Breaking Down Byline Bancorp, Inc. (BY) Financial Health: Key Insights for Investors

You're looking at Byline Bancorp, Inc. (BY) right now, wondering if this regional bank's strong run can continue, and honestly, the third quarter of 2025 financials give us a lot to work with. The bank defintely beat the street, posting diluted earnings per share (EPS) of $0.82, which crushed the analyst consensus forecast of $0.72 by nearly 14%, plus net income hit a robust $37.2 million for the quarter. This performance is built on a solid Net Interest Margin (NIM) of 4.27% and an improved efficiency ratio of 51.00%, which tells you they're managing their costs well while expanding their core lending business. Still, with total assets now at $9.8 billion, we need to map out the near-term risks as they approach the $10 billion regulatory threshold, which often brings higher compliance costs, but also look at how their $7.5 billion loan portfolio is positioned for further growth. The question isn't just how they did it, but whether the strategy that drove a 15.11% return on average tangible common equity (ROTCE) is sustainable against a changing rate environment and increased regulatory scrutiny.

Revenue Analysis

You need to know where Byline Bancorp, Inc. (BY) is making its money to understand its risk profile, and the answer is clear: the core business is strong, delivering a record total revenue of approximately $115.7 million in the third quarter of 2025. This performance is a solid 13.6% increase over the same quarter last year, a defintely healthy sign in the regional banking space.

The revenue structure of Byline Bancorp, Inc., like most commercial banks, is split between two primary engines: Net Interest Income (NII) and Non-interest Income. NII, which is the money earned from loans minus the interest paid on deposits, is the dominant driver. For Q3 2025, NII hit $99.9 million, which accounts for about 86.3% of the total revenue. The other 13.7% comes from non-interest activities, like fees and loan sales.

Here's the quick math on the trailing twelve months (TTM) revenue ending September 30, 2025: it stood at $400.66 million, reflecting a year-over-year growth of 7.23%. That's a consistent upward trajectory, mostly fueled by a growing loan portfolio and effective management of deposit costs. The bank is successfully widening its Net Interest Margin (NIM), which expanded to 4.27% in Q3 2025.

The biggest change in the near-term revenue mix is the strong performance in fee-based income. Non-interest income grew 9.5% quarter-over-quarter to $15.9 million in Q3 2025. This isn't just a random bump; it's primarily driven by higher net gains on sales of loans, a key part of their strategy to manage risk and liquidity. Specifically, net gains on loan sales were about $7.0 million in Q3 2025, a 28.9% surge from the prior quarter.

To understand the NII engine, you have to look at the loan portfolio's composition. It's heavily weighted toward commercial relationships, which is the Chicago-based bank's core focus. This diversification is a strength, mitigating concentration risk. Exploring Byline Bancorp, Inc. (BY) Investor Profile: Who's Buying and Why?

The breakdown of the loan portfolio driving that NII is highly concentrated in commercial lending, showing their focus on the business client. The loan portfolio grew to $7.5 billion in Q3 2025.

• Commercial and Industrial (C&I) loans: 40% of the portfolio.
• Owner-occupied Commercial Real Estate: 20% of the portfolio.
• Non-owner occupied Commercial Real Estate: 14% of the portfolio.

The table below summarizes the core revenue components for the most recent quarter, showing clearly where the money is coming from.

Profitability Metrics

You want to know if Byline Bancorp, Inc. (BY) is making money efficiently, and honestly, the Q3 2025 numbers show a solid, improving picture. The direct takeaway is that their operational efficiency is significantly better than the industry average, which is a major green flag for a regional bank right now.

For a bank, profitability starts with Net Interest Income (NII)-the difference between what they earn on loans and what they pay on deposits. We don't use 'Gross Profit' in the manufacturing sense, but we can look at Total Revenue (NII plus non-interest income) as the top line. For the third quarter of 2025, Byline Bancorp, Inc.'s Total Revenue was $115.7 million, driven by a NII of $99.9 million and non-interest income of $15.9 million.

