Byline Bancorp (NYSE:BY) executives highlighted a “strong” finish to 2025 on the company’s fourth-quarter earnings call, pointing to higher profitability, solid net interest income performance, and additional capital returns to shareholders, including a 20% increase in the quarterly dividend.
Leadership highlights: dividend increase, “people-first banking,” and Chicago positioning
Chairman and CEO Roberto Herencia opened the call by emphasizing the board’s decision to raise the quarterly dividend by 20%, calling it a reflection of “strong financial performance” and confidence in the company’s ability to deliver “top quartile results” across key profitability metrics.
Full-year 2025 results: net income of $130.1 million, revenue up 9.7%
President Alberto Paracchini said Byline delivered strong fourth-quarter and full-year results despite an operating backdrop that “evolved differently” than management anticipated, citing elevated interest rates, increased macro uncertainty, and faster regulatory and policy changes.
For full-year 2025, management reported:
- Net income: $130.1 million, or $2.89 per diluted share
- Revenue: $446 million, up 9.7% year-over-year
- Pre-tax, pre-provision ROA: 219 basis points
- ROA: 136 basis points
- ROTC E: 13.5%
- Loan growth: 8.9% year-over-year
- Deposit growth: 2.5% year-over-year
- Tangible common equity (TCE): 11.3% at year-end
Paracchini also said the company returned $42 million to stockholders during the year and grew tangible book value per share by approximately 17%.
Strategically, he highlighted three milestones from 2025: closing and integrating the First Security transaction within a single quarter, upgrading customer-facing technology platforms, and continuing preparations to cross the $10 billion asset threshold in 2026.
Fourth-quarter performance: $34.5 million in net income, record NII
Byline posted fourth-quarter net income of $34.5 million, or $0.76 per diluted share, on revenue of $117 million. Paracchini reported pre-tax, pre-provision income of $56.6 million and said returns remained “solid,” with pre-tax, pre-provision ROA of 232 basis points, ROA of 141 basis points, and ROTCE of 13%.
Revenue rose 1.1% from the prior quarter and 12% year-over-year, which management attributed to higher net interest income. Loans grew 3% linked-quarter, while deposits declined to $7.65 billion, which Paracchini said was largely due to year-end balance sheet management.
Non-interest-bearing deposits were essentially flat at 24% of total deposits, and deposit costs declined by 19 basis points to below 2% for the quarter.
CFO Tom Bell said net interest income reached a record high of $101 million in Q4, up 1.4% sequentially, driven by loan growth, lower deposit rates, and lower interest expense tied to a subordinated debt payoff, partially offset by lower yields on loans and securities. Bell noted this was the third consecutive quarter of net interest income growth and represented a 10.7% increase for the full year.
The net interest margin expanded to 4.35%, up eight basis points from the prior quarter and up 25 basis points year-over-year, driven by a 29-basis-point decline in the cost of interest-bearing liabilities.
Balance sheet, credit, and capital: buybacks, new authorization, and $10B preparation
Bell said total deposits were down 2.3% from Q3 to $7.6 billion, reflecting a combination of steps “to stay below the $10 billion year-end” level and seasonal fourth-quarter outflows. He added that the company expects mid-single-digit loan growth in 2026 and described loan pipelines as “strong.”
On the credit side, Paracchini said asset quality remained stable, while quarterly credit costs totaled $9.7 million, driven by $6.7 million of net charge-offs and a $3 million reserve build. The allowance for credit losses ended the quarter at 1.45% of total loans, up three basis points from the prior quarter, while non-performing loans increased to 95 basis points. Bell added that non-performing assets as a percentage of total assets rose to 77 basis points from 69 basis points, noting the increase was partially driven by a lower year-end balance sheet.
Management discussed an ongoing focus on disciplined credit monitoring, with Paracchini emphasizing that the company aims to identify and address issues quickly. In Q&A, executives said there were no material changes in criticized or classified levels, describing credit as “ebbs and flows,” and reiterated guidance of roughly 30–40 basis points of net charge-offs (with management noting it could land toward the high or low end of that range).
Byline’s capital levels increased during the year. Bell reported CET1 of 12.33% at quarter-end, up 18 basis points sequentially and 63 basis points year-over-year. TCE to total assets was 11.29%, which he said was up 168 basis points from the prior quarter. The company repurchased about 346,000 shares in the quarter and announced a new authorization to repurchase up to 5% of outstanding shares. Paracchini said the company expects to cross the $10 billion asset threshold in 2026 and is monitoring the regulatory environment around asset thresholds, but is “not slowing down in anticipation of what might happen.”
2026 outlook: NII guidance, deposit pricing discipline, and fee growth initiatives
Looking to the first quarter, Bell said the company’s net interest income outlook is based on the forward curve, which assumes a 50-basis-point decline in the Fed funds rate in 2026. Under that framework, management guided to net interest income of $99–$100 million for Q1. Executives also said Q1 tends to be seasonally affected by fewer days and typically lower loan fees, and noted SBA loans reset on January 1 following fourth-quarter Fed cuts, contributing to a lower starting point for Q1.
Management also discussed efforts to reduce asset sensitivity over time, including adjustments to the mix of liabilities. Bell said the bank has flexibility to issue CDs and other interest-bearing accounts, but the goal is “stable and growing net interest income.”
In fee businesses, executives pointed to several categories they expect to grow, including swap and derivative-related income, the SBA gain-on-sale business (with a 2026 forecast of about $5.5 million per quarter on average, with lower Q1 expectations due to seasonality), wealth management (with the company nearing $1 billion in assets under management), and a newer commercial payments initiative.
Paracchini said the commercial payments business launched last April has onboarded six customers, added approximately $70 million in liability balances, and increased ACH volumes. He told analysts the onboarding process is deliberate—often six to nine months—given compliance requirements, and the strategy is not to add customers in bulk but to onboard “three or four” per year.
The call concluded with management reiterating priorities of organic growth, credit discipline, and continued capital flexibility through dividends, buybacks, and the ability to act on potential M&A opportunities.
About Byline Bancorp (NYSE:BY)
Byline Bancorp, Inc is the bank holding company for Byline Bank, a full-service commercial bank headquartered in Chicago, Illinois. Established under its current name in 2016, the company operates as a community-focused financial institution offering a broad array of banking products and services to corporate, professional and consumer clients.
On the commercial banking side, Byline Bancorp serves small and midsize businesses, real estate developers, professional services firms and nonprofit organizations.
