Second-half loan growth anticipated at the upper end of mid-digits due to First Security integration, promoting enhanced performance, according to the byline report.
Byline Bancorp Reports Strong Q2 2025 Performance
Byline Bancorp, Inc. (BY) has announced its Q2 2025 financial results, showcasing a robust performance marked by significant loan and deposit growth, improved net interest income, and a strategic focus on expansion.
Loan and Deposit Growth
Total loans grew by approximately $300 million quarter over quarter, reaching around $7.4 billion, representing a 17.5% annualized growth rate. Deposits increased to $7.8 billion, up 13.7%. The acquisition and integration of First Security Bancorp added $153 million in loans and $280 million in deposits, significantly contributing to this growth.
Net Interest Income
Net interest income hit a record $96 million, driven by both organic loan growth and higher yields on securities. The net interest margin (NIM) was 4.2%, beating estimates by 10 basis points. This helped boost GAAP revenue by 11.2% year over year to $110.5 million, surpassing analyst expectations.
Strategic Plans and Execution
The strategic priority has been expanding the customer and deposit base through acquisitions, notably the First Security Bancorp purchase, and broadening revenue streams, especially non-interest income from SBA loans. Byline remains one of the most active SBA lenders in Illinois, selling $73 million in government guaranteed loans during the quarter with gains on sales increasing 9.7% quarter over quarter.
Despite a slight decline in overall non-interest income (down $381,000 from the previous quarter), the company is maintaining a diversified income strategy and focusing on disciplined capital allocation, efficient expense management (efficiency ratio improved to 48.2%), and credit quality vigilance given rising non-performing assets and credit loss provisions.
Financial Metrics and Capital Position
Byline reported adjusted EPS of $0.75, above estimates, with key return metrics like ROTCE at 12.83% and return on average assets (ROAA) at 1.25%. Tangible common equity ratio surpassed 10%, and CET1 capital was just under 12%, providing strength and flexibility for further growth initiatives.
Looking Ahead
Management expects loan growth for the second half of the year to be in the upper end of their mid-single-digit range. Noninterest expense guidance for Q3 is projected to be between $56 million and $58 million. Challenges in M&A remain, particularly around mark-to-market on fixed-rate portfolios.
Credit costs increased to $11.9 million, with a rise in net charge-offs and nonperforming loans. However, the company repurchased approximately 544,000 shares in the quarter.
In conclusion, Byline Bancorp’s Q2 2025 performance reflects robust loan and deposit growth fueled by strategic acquisitions, a record net interest income driven by higher yields and loan expansion, and disciplined capital management with a focus on risk and credit quality as the company scales. Slight pressures on credit and non-interest income warrant monitoring, but overall the quarter demonstrates strong operational momentum and effective execution of growth strategies.
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