Financial Data and Key Metrics Changes - The company reported core earnings per share of $1.13, core return on assets (ROA) of 1.29%, core pre-provision net revenue (PPNR) of $104.6 million, and core return on tangible common equity of 16.97%, all showing improvements from the prior quarter [5][10] - Net interest margin expanded by eight basis points to 3.88%, reflecting a reduction in total funding cost by 15 basis points to 1.77% [5][6] - Total net credit costs increased to $17.6 million, up $8.9 million from the previous quarter, with net charge-offs at $24.6 million [9] Business Line Data and Key Metrics Changes - Core fee revenue grew by 6% year over year, driven by a 19% increase in wealth and trust services [6] - Institutional Services showed strong year-over-year growth, contributing to higher deal flow [6] - Cash Connect fees declined quarter over quarter due to seasonally lower volumes, but profit margins improved through expense and pricing offsets [7] Market Data and Key Metrics Changes - Client deposits declined by 1% linked quarter but increased by 4% year over year, with non-interest bearing deposits up by 6% year over year [8] - The loan to deposit ratio remained stable at 77%, providing flexibility for future growth [8] Company Strategy and Development Direction - The company plans to target a CET1 ratio of 12% in the medium term, with a gradual glide path over two to three years [11][56] - The company is committed to returning capital to shareholders, having returned $62.6 million in capital during the first quarter, including $53.8 million in buybacks and a 13% increase in the quarterly dividend [10][11] Management's Comments on Operating Environment and Future Outlook - Management noted that clients are cautious about expansion due to macroeconomic uncertainty, leading to postponed investments [32][33] - The company remains engaged with clients and is monitoring the overall environment closely, indicating a stable outlook despite current challenges [9][20] Other Important Information - The company has a strong capital position with a CET1 ratio of 14.1% and TCE of 8.63%, significantly above regulatory targets [10] - The company is actively managing its net interest margin through various tools, including deposit beta management and optimization of wholesale funding [45][46] Q&A Session Summary Question: Why was there no updated guidance in the presentation? - Management stated that it is typical to update guidance after the second quarter due to the volatility of the environment, and there is nothing to read into the absence of guidance this quarter [16][17] Question: What is the outlook for net charge-offs? - Management indicated that the increase in charge-offs was primarily due to a one-off item and that the rest of the portfolio is performing as expected [19][20] Question: How should expenses be viewed going forward? - Management provided insights on seasonal impacts and one-time items affecting expenses, suggesting a run rate between the first and fourth quarters [21][24] Question: What is the outlook for commercial growth? - Management noted that clients are cautious about expansion due to market volatility, but the pipeline remains consistent [32][33] Question: How are deposit beta expectations evolving? - Management exceeded their initial goal for deposit beta, reaching 38% this quarter, and plans to continue pushing higher [44][45] Question: What is the medium-term target for CET1? - Management indicated a two to three-year glide path to a 12% CET1 target, with discretion to adjust based on macroeconomic conditions [56][57] Question: How does the macro environment impact buyback decisions? - Management expressed confidence in their capital position but acknowledged the need to monitor the macro environment for any changes [59][60]

Byline Bancorp (BY) Q1 2025 Earnings Call April 25, 2025 10:00 AM ET Company Participants Brooks Rennie - Head-Investor RelationsAlberto Paracchini - PresidentRoberto Herencia - Chairman and CEOThomas J. Bell - Executive VP, Treasurer & CFOMark Fucinato - Executive VP & Chief Credit OfficerBrendan Nosal - Director - Equity ResearchDamon Delmonte - Managing DirectorTerry Mcevoy - Managing DirectorBrian Martin - Director - Banks & Thrifts Conference Call Participants Nathan Race - Managing Director & Senior R ...

1st Quarter 2025 Highlights: Diluted earnings per share for the current quarter was $0.48 per share, a decrease of 11 percent from the prior quarter diluted earnings per share of $0.54 per share and an increase of 66 percent from the prior year first quarter diluted earnings per share of $0.29 per share.Net income was $54.6 million for the current quarter, a decrease of $7.2 million, or 12 percent, from the prior quarter net income of $61.8 million and an increase of $21.9 million, or 67 percent, from the p ...

