Regional banking company Byline Bancorp (NYSE: BY) reported Q4 CY2025 results topping the market’s revenue expectations, with sales up 11.8% year on year to $117 million. Its non-GAAP profit of $0.76 per share was 6% above analysts’ consensus estimates.

Is now the time to buy BY? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Byline Bancorp’s fourth quarter saw revenue and adjusted earnings per share surpass Wall Street expectations, but the market responded negatively, reflecting concerns over operating income and margin pressures. Management attributed the quarter’s growth to robust commercial loan activity, disciplined deposit pricing, and resilience in net interest income despite persistent macroeconomic and regulatory challenges. CEO Alberto Paracchini highlighted the successful integration of the First Security acquisition and progress on technology upgrades, while noting that deposit costs came down and asset quality remained stable. The company’s focus on organic growth, particularly in its core Chicago commercial business and new commercial payments segment, was central to its solid performance in the face of an evolving interest rate environment.

Looking forward, Byline Bancorp’s guidance is shaped by expectations for mid-single-digit loan growth, continued deposit discipline, and cautious asset sensitivity as interest rates potentially decline. Management emphasized that crossing the $10 billion asset threshold in 2026 remains a key milestone, with preparations underway for increased regulatory scrutiny. Paracchini stated, “We have good pipelines and remain well positioned to continue gaining share across all our commercial businesses,” while CFO Thomas Bell cautioned that net interest income may face seasonality and a lag in re-pricing as rates shift. The company aims to balance growth with prudent credit management, continued investment in technology, and incremental fee income from commercial payments and treasury services.

Key Insights from Management’s Remarks

Management credited the quarter’s performance to commercial loan growth, low-cost deposit management, and the launch of new business lines, while also highlighting proactive capital allocation and stable asset quality.

• Commercial loan growth momentum: The core driver of quarterly revenue was expansion in commercial and leasing portfolios, with origination activity up 22% over the prior quarter. Management signaled continued focus on scaling these verticals within the Chicago market, leveraging the bank’s position as the largest local commercial institution.

• Deposit cost discipline: Deposit costs declined by 19 basis points during the quarter, aided by granular pricing and a stable mix of noninterest-bearing deposits. CFO Thomas Bell noted improved analytics allowed for more precise deposit segmentation and pricing, supporting both net interest margin expansion and flexibility in a competitive market.

• Commercial payments business launch: Byline’s new commercial payments segment, launched in April, began onboarding clients such as payroll processors and expanded transaction volumes and fee income. Management is pursuing a deliberate, compliance-focused approach, targeting a handful of clients annually with an onboarding window of six to nine months to ensure risk controls.

• Capital deployment priorities: The company returned $42 million to shareholders in 2025 through dividends and share repurchases, and authorized a new buyback program covering up to 5% of shares. The board also approved a 20% dividend increase, emphasizing flexibility to support organic growth, M&A, and capital returns.

• Stable asset quality: Net charge-offs and criticized asset levels remained within historical ranges, with management maintaining a credit loss allowance of 1.45% of loans and guiding to continued vigilance on credit monitoring, especially as economic conditions evolve.

Drivers of Future Performance

Byline Bancorp’s outlook is anchored in organic commercial loan growth, sustained deposit pricing discipline, and balancing asset sensitivity as it prepares to cross the $10 billion asset threshold.

• Organic growth focus: Management expects mid-single-digit loan growth in 2026, primarily from commercial banking and leasing, supported by robust pipelines and a strong competitive position in Chicago. Real estate lending remains more muted, depending on transaction activity as interest rates shift.

• Margin and interest rate management: The company is targeting stable net interest income and margin, with plans to reduce asset sensitivity and maintain pricing discipline on deposits. Bell explained that deposit repricing benefits may be limited as rates fall, and a gradual catch-up period is expected if the Federal Reserve cuts rates further.

• Regulatory and capital readiness: Crossing the $10 billion asset mark in 2026 will bring increased regulatory requirements, and management has prioritized preparation for this milestone. Strategic flexibility in capital allocation—balancing organic growth, dividends, buybacks, and M&A—remains a central theme.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will closely monitor (1) the ramp-up and fee contribution from the commercial payments business, (2) the impact of deposit pricing strategies on net interest margin as rates fluctuate, and (3) progress toward and execution upon crossing the $10 billion asset threshold. Additionally, we will track developments in core loan growth and any changes to capital deployment as regulatory requirements evolve.

Byline Bancorp currently trades at $30.82, down from $31.71 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).

High Quality Stocks for All Market Conditions

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.