Byline Bancorp ((BY)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Byline Bancorp’s recent earnings call conveyed a generally positive sentiment, highlighting robust financial performance characterized by significant loan and deposit growth, successful acquisition integration, and record net interest income. Despite facing challenges such as increased credit costs and a decline in noninterest income, the company’s achievements were deemed to outweigh these concerns.
Successful First Security Acquisition
The acquisition of First Security was a notable highlight, adding approximately $280 million in deposits and $153 million in loans. The integration process was completed by the end of April, marking a strategic move that bolstered Byline Bancorp’s financial standing.
Strong Financial Performance
Byline Bancorp reported a net income of $30 million, or $0.66 per diluted share, on revenue of $110 million. When adjusted, net income was $33.8 million, or $0.75 per diluted share, showcasing the company’s strong financial health.
Revenue and Margin Growth
The company experienced significant revenue growth, with total revenue reaching $110.5 million, an increase of $7.4 million for the quarter and 11% year-on-year. The net interest margin also expanded by 11 basis points to 4.18%.
Record High Net Interest Income
Byline Bancorp achieved a record high net interest income of $96 million in Q2, reflecting a 9% increase from the previous quarter, underscoring the company’s effective financial strategies.
Loan and Deposit Growth
The company reported substantial growth in loans and deposits, with loans increasing by $155 million or 9% and deposits, excluding brokered, growing by 6.4% quarter-on-quarter.
Capital and Shareholder Returns
Byline Bancorp repurchased approximately 544,000 shares, returning $10 million to shareholders, and maintained strong capital levels with a CET1 ratio of 11.85%, demonstrating a commitment to shareholder value.
Higher Credit Costs
The company faced increased credit costs, which came in at $11.9 million, with net charge-offs at $7.7 million, marking a rise from the previous quarter.
Noninterest Income Decline
Noninterest income saw a marginal decline due to a $2.1 million negative fair value mark on the servicing asset, indicating some areas of financial pressure.
Increase in Non-Performing Loans
Non-performing loans increased by 16 basis points from the previous quarter, driven by lower resolution activity towards the end of the quarter, highlighting a potential area of concern.
Forward-Looking Guidance
Looking ahead, Byline Bancorp provided guidance that reflects its strong financial performance and strategic execution. The company anticipates continued growth in loans and deposits, with loans reaching $7.4 billion and deposits $7.8 billion. The successful integration of First Security is expected to further enhance financial metrics, and capital levels are projected to remain robust.
In summary, Byline Bancorp’s earnings call painted a picture of a company in strong financial health, with significant achievements in loan and deposit growth and strategic acquisitions. While challenges such as increased credit costs and noninterest income decline were noted, the overall sentiment was positive, with forward-looking guidance suggesting continued growth and stability.