Byline Bancorp, Inc. Q1 FY2026 earnings call

• Discussed ongoing market distractions like shifting interest rates, economic signals, policy uncertainty, and geopolitical tensions. - Recognized Byland Bank as a U.S. best in class employer and named to Newsweek's America's Greatest Midsize Workplaces for Women. - SBA platform ranked number one SBA 7a lender in Illinois for 16th consecutive year. - Mentioned participation in upcoming conferences in Chicago. - Highlighted solid start to the year with strong profitability, disciplined expense management, stable credit quality.

Net income was 37.6 million and EPS was 83 cents per diluted share. ROA was 156 basis points and ROTCE was 13.77%. Pre-tax preparation income totaled 55.2 million with a pre-tax preparation margin of 229 basis points. Total revenues were $112.4 million. Net interest income was just under $100 million. Non-interest income was $12.5 million. Total deposits increased 8.2% annualized to $7.8 billion. Loan balances were modestly lower. Expenses were $57 million with an efficiency ratio of 49.8%. Credit costs were $5.5 million. Capital levels: CET1 at 12.5%, total capital at 15.5%, tangible book value per share grew to $23.79.

• Net interest income range of $99 to $101 million in the second quarter. - Non-interest income expected to be in the $14 to $15 million range for the second quarter. - Natural expense full year guidance unchanged at $58 to $60 million per quarter. - Expect full-year loan growth in the mid-single digits.

Q: Shed light on production levels in the quarter, year-over-year decline due to macro factors vs seasonality, and payoffs.

A: Origination level was good, payoff activity driven by recycle of loan participations and acquired loans, loan growth would have been ~4% if stripping out impact.

Q: Trajectory of loan yields over the balance of the year.

A: Roll-offs have certain coupon, new production has another, margin maintaining well with balance sheet growth and disciplined deposit pricing.

Q: M&A conversations and activity levels.

A: Underlying level of conversations healthy despite uncertainty causing some sellers to pause.

Q: Capital and buyback plan.

A: Over $2 billion buyback program with plenty of room to continue repurchasing.

Q: Deposit growth, CD growth, and competitive landscape.

A: CD book has short length, opportunity to reprice, focused on full relationship customers, CD yields coming down.

Q: Loan growth pipeline composition and segments.

A: All segments, real estate more rate sensitive, commercial banking and leasing business pipelines solid.

Q: Securities portfolio for remainder of the year.

A: Stable, will reinvest cash flows, depending on market opportunities.

Q: Deposit costs trajectory and second quarter outlook.

A: Average over the quarter unchanged, CD book short with most repriced.

Q: Balance sheet below $10 billion plan and Durbin impact.

A: Not managing below $10 billion artificially, Durbin impact expected to be 3.5 to 4 million bucks to ROA starting July 1, 2027.

Q: Deposit costs trajectory, competitive pressures, and commercial payments business.

A: Deposit costs relatively flat, mix helps, commercial payments business will have more benefit in second half.

Q: Fee income baseline and 2Q outlook.

A: Guidance of $14 to $15 million, lower swap fee income and one-off lower valuation on lease assets drivers.