Byline Bancorp (BY) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $30.3 million ($0.69 per diluted share), with adjusted net income of $30.7 million ($0.70 per share); revenue reached $102 million, up 2% year-over-year.

• Announced a definitive merger agreement to acquire First Security Bancorp, adding $355 million in assets, $201 million in loans, and $323 million in core deposits, expected to close in the first half of 2025.

• Tangible book value per share increased 24% year-over-year to $20.21; stockholders’ equity rose to $1.1 billion.

• Board declared a $0.09 per share dividend payable November 19, 2024.

• Recognized with multiple workplace awards, reflecting strong employee engagement and culture.

Financial highlights

• Net interest income was $87.5 million, up 1% sequentially; net interest margin was 3.88%, down 10 bps from Q2.

• Non-interest income increased 12% to $14.4 million, driven by higher swap income, loan sale gains, and wealth management growth.

• Non-interest expense was $54.3 million, up 2.1% from Q2, with an efficiency ratio of 52.02% and adjusted efficiency ratio of 51.62%.

• Provision for credit losses was $7.5 million, mainly due to government-guaranteed loan portfolio.

• Net charge-offs were $8.5 million (0.49% annualized), with allowance for credit losses at 1.44% of total loans.

Outlook and guidance

• Expect mid-single-digit loan growth for the remainder of 2024 and into 2025, supported by strong pipelines.

• Net interest income for Q4 projected at $85–$87 million, with stable to growing NII anticipated despite potential Fed rate cuts.

• Non-interest expense guidance for Q4 is $55–$57 million, and for 2025, $54–$57 million, both excluding the pending acquisition.

• Gain on sale income expected in the $5–$6 million range for Q4.

• Management expects the effective tax rate for 2024 to be approximately 25-27%.