Yahoo Finance Byline Bancorp Inc (BY) (Q1 2024) Earnings Call Transcript Highlights: Strong Performance with ...
Total Assets: Surpassed $9 billion.
Stockholders' Equity: Climbed above EUR1 billion.
Net Income: $30.4 million for the quarter.
Earnings Per Share (EPS): $0.7 per diluted share.
Revenue: $101 million, up 11% year-on-year.
Net Interest Income: $85.5 million.
Noninterest Income: $15.5 million, up 6.7% from last quarter.
Loans: Increased by $100 million or 6% annualized to $6.8 billion.
Deposits: Grew by $173 million or 9.7% annualized to $7.4 billion.
Return on Assets (ROA): 1.36%.
Return on Tangible Common Equity (ROTCE): 15.9%.
Pretax Pre-Provision Income: $47.2 million.
Net Interest Margin (NIM): Declined eight basis points to 4%.
Cost to Asset Ratio: 240 basis points, down 29 basis points year-on-year.
Credit Costs: $6.6 million, including net charge-offs of $6.2 million.
Non-Performing Loans (NPLs): Increased four basis points to 1%.
Capital Ratios: CET1 at 10.6%, Total Capital Ratio at 13.7%, TCE at 8.8%.
Release Date: April 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss the competition for deposits in Chicago and how it has evolved recently? A: Thomas Abraham - President of Byline's Small Business Capital, noted that competition has slightly decreased, allowing Byline Bancorp to gain market share. The bank is primarily focusing on rates in the US 5% range or lower, and renewal rates for CDs and other products are currently lower than a year ago.
Q: What trends are you observing in the lending market, and how are spreads on new underwriting? A: Alberto Paracchini - Executive Vice President and Head of Planning and Development of Midwest Bank, mentioned that competition remains consistent, especially in commercial banking. He observed that larger regional banks are adjusting due to risk-weighted asset considerations, but overall, the lending environment remains competitive with stable spreads.
Q: What is the outlook for net interest income, and how are funding costs affecting it? A: Thomas Abraham explained that the pace of increasing funding costs is slowing, which is beneficial. The bank continues to see benefits from legacy loan repricing and expects the cost of funds to continue moderating, supporting a net interest income outlook of $83 million to $85 million.
Q: Can you provide insights into the performance and trends within the industrial, warehouse, and multifamily segments of your CRE portfolio? A: Thomas Abraham indicated that there have been no significant issues in these segments. The bank is closely monitoring loans maturing in these areas, focusing on loan-to-value ratios, cash flows, and interest rates to support customers.
Q: Could you elaborate on the leverage trade executed this quarter and its expected impact? A: Thomas Abraham described a transaction where Byline Bancorp borrowed from the Fed's term facility and invested the funds, aiming for a positive carry to generate net interest income. This setup will last no longer than a year and is included in the guidance for Q2 net interest income.
Q: How is Byline Bancorp managing its SBA loan portfolio in light of recent market developments? A: Alberto Paracchini acknowledged the higher risk associated with the SBA portfolio and noted that the bank has been proactive in managing and monitoring this segment. The focus remains on structured oversight and addressing any emerging issues promptly to maintain portfolio health.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
