The stock for Byline Bancorp (NYSE: BY ) has increased in value by more than 125% in the last five years, but year to date in 2025, BY has not made any gains at all without the addition of dividends. I first wrote about BylineI have been involved in the financial world for over 20 years with experience as an advisor, teacher, and writer. I am a full believer in the free-market system and that financial markets are efficient with most stocks reflecting their real current value. The best opportunities for pro ...

About Byline Bank's Small Business Capital Group Byline Bank receives Illinois SBA Lender of the Year Awards for fiscal year 2024. Pictured, from left: Roberto Herencia; Rehman Valliani; Thomas Abraham; Melanie Noosbond; Patrick Piorkowski, Lender Relations Specialist for the SBA's Illinois District Office; Liama Lohman-Kalas; Michael Knazur; Willette LeGrant, District Director of the SBA's Illinois District Office; Michael Adams; Daniel Branco; Garrett Bright; Mark Fucinato; Alberto Paracchini. CHICAGO, Au ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents Byline Bancorp's unaudited interim condensed consolidated financial statements, including condition, operations, and cash flows, with detailed notes [Condensed Consolidated Statements of Financial Condition](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition) Total assets reached **$9.72 billion** by June 30, 2025, up from **$9.50 billion** at year-end 2024, driven by loan growth and increased deposits Condensed Consolidated Statements of Financial Condition (unaudited) | (dollars in thousands) | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Total assets** | **$9,720,218** | **$9,496,529** | | Net loans and leases | $7,220,328 | $6,808,834 | | Securities available-for-sale, at fair value | $1,575,240 | $1,415,696 | | Cash and cash equivalents | $218,350 | $563,138 | | **Total liabilities** | **$8,527,802** | **$8,405,032** | | Total deposits | $7,810,479 | $7,458,628 | | Other borrowings | $414,110 | $618,773 | | **Total stockholders' equity** | **$1,192,416** | **$1,091,497** | | **Total liabilities and stockholders' equity** | **$9,720,218** | **$9,496,529** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 net income was **$30.1 million** with **$0.66** diluted EPS, driven by higher net interest income despite increased provision for credit losses Condensed Consolidated Statements of Operations (unaudited) | (dollars in thousands, except per share data) | Three Months Ended June 30, 2025 (in thousands, except per share data) | Three Months Ended June 30, 2024 (in thousands, except per share data) | Six Months Ended June 30, 2025 (in thousands, except per share data) | Six Months Ended June 30, 2024 (in thousands, except per share data) | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $95,970 | $86,526 | $184,186 | $172,067 | | Provision for credit losses | $11,923 | $6,045 | $21,102 | $12,688 | | Total non-interest income | $14,483 | $12,844 | $29,347 | $28,317 | | Total non-interest expense | $59,602 | $53,210 | $116,031 | $107,019 | | **Net income** | **$30,082** | **$29,671** | **$58,330** | **$60,111** | | **Diluted earnings per common share** | **$0.66** | **$0.68** | **$1.30** | **$1.37** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was **$43.3 million** for H1 2025, with significant cash used in investing and financing activities, leading to a **$344.8 million** decrease in cash Summary of Cash Flows (Six Months Ended June 30) | (dollars in thousands) | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $43,326 | $102,482 | | Net cash used in investing activities | ($234,160) | ($284,202) | | Net cash provided by financing activities | ($153,954) | $686,041 | | **Net change in cash and cash equivalents** | **($344,788)** | **$504,321** | | Cash and cash equivalents, beginning of period | $563,138 | $226,136 | | **Cash and cash equivalents, end of period** | **$218,350** | **$730,457** | [Notes to Unaudited Interim Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes disclose the **First Security Bancorp acquisition**, a **$1.6 billion** securities portfolio, **$7.3 billion** loan portfolio, and