Byline Bancorp (NYSE:BY) held its first-quarter earnings conference call on Friday. Below is the complete transcript from the call.
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View the webcast at https://events.q4inc.com/attendee/539835327
Summary
Byline Bancorp reported strong financial performance with a net income of $37.6 million and EPS of $0.83 per share, reflecting growth of 8.9% and 9.2%, respectively.
The company maintained a solid balance sheet with total deposits increasing by 8.2% annualized to $7.8 billion, while loan balances were slightly lower due to planned runoff of acquired loan portfolios.
Operational highlights included being named a U.S. Best in Class Employer and the top SBA 7A lender in Illinois for the 16th consecutive year.
Capital levels remain robust with a CET1 ratio over 12.5% and a share repurchase program in place, returning 40% of net income to shareholders through stock buybacks and dividends.
Management remains optimistic about future prospects, citing stable credit quality, disciplined expense management, and ongoing strategic initiatives to drive growth.
Full Transcript
OPERATOR
Good morning and welcome to Byline Bancorp first quarter 2026 earnings call. My name is Tiffany and I will be your conference operator today. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question and answer period. If you would like to ask a question, simply press the star followed by the number one on your telephone. If you would like to withdraw your question, simply press star one again. If you are listening via speakerphone, please lift your handset prior to asking your question. If you require operator assistance, please press star then zero. Please note the conference call is being recorded at this time. I would like to introduce Brooks Reaney, Head of Investor Relations for Byline Bancorp, to begin the conference call.
Brooks Reaney (Head of Investor Relations)
Thank you, Tiffany. Good morning everyone and thank you for joining us today for the Byline Bancorp First Quarter 2026 Earnings Call. In accordance with Regulation FD, this call is being recorded and is available via webcast on our investor relations website along with our earnings release and the corresponding presentation slides. As part of today’s call, management may make certain statements that constitute projections, beliefs or other forward looking statements regarding future events, the future financial performance of the company. We caution that such statements are subject to certain risks, uncertainties and other factors that could cause actual results to differ materially from those discussed. The Company’s risk factors are disclosed and discussed in its SEC filings. In addition, our remarks and slides may reference and contain certain non GAAP financial measures which are intended to supplement but not substitute for the most directly comparable GAAP measures. Reconciliation of each non GAAP financial measure to the comparable GAAP financial measure can be found within the appendix of the earnings release. For additional information about risks and uncertainties, please see the forward looking statement and non GAAP financial measure disclosures in the earnings release. As a reminder for investors during the quarter, we plan to participate in two upcoming conferences here in Chicago. The Stevens Chicago bank tour on May 14 and the Raymond James Chicago Bank Symposium on May 28. With that, I’ll now turn the call over to Alberto Farcini, President of of Byline Bancorp.
Alberto Farcini (President)
Great. Thank you. Brooks. Good morning and welcome to Byline’s first quarter earnings call. We appreciate all of you taking the time to join the call this morning. With me today are Chairman and CEO Roberto Horencia, our CFO Tom Bell and our Chief Credit Officer Mark Fusinato. Before we get started, I’d like to pass the call over to Roberto for his comments. Roberto.
