BYLINE BANCORP, INC. Q4 FY2024 earnings call

• Roberto Herencia: Highlighted 2024 as a strong year with top quartile performance, record profitability, and an 11.1% dividend increase. Mentioned Bob Yohanan's contribution.
• Alberto Paracchini: Outlined 2024 results including 3% loan growth funded by 4% deposit growth, cost-to-asset ratio decrease, and strong capital levels. Discussed fourth quarter results with strong net income, solid profitability, and improving credit quality.
• Thomas Bell: Talked about loan and lease portfolio, deposits, net interest income, noninterest income, noninterest expense, credit quality, cash and securities, capital ratios, and the First Security transaction on track to close early in Q2 2025.

Full Year 2024

• Net income was $121 million or $2.75 per diluted share on revenue of $407 million, up 5% year-on-year. Loan growth was 3% inclusive of managed runoff, deposits grew 4%. Cost-to-asset ratio decreased by 22 basis points to 238 basis points. Capital levels strong: TCE ended the year at 9.61%, CET1 at just under 12%, and total capital at roughly 15%.

Fourth Quarter 2024

• Net income was $30.3 million or $0.69 per diluted share on revenue of $105 million. Net interest income increased due to a 13 basis point margin increase and higher gain on sale income. Loans and deposits were flat at $6.9 billion and $7.5 billion respectively. Noninterest-bearing deposits made up 23.5% of total deposits, and deposit costs decreased by 28 basis points. Noninterest expense rose to $57.4 million. Credit quality improved with provision expense at $6.9 million, net charge-offs at $7.8 million, and NPLs to total loans at 90 basis points.

• First Security transaction expected to close early in Q2 2025.
• Net interest income outlook for 2025: Based on forward curve assuming 50 basis point Fed funds rate cut, net interest income range $86 million to $88 million for Q1.
• Noninterest expense expected to trend between $55 million and $57 million quarterly in 2025.
• Loan growth expected in mid-single-digits for 2025.

• Regulatory environment and M&A activity disruption.
• Impact of rate changes on net interest income and margin.
• Credit quality risks related to SBA portfolio and potential loan resolutions.

Q: Nathan Race asked about SBA delinquencies and credit quality, margin and NII outlook, repricing gap in CD portfolio.

A: Alberto and Thomas Bell discussed SBA portfolio monitoring, NII outlook flat to slightly up, and CD portfolio repricing.

Q: Brendan Nosal asked about asset quality loss content, balance sheet below $10B flex, and expense outlook.

A: Alberto and Thomas Bell discussed SBA portfolio loss content, balance sheet flex with excess cash, and expense guidance of $55 million to $57 million quarterly.

Q: Terry McEvoy asked about loan growth, payoffs, and expense outlook.

A: Alberto and Thomas Bell discussed loan growth from commercial banking and leasing, payoffs from Inland transaction, and expense guidance.

Q: Brian Martin asked about margin, capital opportunities, and fee income.

A: Thomas Bell and Alberto discussed margin, capital opportunities, and fee income from treasury management, wealth management, and derivatives.

Q: Damon DelMonte asked about fee income categories and provisioning.

A: Alberto discussed treasury management, wealth management, and provisioning outlook.

Q: Brendan Nosal followed up on expense guide including First Security.

A: Thomas Bell clarified expense guide is stand-alone, with First Security to be included later.