specifics on deposits and capital - On April 1, 2025, the Company acquired First Security Bancorp, Inc. for a total consideration of approximately **$41.5 million**, resulting in **$147,000** of goodwill. Merger-related expenses of **$5.1 million** were recognized in the six months ended June 30, 2025[33](index=33&type=chunk)[34](index=34&type=chunk)[37](index=37&type=chunk) - The total loan and lease portfolio grew to **$7.33 billion** at June 30, 2025, from **$6.91 billion** at December 31, 2024. The allowance for credit losses (ACL) increased to **$107.7 million** (**1.47%** of total loans) from **$98.0 million** (**1.42%** of total loans)[52](index=52&type=chunk)[55](index=55&type=chunk)[302](index=302&type=chunk) - Total deposits increased to **$7.81 billion** at June 30, 2025, from **$7.46 billion** at year-end 2024, primarily driven by growth in money market accounts and the First Security acquisition[105](index=105&type=chunk)[273](index=273&type=chunk) - The Company repurchased **569,599 shares** for **$13.8 million** during the first six months of 2025 under its authorized stock repurchase program. A quarterly dividend of **$0.10 per share** was declared[181](index=181&type=chunk)[185](index=185&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2025 net income of **$30.1 million**, driven by increased net interest income and balance sheet expansion, while maintaining strong liquidity and capital Key Performance Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 (in millions, except percentages and per share data) | Q2 2024 (in millions, except percentages and per share data) | | :--- | :--- | :--- | | Net Income | $30.1M | $29.7M | | Diluted EPS | $0.66 | $0.68 | | Net Interest Margin | 4.18% | 3.98% | | Return on Average Assets | 1.25% | 1.31% | | Efficiency Ratio | 52.61% | 52.19% | | Adjusted Efficiency Ratio | 48.20% | 52.19% | - Net interest income for Q2 2025 increased by **$9.4 million** (**10.9%**) year-over-year, primarily due to lower rates paid on interest-bearing deposits and a change in deposit mix[242](index=242&type=chunk) - The provision for credit losses increased to **$11.9 million** in Q2 2025 from **$6.0 million** in Q2 2024, influenced by the First Security acquisition and weakening macroeconomic conditions[229](index=229&type=chunk)[251](index=251&type=chunk) - Total assets grew to **$9.7 billion**, a **2.4%** increase from year-end 2024, driven by a **$421.2 million** (**6.1%**) increase in loans and leases, reflecting both organic growth and the First Security acquisition[272](index=272&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=82&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages interest rate risk, its primary market risk, using NII and EVE models, showing asset sensitivity with a **4.1%** NII increase for a **+100 bps** rate hike Interest Rate Sensitivity Analysis (as of June 30, 2025) | Basis Point Change in Interest Rates | Estimated % Change in NII (Year 1) (in percentage) | Estimated % Change in EVE (in percentage) | | :--- | :--- | :--- | | +300 | 10.1% | (14.0)% | | +200 | 7.5% | (8.9)% | | +100 | 4.1% | (4.3)% | | -100 | (2.9)% | 3.9% | | -200 | (5.6)% | 6.1% | | -300 | (6.5)% | 5.6% | - The company's primary market risk is interest rate risk, which it manages through asset-liability strategies and the use of interest rate derivatives[357](index=357&type=chunk)[358](index=358&type=chunk) - As of June 30, 2025, the company had a notional amount of **$1.9 billion** of interest rate derivatives outstanding to manage interest rate exposure for both customers and its own balance sheet[362](index=362&type=chunk) [Item 4. Controls and Procedures](index=83&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[370](index=370&type=chunk) - No changes occurred in the company's internal control over financial reporting during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[371](index=371&type=chunk) [PART II. OTHER INFORMATION](index=84&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=84&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation, but no current proceedings are expected to have a material adverse effect on its financial