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BYLINE BANCORP, INC. (BY)·Q3 2025 Earnings Summary

Executive Summary

  • Record quarter: total revenue $115.735M, diluted EPS $0.82 and adjusted diluted EPS $0.83; net interest margin expanded 9 bps to 4.27%, and PTPP ROAA was 2.25% for the 12th consecutive quarter above 2.00% .
  • EPS beat Street: Primary EPS came in 0.83 vs 0.72 consensus (+$0.11, bold beat); revenue was modestly below S&P consensus ($110.437M actual vs $111.070M estimate, slight miss) [*Values retrieved from S&P Global].
  • Guidance color: management guided Q4 net interest income to $97–$99M, expects non-interest expense to be “in the same range” as Q3, and mid-single digit loan growth; SBA government shutdown may delay gain-on-sale timing to Q1 2026 .
  • Capital actions and quality: completed $75M subordinated notes offering at 6.875% and redeemed prior $75M sub notes; CET1 rose to 12.15%, TCE/TA to 10.78%, while NPLs and NPAs improved Q/Q .

What Went Well and What Went Wrong

What Went Well

  • Record earnings and margin expansion: “record financial results…preeminent commercial bank in Chicago,” with net interest income up 4.1% Q/Q and NIM +9 bps Q/Q .
  • Fee income strength: non-interest income rose 9.5% Q/Q, driven by $7.0M net gains on government-guaranteed loan sales on $92.9M sold volume .
  • Asset quality and capital: NPLs fell to 0.85% of loans; NPAs to 0.69% of assets; CET1 up 30 bps to 12.15%; TBV/share up 4.7% Q/Q to $22.58 .

Quotes:

  • “We are pleased to deliver record financial results…focused on becoming the preeminent commercial bank in Chicago.” — Roberto R. Herencia, Executive Chairman & CEO .
  • “Record earnings, strong profitability, margin expansion, and solid growth in loans, deposits, and fee revenue.” — Alberto J. Paracchini, President .

What Went Wrong

  • Adjusted efficiency ratio deteriorated: adjusted efficiency ratio increased to 50.27% from 48.20% Q/Q on higher incentives and health insurance costs; reported efficiency ratio improved to 51.00% but adjusted non-interest expense rose Q/Q .
  • SBA shutdown risk to Q4 fees: company unable to sell/settle loans during shutdown; timing could push gain-on-sale into Q1 2026 (management withheld Q4 gain-on-sale guidance) .
  • Sub debt refinancing cost: higher interest expense related to the $75M sub-debt refinancing contributed ~7 bps drag on NIM in Q3 .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Net Interest Income ($000)$88,216 $95,970 $99,871
Non-interest Income ($000)$14,864 $14,483 $15,864
Total Revenue ($000)$103,080 $110,453 $115,735
Non-interest Expense ($000)$56,429 $59,602 $60,518
PTPP Income ($000)$46,651 $50,851 $55,217
Provision for Credit Losses ($000)$9,179 $11,923 $5,298
Net Income ($000)$28,248 $30,082 $37,200
Diluted EPS ($)$0.64 $0.66 $0.82
Adjusted Diluted EPS ($)$0.65 $0.75 $0.83
Net Interest Margin (%)4.07% 4.18% 4.27%
Efficiency Ratio (%)53.66% 52.61% 51.00%
Adjusted Efficiency Ratio (%)53.04% 48.20% 50.27%
ROAA (%)1.25% 1.25% 1.52%
CET1 (%)11.78% 11.85% 12.15%

Segment/Portfolio Mix (Loans & Deposits)

  • Loan Portfolio Composition (Q3 2025, $000): CRE $2,234,986; C&I $2,804,434; Residential $552,984; Construction $412,032; Leasing $750,531; Total Loans & Leases $7,440,755 .
  • Deposit Composition (Q3 2025, $000): Non-interest-bearing DDA $1,932,869; Interest checking $868,922; Money Market $2,957,995; Savings $488,894; Time < $250k $1,151,764; Time ≥ $250k $427,753; Total Deposits $7,828,197 .

Key KPIs

  • NPLs/Loans 0.85%; NPAs/Assets 0.69%; ACL/Loans 1.42%; Net charge-offs to avg loans 0.38% (annualized) .
  • TBV/share $22.58; TCE/TA 10.78%; Leverage ratio 12.20% .
  • Average cost of deposits 2.16% (down 11 bps Q/Q); non-interest income to total revenues 13.71% .

Estimate Comparison (S&P Global)

MetricQ1 2025Q2 2025Q3 2025
Primary EPS Consensus Mean ($)0.62333*0.66667*0.72*
Primary EPS Actual ($)0.65*0.75*0.83*
Revenue Consensus Mean ($)100,898,750*107,004,600*111,069,600*
Revenue Actual ($)93,901,000*98,530,000*110,437,000*
  • Q3 EPS: 0.83 vs 0.72 consensus — bold beat (+$0.11); Q3 revenue: $110.437M vs $111.070M consensus — slight miss [*Values retrieved from S&P Global].

