Byline Bancorp, Inc.'s (BY) Transcript of the Second Quarter Earnings Conference Call in 2025

Byline Bancorp, Inc.'s (BY) Transcript of the Second Quarter Earnings Conference Call in 2025

Byline Bancorp, a leading financial institution based in Chicago, has announced impressive financial results for the second quarter of 2025. The company's performance was significantly boosted by the acquisition of First Security Bancorp, which added approximately $153 million in loans and $279 million in deposits to Byline's balance sheet.

Loans and Deposits Growth

The transaction contributed to a total loan portfolio increase to $7.35 billion and total deposits rising to $7.8 billion in Q2 2025. Loans and leases grew by about $306.7 million quarter over quarter and $449.3 million compared to Q2 2024. Deposits increased by $257.2 million quarter over quarter and $463.3 million year over year, reflecting a 6.3% increase from the previous year. The loan-to-deposit ratio was a balanced 92.64%, with commercial loans making up 39% of the portfolio, highlighting expansion in the Chicago market.

Net Interest Income Enhancement

The integration leveraged a diversified mix of deposits with 44.8% in money market and savings accounts, providing low-cost funding that supports net interest income growth. The average yield on loans slightly decreased from 7.47% to 7.12% year-over-year, but the overall loan growth and deposit funding supported net interest margin and income expansion.

Mixed Results for Noninterest Income

Noninterest income overall saw a slight decline of $381,000 quarter over quarter, mainly due to lower revaluation of loan servicing assets and smaller fair value gains on securities. However, gains from SBA loan sales increased by 9.7% from the previous quarter, reaching $5.4 million, reflecting the bank’s active lending and loan sales activity, which is part of diversified noninterest income streams.

Operational Efficiency Improvement

The acquisition was integrated with minimal disruption, including a smooth core system conversion of 2,600 deposit accounts, resulting in a 484-basis-point improvement in the adjusted efficiency ratio to 48.20% despite nearly $700,000 in merger-related costs.

Awards and Recognition

Byline Bancorp received several awards in June and July 2025, including being named one of the 2025 Chicago Sun-Times Best Workplaces, U.S. News & World Report's 2025 Best Companies to Work For in 3 categories, and Forbes America's Best in State Banks. These awards are based on employee engagement survey data and reflect the company's employee programs, work-life balance, job and company stability, physical and psychological comfort, and sense of belonging and esteem.

Looking Ahead

Byline Bancorp's focus is on becoming the preeminent commercial bank in Chicago. The company expects loan growth to be in the upper end of its mid-single-digit range for the second half of 2025. The company plans to attend the Raymond James Bank Conference in Chicago and the Stephens Bank Forum in Little Rock in September 2025.

[1] Byline Bancorp Q2 2025 Earnings Release [2] Byline Bancorp Q2 2025 Earnings Conference Call Transcript [3] U.S. News & World Report's 2025 Best Companies to Work For [4] Forbes America's Best in State Banks 2025 [5] Chicago Sun-Times Best Workplaces 2025

1. The acquisition of First Security Bancorp, contributing to a significant increase in Byline Bancorp's loan and deposit portfolio, has opened up opportunities for expansion in the health, insurance, and environmental sectors, given the diversified nature of Byline's commercial loans.
2. Byline Bancorp's growth in net interest income reflects a strategic focus on environmental, social, and governance (ESG) factors, as the diversified mix of deposits supports low-cost funding that facilitates growth in key areas such as health and sustainable financing.

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