condition - The company is not party to any legal proceedings expected to have a material adverse effect on its business or financial condition[375](index=375&type=chunk) [Item 1A. Risk Factors](index=84&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K were reported - No material changes to risk factors were reported since the filing of the 2024 Form 10-K[376](index=376&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=84&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **543,599 shares** during Q2 2025 under its stock repurchase program, which authorizes up to **1,250,000 shares** for 2025 Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share (in dollars) | Shares Purchased as Part of Program (in dollars) | | :--- | :--- | :--- | :--- | | April 2025 | 105,973 | $24.34 | 102,000 | | May 2025 | 25,390 | $26.37 | 23,364 | | June 2025 | 624,668 | $24.42 | 418,235 | | **Total Q2** | **756,031** | **$24.48** | **543,599** | - As of June 30, 2025, **782,401 shares** remained available for repurchase under the current program[379](index=379&type=chunk) [Item 3. Defaults Upon Senior Securities](index=84&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - There were no defaults upon senior securities during the period[380](index=380&type=chunk) [Item 4. Mine Safety Disclosures](index=84&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - This item is not applicable to the company[381](index=381&type=chunk) [Item 5. Other Information](index=84&type=section&id=Item%205.%20Other%20Information) No other information was reported for the period - There was no other information to report for the period[382](index=382&type=chunk) [Item 6. Exhibits](index=85&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL interactive data files - Exhibits filed include CEO and CFO certifications (31.1, 31.2, 32.1) and Inline XBRL financial data (101)[383](index=383&type=chunk)

Financial Data and Key Metrics Changes - The company reported net income of $30 million or $0.66 per diluted share on revenue of $110 million, with adjusted net income at $33.8 million or $0.75 per diluted share [13][14] - Total revenue increased by $7.4 million for the quarter, representing an 11% year-on-year growth [14] - The net interest margin expanded by 11 basis points to 4.18% compared to the prior quarter [16][24] - The efficiency ratio was excellent at 48.2% for the quarter, with a cost-to-asset ratio of 228 basis points, down 18 basis points from the prior quarter [16][18] Business Line Data and Key Metrics Changes - Total loans increased to $7.4 billion, with a growth of $307 million or 17.5% annualized, including $153 million from the First Security transaction [21] - Total deposits rose to $7.8 billion, up 13.7% annualized from the prior quarter, driven by money market and non-interest bearing demand accounts [23] - Non-interest income totaled $14.5 million, slightly lower than the prior quarter due to a negative fair value mark on servicing assets [25] Market Data and Key Metrics Changes - The company experienced a 9% increase in net interest income, attributed to higher balances and improved asset mix [15][24] - Loan origination activity was strong, with $359 million in new loans, up 16% quarter-over-quarter and 20% year-over-year [22] - The cost of deposits decreased by three basis points to 2.27% [23] Company Strategy and Development Direction - The company aims to become the preeminent commercial bank in Chicago, focusing on clear communication and execution of strategic plans [5][6] - The management emphasized a disciplined approach to risk and a commitment to employee engagement and development [9][10] - The company is well-positioned to seize opportunities for organic and inorganic growth while maintaining a sustainable dividend and share repurchase strategy [42][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the healthy customer activity and loan growth prospects despite macroeconomic uncertainties [37][38] - The company is prepared for potential regulatory changes as it approaches the $10 billion threshold, maintaining a long-term view on compliance [68][69] - The outlook for net interest income remains