Roberto Herencia
Thank you, Alberto and good morning to all. As Alberto said. We do appreciate you joining us today and taking the time to engage with Byline. Markets in general continue to offer plenty of distractions and at times entertainment. Shifting interest rate expectations, inconsistent economic signals, policy uncertainty and heightened geopolitical tensions. With the Iran tensions at the center of it and its broader implications, these add another layer of complexity for businesses and investors alike. We have learned over time that durable results do not come from reacting to every headline. They come from being anchored to purpose, discipline, execution and long term thinking. So we remain focused on driving value for our stockholders as we work and make progress, I may add, toward becoming the preeminent commercial bank in Chicago. We started the year with another strong quarter. Roa, ptpp, NIM and Efficiency remain among the best in class. Tangible book value growth of 14% year over year are also knocking on the door of best in class. Our balance sheet remains strong and positioned to support customers through the cycle. I want to recognize what matters deeply to us. Our people by land bank was recently honored as a U.S. best in Class Employer in Gallagher’s 2025 U.S. benefits Strategy and Benchmarking Survey. We were also named to Newsweek’s America’s Greatest Mid Sized Workplaces for Women, highlighting our dedication to practices grounded in transparency, professional development and flexibility, empowering women to build careers that grow with their lives. These awards reflect effective people strategies with measurable outcomes including employee well being and engagement. They reinforce our people first approach and strengthens our ability to attract, retain and develop top talent in a very competitive environment. I would like to point out that our SBA platform continues to perform well. For the 16th consecutive year, our team ranked as the number one SBA 7A lender in Illinois according to the most recently published fiscal year rankings. This kind of consistency does not happen by accident. It reflects decades of experience, disciplined execution and the dedication of an outstanding team. I would also like to recognize two individuals who have been familiar voices to many of us for a long time. This marks the end of an era as Terry McAvoy of Stevens and David Long of Raymond James step into new chapters in their careers. Collectively as sell side analysts, they’ve covered more than 200 earning seasons and more importantly, they brought professionalism, consistency and thoughtful engagement to their work. We are grateful for the time they spent covering Bylane and for the relationships built over many years. On behalf of the Board and the entire management team. We wish both Terry and David continued success in their new roles. To close I remain very optimistic about byline. We are operating with clarity of purpose supported by strong fundamentals an engaged workforce and a resilient business model. We are very focused on compounding returns the right way through prudent growth, disciplined risk management and an unwavering commitment to our people and customers. With that, Alberto, back to you. Great.
Alberto Farcini (President)
Thank you Roberto. As is our normal practice, I’ll start with the highlights for the quarter, followed by Tom who’ll take you through the financials and then I’ll come back to wrap up before we open the call up for questions. As always, you can find the deck we’re using this morning on the IR section of our website and please refer to the disclaimer at the front. Turning to slide four on the deck Overall, I’m pleased to report that we had a solid start to the year and delivered another excellent quarter. Earnings momentum continued along with strong profitability, disciplined expense management and stable credit quality despite an evolving macro and geopolitical backdrop. For the quarter, we reported net income of 37.6 million and EPS of $0.83 per diluted share, representing growth of 8.9% and 9.2% respectively. Profitability was strong with ROA of 156 basis points and ROTCE of 13.77%. Pre tax preparation income totaled 55.2 million, resulting in a pre tax preparation margin of 229 basis points points, which marks the 14th consecutive quarter in which this metric exceeded 2%, reflecting the durability and consistency of our operating results. Total revenues were 1:12.4 million for the quarter. Net interest income remained solid at just under 100 million, while non interest income was lower at 12.5 million, largely due to lower fair value marks. For the quarter, the margin remains stable at 4.33% notwithstanding a lower day count and lower yields. This was offset by a drop in deposit costs driven by a better mix coupled with pricing discipline, which Tom will cover in more detail shortly. From a balance sheet standpoint, total deposits increased 8.2% annualized to 7.8 billion, reflecting growth across both quarters. Core as well as time deposits. Loan balances were modestly lower linked quarter as payoffs more than offset solid origination activity of $241 million. Expenses remain well managed at 57 million, down 5.3% from the prior quarter, with our efficiency ratio improving to 49.8% for the first quarter, one of the lowest levels we’ve reported since becoming a public company. Asset quality remained stable. Credit costs were 5.5 million for the quarter and consisted of 6 million in net charges and a small reserve release of half a million dollars. Both NPLs and criticized loans showed declines and the ACL increased 1 basis point to 1.46% of total loans. Moving on to capital Our capital levels continue to grow and balance sheet strength is excellent evident with a TCE at 11.1% and CET1 over 12.5%. We exercised some of that capital flexibility this quarter and returned 40% of net income back to shareholders by repurchasing approximately 318,000 shares of stock at an average price of $30.84, in addition to our quarterly dividend …
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