Core Points - BayFirst Financial Corp. reported a net loss of $0.3 million, or $0.17 per common share, for Q1 2025, a significant decrease from a net income of $9.8 million in Q4 2024 [1][5][27] - The company experienced net interest margin expansion to 3.77%, up 17 basis points from Q4 2024, and 35 basis points from Q1 2024 [3][6][27] - Total loans held for investment increased by $18.3 million, or 1.7%, during Q1 2025, and by $149.9 million, or 16.0%, year-over-year [3][13][27] - Noninterest income decreased to $8.8 million in Q1 2025 from $22.3 million in Q4 2024, primarily due to lower borrower demand and a significant gain on sale of branch properties in the previous quarter [9][10][27] - The company announced a share repurchase program allowing for the repurchase of up to $2.0 million of outstanding shares [21] - A second quarter cash dividend of $0.08 per common share was declared, continuing the company's history of quarterly dividends since 2016 [22] Financial Performance - Net interest income from continuing operations was $11.0 million in Q1 2025, an increase from $10.7 million in Q4 2024 and $8.7 million in Q1 2024 [6][8][27] - Noninterest expense increased to $15.8 million in Q1 2025 from $15.3 million in Q4 2024, but decreased from $17.8 million in Q1 2024 [10][27] - The provision for credit losses was $4.4 million in Q1 2025, compared to $4.5 million in Q4 2024 and $4.1 million in Q1 2024 [15][27] Asset Quality - The ratio of allowance for credit losses (ACL) to total loans held for investment was 1.61% as of March 31, 2025, slightly up from 1.54% at the end of 2024 [16][27] - Net charge-offs for Q1 2025 were $3.3 million, a decrease from $3.4 million in Q4 2024 and $3.7 million in Q1 2024 [17][27] - Nonperforming assets increased to 2.08% of total assets as of March 31, 2025, compared to 1.50% at the end of 2024 [17][27] Balance Sheet - Total assets increased by $3.7 million, or 0.3%, during Q1 2025, reaching $1.29 billion, driven by loan growth [12][27] - Total deposits decreased by $15.0 million, or 1.3%, during Q1 2025, but increased by $121.0 million, or 12.0%, year-over-year [14][27] - The company had $20.0 million of borrowings from the Federal Home Loan Bank as of March 31, 2025, compared to no borrowings at the end of 2024 [20][27] Strategic Initiatives - The company aims to grow recurring revenue through net interest income, reducing reliance on gains from government guaranteed loans [2][3] - A focus on expanding low-cost deposit accounts to fund the growing loan portfolio is part of the strategic plan [2][3]

Financial Data and Key Metrics Changes - The company reported a net income of $77 million, or $0.47 per share, compared to $76 million, or $0.46 per share, in the previous quarter, reflecting a solid return on average assets of 1.64% [13][14] - Net interest income for the quarter was $212 million, an increase of $3 million from the prior quarter, with a net interest margin expanding by 19 basis points to 4.52% [14][17] - The efficiency ratio improved to 49.6% from 51.6% in the previous quarter, indicating better cost management [20] Business Line Data and Key Metrics Changes - Total loans were slightly down on a linked quarter basis, but originations were healthy at $1.2 billion, consistent with typical first-quarter performance [6][7] - Core deposit flows remained stable, with non-interest-bearing deposits increasing by $70 million [7] - Credit performance was stable, with early delinquency rates decreasing compared to the prior quarter [8][22] Market Data and Key Metrics Changes - Consumer confidence is currently uncertain due to pending fiscal policies and tariffs, impacting overall market sentiment [9] - Year-to-date fiscal government tax collections increased by 3%, and the unemployment rate remained low [9] Company Strategy and Development Direction - The company continues to focus on margin expansion and maintaining a healthy balance sheet while navigating economic uncertainties [5][11] - There is an ongoing investment in digital infrastructure, including a transition to a centralized cloud system [10] - The company aims to deploy excess capital thoughtfully to enhance franchise and shareholder value [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about loan growth in the second half of the year, contingent on the resolution of current market uncertainties [54][57] - The company anticipates a normalization of consumer credit metrics, expecting improvements in charge-off rates year-over-year [58][59] Other Important Information - The company redeemed approximately $50 million in subordinated debentures and declared $30 million in common stock dividends during the quarter [8][25] - The tangible book value per share increased by 7% to $10.64, with a tangible common equity ratio expanding to 9.1% [25] Q&A Session Summary Question: Can you provide details on the yields for the second half of the year? - The expected yields for the second half of the year are projected to be around 1.35% to 1.40% [28] Question: What assumptions are made regarding margin expansion? - The company assumes a pickup of around 150 to 300 basis points, considering potential rate reductions [30] Question: What is the outlook for loan growth? - Loan growth is expected to be more pronounced in the second half of the year, with a good pipeline currently in place [56] Question: How is the company managing deposit flows? - The company is seeing more stability in deposit flows compared to previous years, with growth in core transaction and non-interest-bearing deposits [65] Question: What is the company's exposure to the Florida condo market? - The company has very limited exposure to the condo market in Florida, primarily in the mortgage portfolio [83]

