Byline Bancorp (BY): Buy, Sell, or Hold Post Q1 Earnings?

Yahoo

26-06-2025

Over the past six months, Byline Bancorp's shares (currently trading at $25.74) have posted a disappointing 12.4% loss while the S&P 500 was flat. This may have investors wondering how to approach the situation.
Following the pullback, is this a buying opportunity for BY? Find out in our full research report, it's free.
Ranking as the fifth most active Small Business Administration lender in the country, Byline Bancorp (NYSE:BY) is a Chicago-based bank that provides banking services to small and medium-sized businesses, commercial real estate developers, and consumers.
While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.
Byline Bancorp's net interest income has grown at a 12.5% annualized rate over the last four years, better than the broader bank industry. Its growth was driven by an increase in its net interest margin, which represents how much a bank earns in relation to its outstanding loans, as its loan book shrank throughout that period.
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
Byline Bancorp's EPS grew at an astounding 15.4% compounded annual growth rate over the last five years, higher than its 8.5% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Topline growth alone doesn't tell the complete story - the profitability of that growth shapes actual earnings impact. Banks track this dynamic through efficiency ratios, which compare non-interest expenses such as personnel, rent, IT, and marketing costs to total revenue streams.
Markets understand that a bank's expense base depends on its revenue mix and what mostly drives share price performance is the change in this ratio, rather than its absolute value. It's somewhat counterintuitive, but a lower efficiency ratio is better.
For the next 12 months, Wall Street expects Byline Bancorp to become less profitable as it anticipates an efficiency ratio of 53.7% compared to 52.3% over the past year.
Byline Bancorp's positive characteristics outweigh the negatives. After the recent drawdown, the stock trades at 1× forward P/B (or $25.74 per share). Is now a good time to buy? See for yourself in our in-depth research report, it's free.
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