Here's the quick math on their key margins for Q3 2025, using Total Revenue as the base for consistency:

• Operating Profit Margin: The bank's pre-tax pre-provision net revenue (PPNR), which acts as our operating profit, was about $55.2 million ($115.7 million Total Revenue minus $60.5 million Non-Interest Expense). This translates to a strong Operating Profit Margin of roughly 47.7%.
• Net Profit Margin: Net Income for Q3 2025 was $37.2 million, yielding a Net Profit Margin of approximately 32.15% on the $115.7 million in Total Revenue.

Their profitability trends are defintely positive. Year-to-date (YTD) Net Income through Q3 2025 is $95.5 million, up from $90.4 million YTD 2024. The Net Interest Margin (NIM)-a crucial measure of core lending profitability-expanded to 4.27% in Q3 2025, a nine basis-point increase from the prior quarter, which tells you they are managing their funding costs better than their loan yields.

Operational Efficiency and Industry Comparison

The real story here is operational efficiency, measured by the Efficiency Ratio (non-interest expense as a percentage of total revenue). This ratio shows how much it costs to generate one dollar of revenue. You want this number low. Byline Bancorp, Inc. is doing well here.

Their reported Efficiency Ratio for Q3 2025 was 51.00%, or an adjusted 50.27%. To be fair, that's a significant improvement from the 52.61% they posted in Q2 2025.

When you compare this to the broader industry, Byline Bancorp, Inc. stands out. The aggregate efficiency ratio for all FDIC-insured institutions in Q1 2025 was 56.2%. Their lower ratio means they are more efficient at turning revenue into profit than the average bank. This is a direct result of solid cost management, even with YTD non-interest expense rising to $176.5 million due to factors like higher salaries and data processing costs.

Look at the Return on Average Assets (ROAA)-how much profit a bank generates for every dollar of assets. Byline Bancorp, Inc.'s annualized Q3 2025 ROAA was 1.52%. The aggregate ROAA for the entire banking industry in Q1 2025 was just 1.16%. That 36 basis-point difference shows their superior asset utilization. They are simply making their assets work harder.

The consistent profitability and operational outperformance are key reasons why the stock saw a 52% rally in 2025. You can dive deeper into the strategic implications of these numbers by reading the full post at Breaking Down Byline Bancorp, Inc. (BY) Financial Health: Key Insights for Investors.

Next step: you should monitor the Q4 2025 non-interest expense to ensure the YTD increase doesn't accelerate, which would pressure that excellent efficiency ratio. Finance: track the adjusted efficiency ratio against the 50.27% target in the next earnings release.

Debt vs. Equity Structure

When you look at a bank like Byline Bancorp, Inc. (BY), the core question is how they fund their operations-are they relying too much on borrowed money (debt) or are they leaning on shareholder capital (equity)? The short answer is that Byline Bancorp, Inc. maintains a healthy, conservative balance, especially for a financial institution, which is a great sign for stability.

For the third quarter of 2025, Byline Bancorp, Inc.'s total stockholders' equity stood strong at approximately $1.24 billion, up from $1.19 billion the prior quarter, primarily due to retained earnings from net income. The bank's total liabilities-which includes deposits and all forms of debt, like borrowings and notes-was $8.57 billion as of September 30, 2025. That's a lot of money, but for a bank, the majority of liabilities are customer deposits, not traditional corporate debt.

The best single metric here is the Debt-to-Equity (D/E) ratio, which tells you how much debt a company uses to finance its assets relative to the value of its shareholders' equity. For Byline Bancorp, Inc., the D/E ratio is approximately 0.49 as of November 2025. Here's the quick math: for every dollar of shareholder equity, the company has 49 cents of debt (excluding deposits from the debt calculation, which is common for financial analysis of banks). That's a very manageable level.

• A D/E ratio of 0.49 is better than the regional bank industry average, which typically sits around 0.50 to 0.58.
• This lower ratio means less financial leverage (borrowing to boost returns), which translates to lower risk for you as an investor.
• The bank's Common Equity Tier 1 (CET1) capital ratio, a key regulatory measure of a bank's ability to withstand financial stress, was also robust at 12.15% in Q3 2025, well above minimum requirements.