Financial Data and Key Metrics Changes - The company reported a first quarter annualized loan growth of 17%, which was better than expected, with future quarters likely to normalize to a range of 8% to 12% [5][6] - Total deposits increased by approximately $54.6 million during the quarter, reflecting an annualized growth of about 8.5% [6][21] - Operating net income declined by $1.1 million in the first quarter, primarily due to seasonal declines in noninterest income [14] - Net interest income increased by approximately $480,000, driven by loan growth and a reduction in the cost of funds [15] - The net interest margin increased by 9 basis points to 2.93% from 2.84% in the prior quarter [15] Business Line Data and Key Metrics Changes - Noninterest income decreased by about $1.7 million, largely due to reduced activity in the SBSL division [16] - Revenues in the mortgage division were slightly higher, and the division remained profitable [16] - The company is optimistic about the SPSL division, expecting a return to previous levels of activity as the year progresses [32] Market Data and Key Metrics Changes - The company noted that it has not seen significant impacts on its loan portfolio from recent market volatility and trade dynamics [10][11] - Nonperforming assets were reported at $12.4 million, with classified loans at $26.4 million, indicating historically low levels [19] Company Strategy and Development Direction - The company is focused on growing its noninterest income through acquisitions, such as the recent acquisition of the LOB agency [7][8] - A new credit card program for both consumer and commercial markets was launched, aimed at generating significant interest income over time [9] - The company is actively monitoring market conditions and is prepared to engage in M&A activities as opportunities arise [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current market conditions, emphasizing proactive communication with customers [10][11] - There is an expectation of continued loan growth, although it may not match the high levels seen in the first quarter [20] - Management remains optimistic about the long-term outlook despite short-term disruptions due to trade policies [31] Other Important Information - The company repurchased 38,000 shares at an average price of $16.45 as part of its stock repurchase program [23] - A quarterly cash dividend of 11.5¢ per share was declared by the board [23] - The company plans to establish an active shelf registration for future capital management flexibility [24] Q&A Session Summary Question: What are the trends and expectations for SPSL, loan growth, and asset quality? - Management noted that they are vigilant regarding the impact of tariffs and trade policies on customers, but customers have become more aware of their supply chains post-COVID, which is expected to mitigate disruptions [29][30][31] - There is good activity in the SPSL pipeline, and management expects a return to historical levels of production [32] Question: What net interest margin impact do you expect from a 25 basis point rate cut? - Management believes they are well-positioned for potential rate cuts, which could improve margins through repricing of assets and a reduction in the cost of funds [33][34] - The company anticipates that earning asset yields will increase while costs decrease, positively impacting overall margins [36]