positive, with projections ranging from $95 million to $97 million for the next quarter [24] Other Important Information - The company repurchased approximately 418,000 shares, returning about $10 million to shareholders in addition to regular dividends [19][29] - The allowance for credit losses increased to $107.7 million, representing 1.47% of total loans, reflecting adjustments for macroeconomic conditions and loan growth [26][27] Q&A Session Summary Question: Insights on loan growth prospects - Management indicated that loan growth is a combination of gaining market share and improved client sentiment, with healthy customer activity continuing [35][38] Question: M&A opportunities and capital management - Conversations around M&A remain active, with management expressing a flexible approach to capital deployment, prioritizing organic growth and sustainable dividends [39][42] Question: Increase in nonaccrual loans and credit migration - Management noted that the increase in nonaccrual loans was not centered on a single line of business, and they are confident in their credit management strategies [45][48] Question: Securities portfolio growth outlook - Management indicated that they are likely to let cash flows run off and focus on funding loan growth rather than expanding the securities portfolio [54][55] Question: Cost outlook for the third quarter - The increase in costs is primarily related to the First Security acquisition, with guidance for the next quarter slightly higher due to marketing expenses [60][61] Question: Sustainability of earnings power - Management acknowledged that the earnings power has increased due to the First Security transaction and ongoing core business growth, but emphasized the need for continued execution [61][63]

Financial Performance - Byline's net income for 2Q25 was $30.1 million, with a diluted EPS of $0.66; adjusted EPS was $0.75[10] - Pre-Tax Pre-Provision income was $50.9 million, with a Pre-Tax Pre-Provision ROAA of 2.12%[12] - Revenue reached $110.5 million, up 7.2% quarter-over-quarter and 11.2% year-over-year[12] - The reported efficiency ratio was 52.61%, while the adjusted efficiency ratio was 48.20%[10] - Return on Average Assets (ROAA) was 1.25%, and the adjusted ROAA was 1.41%[10] - Return on Tangible Common Equity (ROTCE) was 12.83%, with an adjusted ROTCE of 14.37%[10] Balance Sheet and Portfolio Trends - Total assets were $9.7 billion[7] - Total loans and leases reached $7.4 billion, up $306.7 million or 17.5% from 1Q25[7, 18] - Total deposits amounted to $7.8 billion, an increase of $257.2 million or 13.7% from 1Q25[7, 23] - Non-interest-bearing demand deposits averaged $1.803 billion[19] - The average cost of deposits decreased by 3 bps to 2.27%[12, 23]

Core Insights - Byline Bancorp reported $110.45 million in revenue for Q2 2025, an 11.2% year-over-year increase, with an EPS of $0.75 compared to $0.68 a year ago, exceeding the Zacks Consensus Estimate of $107.45 million by 2.8% and delivering an EPS surprise of 11.94% [1] Financial Performance Metrics - Efficiency Ratio: 52.6% compared to the three-analyst average estimate of 53.7% [4] - Net Interest Margin: 4.2% versus the three-analyst average estimate of 4.1% [4] - Average Balance of Total Interest-Earning Assets: $9.21 billion compared to the $9.14 billion average estimate based on two analysts [4] - Net Charge-Offs of Loans and Leases: 0.4%, matching the two-analyst average estimate [4] - Net Interest Income: $95.97 million compared to the $92.54 million estimated by three analysts [4] - Net Gains on Sales of Loans: $5.41 million compared to the $5.06 million average estimate based on three analysts [4] - Total Non-Interest Income: $14.48 million compared to the $15.42 million average estimate based on three analysts [4] - Fees and Service Charges on Deposits: $2.63 million versus $2.88 million estimated by two analysts [4] - Wealth Management and Trust Income: $1.07 million compared to the $1.12 million average estimate based on two analysts [4] - ATM and Interchange Fees: $1.06 million versus $1.09 million estimated by two analysts [4] Stock Performance - Byline Bancorp shares returned +7.6% over the past month, outperforming the Zacks S&P 500 composite's +5.7% change, with a Zacks Rank 2 (Buy) indicating potential for near-term outperformance [3]