The bank is defintely actively managing its debt structure to keep costs low. In August 2025, Byline Bancorp, Inc. completed a private placement of $75.0 million in new 6.875% Fixed-to-Floating Rate Subordinated Notes due 2035. They used the proceeds to redeem an equal amount of older, lower-rate subordinated notes due in 2030, a strategic move to optimize their long-term funding mix. This refinancing activity was made possible, in part, by a credit rating upgrade in March 2025, where Kroll Bond Rating Agency, LLC (KBRA) upgraded the company's senior unsecured debt to BBB+ from BBB. That upgrade signals a strong financial outlook and lower borrowing costs, which is a direct benefit to the bottom line.

The balance is clear: Byline Bancorp, Inc. uses a moderate amount of long-term debt, like subordinated notes, to diversify its funding and support growth, but it maintains a high level of capital and equity to act as a buffer against losses. This approach aligns with their Mission Statement, Vision, & Core Values of Byline Bancorp, Inc. (BY). to be a sound, relationship-focused commercial bank. The table below breaks down the primary components of their non-deposit liabilities and equity for a clearer picture.

Next Step: Review the bank's loan loss reserves against its non-performing assets to check the quality of the assets being financed by this capital structure. Owner: Portfolio Manager.

Liquidity and Solvency

You're looking for a clear picture of Byline Bancorp, Inc.'s (BY) financial flexibility, and the answer is that their liquidity position is strong, though you have to look past the traditional industrial-company ratios to see it. For a bank, liquidity isn't just cash in the vault; it's about stable funding and immediate access to capital. Byline Bancorp, Inc. has substantial, ready-to-use liquidity lines that anchor its financial health.

The latest data from the third quarter of 2025 shows the company's total assets at $9.8 billion and total deposits at $7.8 billion. While a standard Current Ratio (Current Assets/Current Liabilities) is less meaningful for a bank, we can look at a proxy. Using the most liquid assets-Cash and Cash Equivalents of $259 million-against total borrowings and other liabilities of $746.5 million, the resulting ratio is approximately 0.35x. This low number is normal for a bank, where the main liabilities are deposits (which fund long-term loans) and are not considered 'current' in the typical sense.

Here's the quick math on their immediate position:

• Quick Ratio Proxy (Cash/Borrowings): 0.35x (Cash and Equivalents of $259 million over Total Borrowings of $746.5 million)
• Core Liquidity Strength: The company has access to more than $3.9 billion in additional liquidity through Federal Home Loan Bank (FHLB) and Federal Reserve borrowing lines.

Working Capital and Funding Trends

The analysis of working capital (Current Assets minus Current Liabilities) in a bank context shifts to deposit stability and growth. Byline Bancorp, Inc. saw total deposits increase to $7.8 billion as of September 30, 2025. Critically, non-interest-bearing demand deposits-the cheapest and most stable form of funding-increased by $159.6 million in the third quarter of 2025. That's a defintely positive trend, showing an improving deposit mix that drives down the overall cost of funding.

The company also reduced its reliance on more expensive, less sticky funding sources, with brokered deposits falling to just $56 million as of September 30, 2025, down significantly from $365 million at the end of 2024. This shift signals a healthier, more organic funding base, which is a key strength for a bank's long-term solvency.

Cash Flow Statement Overview (Q3 2025)

The cash flow movements in the third quarter of 2025 reflect a bank actively growing its core business while managing its capital structure. The net increase in Cash and Cash Equivalents for the quarter was $40.7 million.

The Investing Cash Flow outflow is expected, as a bank's primary investment is making loans. The $114.7 million increase in net loans and leases shows strong commercial and industrial loan growth, which is the engine of their business. The Financing activities show active capital management, including the issuance of $75.0 million in subordinated debt to bolster the capital base, which is a sign of proactive solvency management.

To dig deeper into the credit quality underlying these numbers, read our full analysis: Breaking Down Byline Bancorp, Inc. (BY) Financial Health: Key Insights for Investors.

Valuation Analysis

You need to know if you are paying a fair price for Byline Bancorp, Inc. (BY) right now, and the numbers suggest it's trading at a reasonable, though not deeply discounted, level for a regional bank. The key is that the company's valuation multiples, like Price-to-Book, are barely above tangible book value, which is a good starting point for a bank stock.

Here's the quick math: As of November 2025, the stock trades around $27.52, and its core valuation ratios are generally favorable against the broader banking sector. This is defintely a stock you should look at through the lens of capital strength, not just earnings growth.