Financial Data and Key Metrics Changes - Operating earnings were reported at $0.59 per share, with an operating return on assets of 1.04%, both showing solid improvements from the previous year [4] - Loans grew at an annualized pace of just over 5%, while deposits also grew at an annualized rate of 5% [4] - The net interest margin increased by 10 basis points over the fourth quarter, driven by lower deposit costs [4][13] Business Line Data and Key Metrics Changes - The loan portfolio saw a 7% annualized growth in commercial and industrial (C&I) loans, including owner-occupied commercial real estate [10] - The Navitas book experienced a 15% annualized growth, while home equity line of credit (HELOC) loans grew by 13% annualized [10] - Non-interest income decreased by $4.8 million from the previous quarter, but the run rate of fee income remained flat when excluding notable items from the last quarter [14] Market Data and Key Metrics Changes - Deposit growth was strong, with $309 million in deposits or 5.3% annualized growth, despite approximately $85 million in seasonal public fund outflows [8] - The cost of total deposits improved by 15 basis points during the quarter, with a total deposit beta of 30% [9] Company Strategy and Development Direction - The company is well-positioned to succeed despite economic uncertainties, with a focus on maintaining strong client relationships and adapting to market changes [7] - The acquisition of American National Bank is set to close on May 1, marking a strategic expansion into South Florida [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current economic environment, noting that consumer spending and employment in their markets remain strong [7] - There are concerns regarding potential impacts from tariffs, but management believes that clients are adapting quickly to maintain margins [7][29] Other Important Information - The Common Equity Tier 1 (CET1) ratio increased to 13.3%, indicating a strong capital position [12] - The total capital ratios remain above peers, allowing the company to be opportunistic in capital use [12] Q&A Session Summary Question: Margin expectations going forward - Management expects margins to increase by 5 to 10 basis points next quarter, driven by lower deposit costs and a shift in the mix between loans and securities [23][24] Question: Borrower behavior and pipelines - There has not been a negative impact on pipelines, with Q2 expected to be similar to Q1 [38] Question: SBA and fee income challenges - The company is a preferred lender for SBA loans, which mitigates potential headwinds in gaining approvals [40] Question: Operating expenses outlook - Operating expenses are expected to remain in the low single-digit growth range, with some seasonal increases anticipated [41] Question: Capital priorities and share repurchase - Management indicated a preference for share buybacks over M&A at current stock prices, viewing it as a low-risk investment [46] Question: Loan loss reserves and economic scenarios - The company uses Moody's scenarios for loan loss reserves, balancing economic forecasts with actual portfolio performance [51][52] Question: Deposit growth drivers - Strong deposit growth was attributed to the maturity of CDs and a focus on money market accounts [60][61] Question: M&A environment outlook - Conversations regarding M&A continue, but management does not expect significant activity in the next 12 to 18 months due to market conditions [66] Question: Navitas loan sales outlook - Management indicated that they may not sell Navitas loans in the second quarter, focusing on maintaining high-quality credit on the balance sheet [72]

Financial Data and Key Metrics Changes - In 2024, the company achieved a record annual net income of $206 million, a 24% increase from the previous year, with a return on equity of 16.2%, up from 14.7% in 2023 [19][11] - The commercial portfolio grew by 18%, reaching $10 billion, while deposits increased by 23% for year-end closing balances and 33% in average balances for the year [7][8] - The net interest income for the year reached $259 million, an 11% increase from the prior year, with a stable net interest margin of 2.47% [34][10] Business Line Data and Key Metrics Changes - The credit portfolio stood at approximately $11.2 billion, reflecting an 18% increase year-over-year, driven by a loan growth of $1.2 billion or 16% [24][22] - Fee income reached unprecedented levels, growing by 37% compared to the previous year, with letters of credit fees totaling $26.5 million for the year, up 24% year-over-year [35][36] Market Data and Key Metrics Changes - The company noted strong growth in Brazil, the Dominican Republic, and Guatemala, indicating robust expansion and diversification in these markets [7] - The deposit base closed at $5.4 billion at year-end, representing 54% of total financial liabilities, with significant increases from corporate clients [26] Company Strategy and Development Direction - The company is currently in the second phase of its five-year strategic plan, focusing on expanding its product offerings and deploying technological platforms [15][17] - The trade finance platform is 56% complete and expected to launch in the second half of the year, aimed at enhancing transaction processing capabilities [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in adapting to changes in the trade environment, particularly regarding the implications of U.S. foreign policy on Latin America [44][45] - Projections for 2025 include a commercial portfolio growth of 10% to 12% and average deposits expected to increase by 15% to 17% [50] Other Important Information - The company maintained a strong capital ratio with a tier one capital ratio of 15.5%, well within its defined target [10] - The board approved an increase in the quarterly dividend from $0.50 to $0.625 per share, reflecting confidence in the company's earnings trajectory [31] Q&A Session Summary Question: Can you comment on NIM contraction estimate for 2025? - Management indicated that tighter lending spreads and competitive market conditions are contributing factors, with expectations of continued pressure [60][62] Question: What are the potential drivers for the loan structuring syndication business? - Management noted a strong pipeline and historical growth in syndication fees, driven by project finance and enhanced structuring capabilities [63][64] Question: How do you see the current tariffs affecting the company's outlook? - Management expressed confidence in the resilience of the Mexican portfolio, with stress tests indicating low leverage among key clients [70][71] Question: What is the expected target for provisions in 2025? - Management projected reserves for 2025 to be in the $17 to $20 million range, similar to 2024 levels [95] Question: What countries are expected to lead portfolio growth in 2025? - Management indicated balanced growth across countries, with a focus on Mexico and potential opportunities in Central America and Argentina [92][94]