Group 1 - Byline Bancorp reported quarterly earnings of $0.75 per share, exceeding the Zacks Consensus Estimate of $0.67 per share, and showing an increase from $0.68 per share a year ago, resulting in an earnings surprise of +11.94% [1] - The company achieved revenues of $110.45 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.80%, and up from $99.37 million in the same quarter last year [2] - Byline Bancorp has consistently surpassed consensus EPS estimates over the last four quarters [2] Group 2 - The stock has underperformed the market, losing about 4.5% since the beginning of the year, while the S&P 500 has gained 8.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the upcoming quarter is $0.69 on revenues of $108.4 million, and for the current fiscal year, it is $2.69 on revenues of $428.15 million [7] Group 3 - The Zacks Industry Rank indicates that the Banks - Northeast industry is currently in the top 23% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8] - Byline Bancorp has a Zacks Rank 2 (Buy), indicating expectations for the stock to outperform the market in the near future [6]

[Financial Highlights and Executive Commentary](index=1&type=section&id=Byline%20Bancorp%2C%20Inc.%20Reports%20Second%20Quarter%202025%20Financial%20Results) Byline Bancorp reported strong Q2 2025 results, with net income of $30.1 million and a 4.18% NIM, boosted by the First Security acquisition Q2 2025 Financial Highlights ($ in thousands) | Metric | 2Q25 | 1Q25 | 2Q24 | | :--- | :--- | :--- | :--- | | Net Income | $30,082 | $28,248 | $29,671 | | Diluted EPS | $0.66 | $0.64 | $0.68 | | Adjusted Diluted EPS (Non-GAAP) | $0.75 | $0.65 | $0.68 | | Net Interest Income | $95,970 | $88,216 | $86,526 | | Net Interest Margin (NIM) | 4.18% | 4.07% | 3.98% | | Total Assets | $9,720,218 | $9,584,732 | $9,633,815 | | Tangible Book Value Per Share (Non-GAAP) | $21.56 | $20.91 | $18.84 | - Successfully completed and integrated the acquisition of First Security Bancorp, Inc., which is believed to have strengthened Byline's return profile[2](index=2&type=chunk) - Executive commentary emphasized strong quarterly performance characterized by solid earnings, profitability, NIM expansion, healthy loan and deposit growth, and controlled expenses[2](index=2&type=chunk) - The Board of Directors declared a cash dividend of **$0.10 per share**, payable on August 19, 2025[4](index=4&type=chunk) - The company repurchased **543,599 shares** of its common stock at an average price of **$24.09 per share** during the second quarter[2](index=2&type=chunk)[19](index=19&type=chunk) [Detailed Financial Analysis](index=3&type=section&id=Detailed%20Financial%20Analysis) Detailed analysis of Q2 2025 operations shows increased net interest income and improved efficiency, alongside asset and deposit growth [Statements of Operations Highlights](index=3&type=section&id=STATEMENTS%20OF%20OPERATIONS%20HIGHLIGHTS) Net interest income increased by 8.8% to $96.0 million, with NIM expanding to 4.18%, while expenses rose due to acquisition costs - Net interest income increased by **$7.8 million (8.8%)** from Q1 2025, primarily due to loan and lease portfolio growth from the First Security acquisition[5](index=5&type=chunk) - Tax-equivalent net interest margin expanded by **11 basis points to 4.19%** compared to Q1 2025, driven by higher yields on securities and lower borrowing costs[6](index=6&type=chunk) - The provision for credit losses increased by **$2.7 million to $11.9 million** compared to Q1 2025, mainly due to loan portfolio growth and a weaker macroeconomic forecast[8](index=8&type=chunk) - Non-interest income decreased by **$381,000 (2.6%)** from Q1 2025, primarily due to a larger downward revaluation of the loan servicing asset[9](index=9&type=chunk) - Non-interest expense increased by **$3.2 million (5.6%)** from Q1 2025, mainly due to costs associated with the First Security acquisition and a secondary public stock offering[10](index=10&type=chunk) - The adjusted efficiency