The Price-to-Earnings (P/E) ratio for Byline Bancorp, Inc. stands at a current 9.85. For a bank, the Price-to-Book (P/B) ratio is often more telling, as it measures the stock price against the bank's net asset value. Byline Bancorp, Inc.'s P/B is currently sitting at 1.02. This means you are paying nearly dollar-for-dollar for the company's book value, which is a solid metric for a well-capitalized institution.

We typically skip Enterprise Value-to-EBITDA (EV/EBITDA) for banks because their capital structure, which includes deposits and loans, makes the EBITDA metric less meaningful for valuation than net interest income and book value. The P/B ratio is your best indicator here.

Looking at the past year, the stock has been a bit volatile. The 52-week range has spanned from a low of $22.63 to a high of $32.89. Over the last 12 months, the stock has delivered a negative return of approximately -12.33%, which suggests a period of consolidation or market caution, even as the company reported record financial results in the third quarter of 2025. This tells me the market is still mapping out the near-term interest rate environment.

For income-focused investors, Byline Bancorp, Inc. offers a modest but consistent dividend. The forward dividend yield is around 1.45%. What's important is the sustainability of that dividend, and the payout ratio-the percentage of earnings paid out as dividends-is a comfortable 14.28%. This low payout ratio gives the bank plenty of room to reinvest in growth, absorb potential loan losses, or even increase the dividend down the line. You can dive deeper into who is buying and why by Exploring Byline Bancorp, Inc. (BY) Investor Profile: Who's Buying and Why?

The Wall Street consensus is cautious but sees upside. As of early November 2025, the stock carries a consensus rating of Hold from the analysts covering the company. Specifically, 67% of analysts suggest a Hold, while 33% recommend a Buy. The average price target is set at $33.67, which implies a significant potential upside from the current trading price. This gap between the 'Hold' rating and the high price target suggests analysts see the value but are waiting for clearer macroeconomic signals before upgrading their recommendation.

• P/E Ratio: 9.85 (Current)
• P/B Ratio: 1.02 (Current)
• Dividend Yield: 1.45% (Forward)
• Payout Ratio: 14.28% (Current)

Risk Factors

You're looking for the real cracks in the foundation, not just the glossy Q3 2025 numbers. Byline Bancorp, Inc. (BY) has a strong capital base, but like any bank, it faces clear, near-term risks tied to interest rates, regulatory changes, and its core lending book. The biggest financial risk right now is the potential hit to its equity value if rates move sharply, even if net interest income benefits.

Here's the quick math: as of September 30, 2025, Byline Bancorp, Inc. is what we call asset-sensitive. That means a sudden, steep rise in interest rates-a +300 basis points (bps) shock-would boost its net interest income by an estimated 11.2% over the next twelve months. But, and this is the crucial caveat, that same shock would cause the bank's Economic Value of Equity (EVE) to decline by 11.8%. That's a significant mark-to-market risk you defintely need to watch.

Operational and Financial Exposures

The operational and financial risks are tightly linked to market conditions and the bank's primary lending strategy. Credit quality is holding up well, but the concentration in Commercial Real Estate (CRE) is always a concern in a high-rate environment.

• Commercial Real Estate Concentration: CRE loans make up about 33.9% of the total loan portfolio, approximately $2.52 billion as of Q3 2025. While management states the portfolio is diversified, a downturn in the Chicago-area commercial property market would hit hard.
• Credit Loss Buffers: To be fair, the Allowance for Credit Losses (ACL) coverage is strong, sitting at 167% of non-performing loans in Q3 2025. Net charge-offs are also trending down, decreasing to $7.1 million (or 0.38% annualized) in Q3 2025 from $7.7 million in the prior quarter.
• Non-Interest Expense Creep: Non-interest expense for Q3 2025 was $60.5 million, a slight increase from the previous quarter. The bank is investing in digital to drive efficiency-the Q3 efficiency ratio improved to a strong 51.00%-but technology and personnel costs are constant pressures.

The bank's total assets are currently at $9.8 billion as of September 30, 2025. This is important because crossing the $10 billion asset threshold will trigger the Durbin Amendment and other regulatory requirements, significantly increasing compliance costs and complexity.