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Interest Income ($M)Q4 2025Not provided$97–$99 New
Non-interest Expense ($M)Q4 2025Not provided“Same range as Q3” (~$60.5) Maintain
Loan GrowthQ4 2025Not providedMid-single digits expected New
Gain-on-sale (SBA)Q4 2025Not providedNo guidance due to shutdown; timing likely Q1 if prolonged Withdrawn/Deferred
Durbin + FDIC Impact2027Not quantified~$4.5–$5.0M combined when thresholds apply New Quantification
$10B Asset Threshold Crossing2026 Q1Not specified priorAnticipated crossing in Q1 next year; Durbin effective mid-2027 Update
Dividend per Share ($)Q4 2025$0.10 (Q2/Q3) $0.10 declared on Oct 21, 2025 Maintained
Capital ActionsQ3 2025—Issued $75M sub notes @ 6.875%; redeemed $75M 2030 sub notes (Oct 1) New/Executed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1’25, Q2’25)Current Period (Q3’25)Trend
Margin & Rate SensitivityNIM expanded; asset-sensitive posture (Q1/Q2 releases) Asset-sensitive; NIM +9bps; each 25bps cut ~-$2.5M NII ramp; beating model via disciplined repricing Margin resilient despite expected Fed cuts
Deposit Mix & CostsCost of deposits fell 18 bps in Q1; mix shifts post-acquisition (Q2) Avg deposit cost down 11 bps to 2.16%; DDA up 9% Q/Q (seasonality); brokered CDs down Funding cost decline; healthier mix
SBA/Government ShutdownNo shutdown impact noted earlierShutdown prevents secondary sales/settlement; timing risk to Q4 gain-on-sale; PLP mitigates originations Temporary headwind to fee timing
Capital & Sub DebtRatings upgrade (KBRA), term loan repaid (Q1) Issued $75M sub notes @ 6.875%; redeemed prior notes; CET1 12.15% Strong capital build, optionality
M&A OptionalityActive discussions; disciplined deals (ongoing)Open to deals across greater Chicago/Milwaukee; focus on deposits; buyback as flexible “safety valve” Opportunistic stance maintained
Regulatory Thresholds—Expect to cross $10B assets in Q1 next year; Durbin/FDIC quantified impact Preparing for scale/fee impacts
Commercial Payments InitiativeAnnounced expansion/hiring (May) Infrastructure in place; pipelines building; onboarding through 2026 Early build → 2026 scale-up
Asset QualityNPL/NPAs improved Q1; increased Q2 on a few names Broad improvement: NPLs 0.85%; NPAs 0.69%; net charge-offs down Q/Q Stabilizing/Improving

Management Commentary

  • “Record financial results…focused on becoming the preeminent commercial bank in Chicago.” — Roberto R. Herencia, CEO .
  • “Record earnings, strong profitability, margin expansion, and solid growth in loans, deposits, and fee revenue.” — Alberto J. Paracchini, President .
  • “Record net interest income of $99.9M…NIM grew to 4.27%…refinancing contributed a seven-basis point drag on NIM.” — Tom Bell, CFO .
  • “We anticipate crossing the $10B asset threshold during the first quarter of next year…Durbin impact ~$4.5–$5M.” — Alberto J. Paracchini .

Q&A Highlights

  • Margin sensitivity and deposit repricing: asset-sensitive book; disciplined repricing on CDs; competition more rational; NII guidance $97–$99M assumes two cuts .
  • SBA shutdown impact: cannot sell/settle loans; timing may push gain-on-sale to Q1; carry benefit while holding loans; PLP status supports originations .
  • Expenses run-rate: Q4 non-interest expense expected in Q3 range; incentive accruals elevated in 2025 but reset in 2026 .
  • M&A criteria: targets $0.4–$2.0B in greater Chicago/Milwaukee; deposit-centric; multiple deals possible; buyback remains flexible .
  • Regulatory impacts: crossing $10B triggers Durbin in mid-2027 and higher insurance after four quarters above threshold; quantified ~$4.5–$5M .
  • NDFI exposure: $221M (<3% of loans), granular/commercial transactions; not financing private credit funds/structured ABS .

Estimates Context

  • EPS: Adjusted/Primary EPS beat Q3 consensus by $0.11 (0.83 vs 0.72) — bold beat [*Values retrieved from S&P Global].
  • Revenue: S&P “Revenue” actual $110.437M was slightly below $111.070M consensus — slight miss; company-reported total revenue was $115.735M (definitions differ) [*Values retrieved from S&P Global].
  • Implications: Street may raise EPS estimates given margin resilience and lower provision; revenue models may need to incorporate temporary SBA fee delays due to shutdown .

Key Takeaways for Investors

  • Margin resilience in a cutting cycle: disciplined deposit pricing and asset mix delivered NIM expansion (+9 bps Q/Q) despite sub-debt drag; supports near-term NII within guided $97–$99M range .
  • Credit normalization with improving metrics: provision fell to $5.3M; NPLs/NPAs declined; ACL remains robust at 1.42% of loans .
  • Fee timing risk near-term: SBA shutdown likely defers gain-on-sale into Q1; carry on held loans partially offsets; watch Q4 non-interest income prints .
  • Capital flexibility: CET1 12.15% and TCE/TA 10.78% plus new $75M sub notes provide optionality for organic growth, M&A, and buybacks .
  • Estimate revisions: expect EPS upward revisions post-beat; revenue models should reflect company’s definition vs S&P series and potential Q4 fee timing [*Values retrieved from S&P Global].
  • Medium-term Durbin/FDIC headwind: plan for ~$4.5–$5M annual impact beginning mid-2027 if assets remain >$10B; monitor offset via payments initiative and deposit growth .
  • Watch catalysts: sustained NIM strength, SBA pipeline resumption post-shutdown, commercial payments ramp in 2026, and potential accretive deposit-rich M&A .

Disclaimer: All consensus and actual estimate values marked with an asterisk are Values retrieved from S&P Global.