non‑interest income $16.1M; total revenue $104.7M; net income $30.3M .