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].

Financial Data and Key Metrics Changes - Byline Bancorp reported a net income of $121 million or $2.75 per diluted share on revenue of $407 million, which was up 5% year on year [8] - Total assets grew to $9.5 billion, with loans and leases increasing to $6.9 billion, funded by deposits that grew to $7.5 billion [8] - Key profitability metrics include a pretax return on assets (ROA) of 205 basis points, return on assets of 131 basis points, and return on tangible common equity of just under 15% [8][9] - The cost to asset ratio improved by 22 basis points to 2.38% due to positive operating leverage [9] Business Line Data and Key Metrics Changes - The company has developed a distinct commercial banking franchise with a focus on relationship-driven approaches, which has attracted top-tier talent [6] - Investments in new capabilities have helped the company meet customer financial goals effectively [5] Market Data and Key Metrics Changes - Byline Bancorp's financial results ranked in the top quartile of its peer group on several important profitability and performance metrics [6] Company Strategy and Development Direction - The company aims to become the preeminent commercial bank in Chicago, focusing on attracting and developing talent, acquiring new customers, deepening relationships, and growing deposits and loans [5][6] - The strategy includes maintaining credit and pricing discipline while investing for long-term growth [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong position and the trust earned from customers, indicating a bright future ahead [6] - The company is committed to creating long-term value by empowering customers and fostering an innovative culture [9] Other Important Information - In 2024, Byline Bancorp supported local communities with $130 million in community development loans and $103 million in community development investments [9] Q&A Session Summary - There were no questions submitted during the Q&A session, and the meeting was adjourned without any inquiries [25]

Core Viewpoint - Byline Bancorp (BY) has received an upgrade to Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in a company's earnings outlook, which is closely correlated with stock price movements [4][6]. - Rising earnings estimates for Byline Bancorp suggest an improvement in the company's underlying business, potentially leading to higher stock prices [5][10]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [7][9]. - Byline Bancorp's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10]. Earnings Estimate Revisions - For the fiscal year ending December 2025, Byline Bancorp is expected to earn $2.68 per share, reflecting a -2.9% change from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Byline Bancorp has increased by 2.8%, indicating positive revisions from analysts [8].

Core Insights - Byline Bancorp, a regional bank based in Chicago, has expanded its fintech banking capabilities through new hires and services, indicating growth in this division [1] Company Developments - The bank's recent announcement highlights its commitment to enhancing its fintech banking operations, which are already experiencing rapid growth [1] Market Context - The financial market is characterized by efficiency, with most stocks reflecting their true value, suggesting that opportunities may exist in less-followed stocks or those mispriced in the market [1]