Byline Bancorp ((BY)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Byline Bancorp reflects a strong overall performance in 2024, underscoring the company’s robust profitability and solid capital position. Despite facing challenges such as flat loan and deposit growth, increased payoff activity, and rising operating expenses, Byline Bancorp managed to improve its net interest margin and increase its dividend, projecting a generally positive outlook.
Record Profitability for Full Year 2024
Byline Bancorp achieved record profitability in 2024, with a net income of $121 million, translating to $2.75 per diluted share. The company reported a 5% year-on-year revenue increase, reaching $407 million. Key profitability metrics included a pretax pre-provision ROA of 205 basis points, an ROA of 131 basis points, and a ROTCE just under 15%.
Strong Capital Position
The company’s strong capital position was highlighted by a 12% year-on-year increase in tangible book value per share. Tangible common equity (TCE) stood at 9.61%, Common Equity Tier 1 (CET1) was just under 12%, and total capital was approximately 15%, underscoring Byline Bancorp’s financial stability.
Dividend Increase
Byline Bancorp announced an 11.1% increase in its quarterly dividend, signaling confidence in its ongoing profitability and commitment to returning value to shareholders.
Net Interest Margin Improvement
The company reported an improvement in its net interest margin, which rose to 4.01%, an increase of 13 basis points from the previous quarter, reflecting effective asset and liability management.
Noninterest Income Growth
Noninterest income saw a significant boost, totaling $16.1 million, up 12.3% from the previous quarter. This growth was primarily driven by a remarkable 21% increase in gains from the sale of loans.
Flat Loan and Deposit Growth
Byline Bancorp experienced flat loan and deposit growth, with loans at $6.9 billion and deposits at $7.5 billion as of the quarter’s end, indicating stable but subdued growth in these areas.
Increased Payoff Activity
The company reported an increase in payoff activity, reaching $288 million, which was higher than anticipated and posed a challenge to maintaining loan balances.
Higher Operating Expenses
Operating expenses rose to $57.4 million, attributed to higher incentive accruals. This increase led to a higher efficiency ratio of 53.6%, highlighting an area for potential cost management improvement.
Moderate Asset Quality
Asset quality remained moderate with overall credit costs at $6.9 million, slightly lower than the previous quarter. Net charge-offs were recorded at $7.8 million, and the allowance ended the quarter at 1.42% of total loans.
Forward-Looking Guidance
Looking ahead, Byline Bancorp provided comprehensive guidance, emphasizing its solid year-end results with a net income of $121 million or $2.75 per diluted share. The company expects mid-single-digit loan growth in 2025, supported by disciplined expense management, projecting quarterly noninterest expenses between $55 million and $57 million. The outlook includes plans to maintain strong capital levels and improve operating leverage.
In conclusion, Byline Bancorp’s earnings call painted a picture of a company that is successfully navigating current economic challenges while maintaining a strong financial position. The positive sentiment from improved profitability, a strong capital base, and strategic growth plans underscores Byline Bancorp’s optimistic outlook for the future.