ratio (non-GAAP) improved by **484 basis points to 48.20%** for Q2 2025, compared to 53.04% in Q1 2025[11](index=11&type=chunk) [Statements of Financial Condition Highlights](index=4&type=section&id=STATEMENTS%20OF%20FINANCIAL%20CONDITION%20HIGHLIGHTS) Total assets grew to $9.7 billion, driven by loan and deposit increases, while non-performing assets also rose - Total assets increased by **$135.5 million (1.4%) to $9.7 billion** at June 30, 2025, compared to March 31, 2025[14](index=14&type=chunk) - The Allowance for Credit Losses (ACL) increased by **$7.3 million to $107.7 million**, with the First Security acquisition contributing **$4.1 million** of the increase[15](index=15&type=chunk) - Net charge-offs rose to **$7.7 million (0.43% of average loans)** in Q2 2025, up from $6.6 million in Q1 2025[15](index=15&type=chunk) - Non-performing assets increased by **$12.6 million to $72.5 million**, representing **0.75% of total assets**[16](index=16&type=chunk) - Total deposits grew by **$257.2 million to $7.8 billion**, mainly due to increases in money market and non-interest-bearing accounts from the First Security acquisition[17](index=17&type=chunk) - Total stockholders' equity increased by **$61.3 million (5.4%) to $1.2 billion**, primarily due to common stock issued for the acquisition and an increase in retained earnings[19](index=19&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including balance sheets, income statements, and detailed financial ratios [Consolidated Statements of Financial Condition](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20FINANCIAL%20CONDITION%20%28unaudited%29) Total assets reached $9.72 billion, driven by increased net loans and deposits, while stockholders' equity grew to $1.19 billion Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Total Assets | $9,720,218 | $9,584,732 | $9,633,815 | | Net Loans and Leases | $7,220,328 | $6,925,417 | $6,791,474 | | Total Deposits | $7,810,479 | $7,553,308 | $7,347,181 | | Total Liabilities | $8,527,802 | $8,453,654 | $8,600,801 | | Total Stockholders' Equity | $1,192,416 | $1,131,078 | $1,033,014 | [Consolidated Statements of Operations](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20%28unaudited%29) Q2 2025 net interest income was $96.0 million, resulting in a net income of $30.1 million, or $0.66 per diluted share Consolidated Income Statement Highlights (in thousands) | Account | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income | $95,970 | $88,216 | $86,526 | | Provision for Credit Losses | $11,923 | $9,179 | $6,045 | | Total Non-interest Income | $14,483 | $14,864 | $12,844 | | Total Non-interest Expense | $59,602 | $56,429 | $53,210 | | Net Income | $30,082 | $28,248 | $29,671 | | Diluted EPS | $0.66 | $0.64 | $0.68 | [Selected Financial Data and Ratios](index=8&type=section&id=SELECTED%20FINANCIAL%20DATA%20%28unaudited%29) Key Q2 2025 ratios include a 4.18% net interest margin, 1.25% ROAA, and an improved 48.20% adjusted efficiency ratio Key Performance Ratios (Q2 2025) | Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Margin | 4.18% | 4.07% | 3.98% | | Adjusted Efficiency Ratio (Non-GAAP) | 48.20% | 53.04% | 52.19% | | Return on Average Assets (ROAA) | 1.25% | 1.25% | 1.31% | | Return on Avg. Tangible Common Equity (Non-GAAP) | 12.83% | 12.92% | 15.27% | | Tangible Common Equity to Tangible Assets (Non-GAAP) | 10.39% | 9.95% | 8.82% | | Common Equity Tier 1 Capital Ratio | 11.85% | 11.78% | 10.84% | [Analysis of Net Interest Margin](index=9&type=section&id=QUARTER-TO-DATE%20STATEMENT%20OF%20AVERAGE%20INTEREST-EARNING%20ASSETS%20AND%20AVERAGE%20INTEREST-BEARING%20LIABILITIES%20%28unaudited%29) Average interest-earning assets grew to $9.21 billion, with a favorable yield-cost dynamic leading to a 4.19% net interest margin Net Interest Margin Analysis | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Average Interest-Earning Assets ($ thousands) | $9,208,156 | $8,785,619 | $8,743,462 | | Average Yield on Earning Assets | 6.31% | 6.24% | 6.52% | | Average Cost of Interest-Bearing Liabilities | 3.00% | 3.07% | 3.62% | | Net Interest Spread | 3.31% | 3.17% | 2.90% | | Net Interest Margin (FTE) | 4.19% | 4.08% | 3.99% | [Loan Portfolio and Credit Quality Details](index=10&type=section&id=SELECTED%20BALANCE%20SHEET%20TABLES%20AND%20FINANCIAL%20RATIOS%20%28unaudited%29) Total loans and leases reached $7.33 billion, with ACL at $107.7 million, while non-performing loans increased to 0.92% - Total loans and leases reached **$7.33 billion**, with commercial and industrial (**37.4%**) and commercial real estate (**29.8%**) being the largest components of the originated portfolio[38](index=38&type=chunk) Allowance for Credit Losses (ACL) Activity (in thousands) | | Q2 2025 | | :--- | :--- | | Beginning ACL | $100,420 | | Adjustment for acquired PCD loans | $3,206 | | Provision for credit losses | $11,757 | | Net charge-offs | ($7,656) | | **Ending ACL** | **$107,727** | Non-Performing Assets (in thousands) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Non-performing loans and leases | $67,553 | $53,619 | $63,808 | | Other real estate owned | $4,946 | $6,249 | $780 | | **Total non-performing assets** | **$72,499** | **$59,868** | **$64,588** | | NPLs as % of total loans | 0.92% | 0.76% | 0.93% | [Deposit Composition](index=11&type=section&id=Deposit%20Composition) Total deposits increased by 3.4% to $7.81 billion, driven by growth in money market and non-interest-bearing accounts Deposit Composition (in thousands) | Deposit Type | June 30, 2025 | March 31, 2025 | % Change QoQ | | :--- | :--- | :--- | :--- | | Non-interest-bearing demand | $1,773,229 | $1,715,599 | 3.4% | | Money market demand accounts | $2,996,684 | $2,759,185 | 8.6% | | Time deposits (all) | $1,682,086 | $1,755,014 | -4.2% | | Other (Checking, Savings) | $1,358,480 | $1,323,510 | 2.6% | | **Total Deposits** | **$7,810,479** | **$7,553,308** | **3.4%** | [Reconciliation of Non-GAAP Financial Measures](index=12&type=section&id=RECONCILIATION%20OF%20NON-GAAP%20FINANCIAL%20MEASURES%20%28unaudited%29) This section reconciles non-GAAP financial measures, showing adjustments for merger and offering expenses to derive adjusted net income and EPS - Management uses non-GAAP financial measures to provide supplementary information on the company's financial condition and results, acknowledging they have limitations and should not be a substitute for GAAP[40](index=40&type=chunk) Reconciliation of Net Income and EPS (Q2 2025, in thousands) | Item | Amount | Per Share | | :--- | :--- | :--- | | **Reported Net Income / Diluted EPS** | **$30,082** | **$0.66** | | Merger-related expenses | $4,450 | $0.10 | | Secondary offering expenses | $413 | $0.01 | | Tax benefit on items | ($1,117) | ($0.02) | | **Adjusted Net Income / Diluted EPS** | **$33,828** | **$0.75** | Key Non-GAAP Reconciliations (Q2 2025) | Metric | GAAP Value | Adjustment | Non-GAAP Value | | :--- | :--- | :--- | :--- | | Non-interest Expense | $59.6M | ($4.9M) | $54.7M | | Pre-tax Pre-provision Net Income | $50.9M | $4.9M | $55.7M | | Efficiency Ratio | 52.61% | - | 48.20% (Adjusted) | | Tangible Common Equity | $1.19B | ($203.5M) | $988.9M |

Group 1 - The regional bank sector has experienced a strong rally over the past three months, but uncertainty remains for bank stocks, especially for commercial-focused players like Byline Bancorp [1] - A long-term, buy-and-hold investment strategy is favored, particularly for stocks that can consistently deliver high-quality earnings, often found in the dividend and income section [1] Group 2 - The article does not provide any specific financial data or performance metrics related to Byline Bancorp or the regional bank sector [1]

Core Viewpoint - Byline Bancorp (BY) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling pressure that affects stock prices [4][5]. Byline Bancorp's Earnings Outlook - Byline Bancorp is projected to earn $2.69 per share for the fiscal year ending December 2025, with no year-over-year change expected [8]. - Over the past three months, the Zacks Consensus Estimate for Byline Bancorp has increased by 2.5%, reflecting a positive trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% receiving a "Strong Buy" or "Buy" rating [9][10]. - Byline Bancorp's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].