External and Strategic Headwinds

External risks are largely macroeconomic and political, which are tough for any regional bank to mitigate directly. The strategic risk revolves around growth and regulatory compliance.

The political and economic uncertainty going into 2026 is a real external headwind. The bank's own market outlook points to policy risks-changes in tax, trade, and immigration-that could slow the economy and impact the small and mid-sized businesses that form their core customer base. Plus, the regulatory environment is only getting tougher; the bank already budgets about $4.5 million per year just for new regulatory costs tied to its growth trajectory. Strong capital is the only real defense here. Their CET1 ratio is robust at 12.15% as of September 30, 2025.

Management's strategy is to remain open to disciplined mergers and acquisitions (M&A), but M&A is inherently risky. Integration failures can quickly erode shareholder value. The good news is they have the capital flexibility to be opportunistic without being forced into a deal. If you want to see how this strategy fits into the big picture, you can review the Mission Statement, Vision, & Core Values of Byline Bancorp, Inc. (BY).

Here's a snapshot of the key financial risks and their current status:

The core action for you, the investor, is to track the CRE delinquency rate over the next two quarters and monitor any official guidance on the projected cost increase once they cross the $10 billion asset mark.

Growth Opportunities

You're looking for a clear path forward on Byline Bancorp, Inc. (BY), and the data from 2025 is defintely pointing to a strong, deliberate growth strategy. The core takeaway is that Byline Bancorp is prioritizing high-margin commercial lending and operational efficiency, which translated into a Q3 2025 diluted earnings per share (EPS) of $0.82, beating analyst forecasts by 13.89%.

The company isn't chasing reckless expansion; they are doubling down on their strengths in the Chicago and Milwaukee metropolitan areas, plus they're leveraging their status as a top U.S. Small Business Administration (SBA) lender. This focus on commercial banking relationships is a resilient business model, especially when paired with a strong efficiency ratio of 51.00% in Q3 2025. That's a powerful combination in a regional banking environment.

Key Growth Drivers and Strategic Execution

Byline Bancorp's growth isn't abstract; it's driven by three concrete areas: strategic acquisitions, targeted product focus, and digital investment. The successful integration of First Security Bancorp, which closed in April 2025, has already bolstered their financial position and contributed to a net interest income of $99.9 million in Q3 2025.

The bank's strategic goal is to cross the significant $10 billion total asset threshold, which stood at approximately $9.8 billion in Q3 2025. Hitting this mark will change their regulatory profile, but management is doing it in a measured, strategic manner. Here's the quick math: their loan portfolio grew to $7.5 billion in Q3 2025, a 5.8% year-over-year increase, so the organic engine is running hot.

• Acquisition Integration: Completed First Security Bancorp, boosting deposits.
• Digital Upgrades: Finished a major online banking systems update.
• Commercial Focus: Loan originations of $264.5 million in Q3 2025, driven by commercial teams.
• Brand Building: Sponsorship of the Chicago Blackhawks for the 2025-26 season, connecting with local business owners.

Earnings and Revenue Outlook

Analysts are bullish, and for good reason. The bank has delivered 12 consecutive quarters with a pre-tax pre-provision return on average assets (PTPP ROAA) above 2.00%, hitting 2.25% in Q3 2025. This consistency is what separates a good bank from a great one. What this estimate hides is the impact of their expanding Net Interest Margin (NIM), which reached 4.27% in Q3 2025, up 9 basis points from the prior quarter.

For the full year, the street has been revising EPS estimates upward-six positive revisions in the three months leading up to September 2025. Management has guided for mid-single-digit loan growth for 2025, which is a clear, actionable target for investors to monitor. Plus, the stock is trading at a price-to-earnings ratio of 10, below the broader bank sector average, suggesting there's still value to be unlocked.

The capital allocation plan is also clear: fund growth first, then opportunistic M&A, then a stable dividend, and finally, share buybacks, like the 543,599 common shares repurchased in Q2 2025. This disciplined approach helps maximize shareholder value. You can read more about their core philosophy here: Mission Statement, Vision, & Core Values of Byline Bancorp, Inc. (BY).

Next step: Finance: Track Q4 2025 loan growth against the mid-single-digit guidance to confirm execution.