Byline Bancorp(US:BY)2022-04-29 18:13Financial Data and Key Metrics Changes - Net income for Q1 2022 was $22.3 million or $0.58 per diluted share, an increase compared to the previous quarter and year-ago period [11] - Revenue for the quarter was $78.2 million, slightly lower than the linked quarter but up 8% year-over-year [11] - Return on average assets (ROAA) was 1.35% and return on tangible common equity (ROTCE) was 14.4% [11] - Pre-tax pre-provision revenue was $33.6 million, with a pre-tax pre-provision ROAA of 2.03% [11] Business Line Data and Key Metrics Changes - Loans excluding PPP increased by $339 million or 31% annualized, totaling $4.8 billion at quarter-end [12] - The company originated $325 million in loans for the quarter, up from $280 million in the prior quarter [13] - Government guaranteed lending closed $129 million in loans, up 16% year-over-year [14] - Total deposits grew by $375 million or 30% annualized, reaching a record level of $5.5 billion [15] Market Data and Key Metrics Changes - Deposit costs remained flat at a cycle low of 8 basis points [15] - The mix of deposits remained strong, with demand deposit accounts (DDAs) representing 41% of balances [15] - Net interest income was $19.4 million, up 2% from the last quarter and 23% year-over-year [17] Company Strategy and Development Direction - The company remains focused on executing its strategy despite geopolitical uncertainty and high inflation [34] - There is optimism about growth opportunities both organically and through M&A [35] - The company aims to continue returning capital to shareholders while supporting organic growth [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current volatile environment but expressed confidence in the company's strong performance and credit quality [8][10] - The outlook for the rest of the year is optimistic, with strong pipelines and diversified business [35] - Management remains vigilant regarding credit quality and potential macroeconomic impacts [61] Other Important Information - The efficiency ratio improved to just under 55% for the quarter [18] - Capital ratios remained strong, with CET1 and total capital ratios just under 11% and 14% respectively [19] - The company returned 50% of its earnings to shareholders through dividends and share repurchases [33] Q&A Session Summary Question: Drivers of deposit growth in the quarter - Management indicated that deposit growth was a combination of share gains, existing relationships, and increased liquidity in the system [39] Question: Margin outlook going forward - Management expects net interest margin to expand, with guidance on additional net interest income from rate increases [41][42] Question: Government guaranteed lending segment origination capabilities - Management expressed confidence in the team's ability to execute and maintain a robust pipeline despite market dynamics [44] Question: Loan growth guidance and potential slowdowns - Management reaffirmed high single-digit growth guidance, attributing strong performance to muted payoffs and increased line utilization [47][49] Question: Key expense guidance and hiring plans - Management confirmed that the expense guidance includes room for new hires due to active market conditions [51] Question: Expectations for deposit costs and competition - Management noted that while competition is currently low, they anticipate deposit costs to rise as rates increase [54] Question: Outlook on credit quality and provisions - Management remains vigilant regarding credit quality, expecting to provision as loan growth continues [61] Question: M&A environment and dialogue - Management indicated that dialogue around M&A remains strong despite market adjustments [72]