Byline Bancorp, Inc. Reports Third Quarter 2026 Financial Results
BYLINE BANCORP, INC. (BY) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Byline Bancorp, Inc. Reports Third Quarter 2026 Financial Results Net income of $41.8 million, $0.94 diluted earnings per share Chicago, IL, October 22, 2026 – Byline Bancorp, Inc. (NYSE: BY), today reported: At or for the quarter Third Quarter Highlights (compared t
How this was made
The 30-second read
Why it matters
Record earnings, dividend increase, and a strategic acquisition signal a positive outlook, but higher deposit costs and integration risk temper enthusiasm.
Market read
The earnings beat and dividend hike provide a short‑term bullish catalyst for BY stock, with broader implications for regional banks.
What to watch
The acquisition of Illinois State Bancorp adds integration risk and may dilute near‑term earnings.
Byline Bancorp reports record total revenue of $121.0 million and net income of $41.8 million, or $0.94 diluted earnings per share, for the third quarter of 2026.
Record revenue, net interest income, higher quarterly net income and expanded net interest margin were offset by higher expenses, a declining loan portfolio, and increased non-performing assets and net charge-offs.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenuenon-GAAP | $121.0M | 2.8% | 4.6% Y/Y |
| Net interest incomeGAAP | $103.7M | 2.8% | – |
| Net interest income, fully taxable equivalentnon-GAAP | $103.8M | – | – |
| Total interest and dividend incomeGAAP | $147.6M | – | – |
| Total interest expenseGAAP | $43.92M | – | – |
| Non-interest incomeGAAP | $17.33M | 2.7% | – |
| Net gains on sales of loansGAAP | $5.80M | (4.8)% | – |
| Loan servicing revenueGAAP | $3.06M | – | – |
| Fees and service charges on depositsGAAP | $2.92M | – | – |
| Loan servicing asset revaluationGAAP | −$1.79M | – | – |
| ATM and interchange feesGAAP | $1.29M | – | – |
| Wealth management and trust incomeGAAP | $1.39M | – | – |
| Other non-interest incomeGAAP | $4.43M | – | – |
| Non-interest expenseGAAP | $59.8M | 5.9% | – |
| Salaries and employee benefitsGAAP | $39.07M | – | – |
| Legal, audit, and other professional feesGAAP | $3.58M | – | – |
| Data processingGAAP | $4.77M | – | – |
| Other non-interest expenseGAAP | $6.35M | – | – |
| Pre-tax pre-provision net incomenon-GAAP | $61.21M | – | – |
| Income before provision for income taxesGAAP | $54.46M | – | – |
| Provision for credit lossesGAAP | $6.75M | (5.8)% | – |
| Provision for income taxesGAAP | $12.67M | – | – |
| Effective tax rateGAAP | 23.3% | – | – |
| Net incomeGAAP | $41.79M | – | – |
| Adjusted net incomenon-GAAP | $41.79M | – | – |
| Diluted earnings per common shareGAAP | $0.94 | 4.4% | 14.6% Y/Y |
| Basic earnings per common shareGAAP | $0.94 | – | – |
| Adjusted diluted earnings per common sharenon-GAAP | $0.94 | – | – |
| Net interest marginGAAP | 4.33% | five basis points | – |
| Average cost of depositsother | 1.95% | three basis points | – |
| Efficiency rationon-GAAP | 48.40% | 147 basis points | – |
| Return on average assetsGAAP | 1.67% | – | – |
| Return on average stockholders' equityGAAP | 12.34% | – | – |
| Return on average tangible common stockholders' equitynon-GAAP | 14.78% | – | – |
| Pre-tax pre-provision return on average assetsnon-GAAP | 2.45% | – | – |
| Total assetsGAAP | $9.90B | (0.3)% | – |
| Cash and cash equivalentsGAAP | $218.7M | – | – |
| Total loans and leasesGAAP | $7.46B | – | – |
| Total depositsGAAP | $8.04B | 2.1%, or 8.5% annualized | 2.7% |
| Other borrowingsGAAP | $272.6M | – | – |
| Total stockholders' equityGAAP | $1.28B | (2.2)% | – |
| Allowance for credit losses - loans and leasesGAAP | $113.0M | 1.1% | – |
| ACL to total loans and leases held for investment, net before ACLother | 1.51% | three basis points | – |
| Net charge-offs - loans and leasesGAAP | $5.85M | $1.4 million or seven basis points | – |
| Net charge-offs to average total loans and leases held for investment, net before ACL - loans and leasesother | 0.31% | seven basis points | – |
| Total non-performing assetsother | $87.86M | 21.6% | 30.4% |
| Total non-performing assets as a percentage of total assetsother | 0.89% | – | – |
| Common equity tier 1 capital ratioother | 13.29% | – | – |
| Tangible book value per common sharenon-GAAP | $24.14 | (1.4)% | 6.9% Y/Y |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- Repurchased 521,980 shares of common stock during the quarter ended September 30, 2026.
- Returned more than $20 million of capital to stockholders through share repurchases and a 16.7% increase in the common dividend to $0.14 per share during the third quarter.
- Cash dividend of $0.14 per share was declared on October 6, 2026, payable November 17, 2026 to stockholders of record as of November 3, 2026.
- Cash dividends per common share were $0.14, compared to $0.12 in the second quarter of 2026 and $0.10 in the third quarter of 2025.
- Total payout ratio was 63.2%.
What drove it
- Net interest income increased primarily from higher interest income on investment securities, lower interest expense on other borrowings from reduced wholesale funding, and the additional day in the quarter, partly offset by higher interest expense on deposits.
- Net interest margin expansion reflected higher yields on investment securities and lower Federal Home Loan Bank advances, partly offset by higher deposit rates.
- Non-interest income growth was driven by higher bank-owned life insurance income, customer swap activity, and wealth management and trust income.
- Deposit growth was driven by non-interest-bearing demand deposits, interest-bearing accounts, and time deposits, partly offset by lower money market and savings account balances.
- The lower effective tax rate reflected the purchase of renewable energy tax credits.
Concerns
- Non-interest expense increased $3.3 million, or 5.9%, from the second quarter, mainly from a $3.4 million increase in salaries and employee benefits, higher other non-interest expense, and higher legal, audit and other professional fees.
- Loans and leases held for investment declined by $80.9 million as loan payoffs and sales exceeded portfolio growth.
- Total non-performing assets increased $15.6 million, or 21.6%, from June 30, 2026, primarily due to higher non-accrual loans and leases.
- Net charge-offs increased $1.4 million or seven basis points from the second quarter of 2026.
- Total stockholders' equity declined $29.0 million, or 2.2%, due to higher accumulated other comprehensive loss related to available-for-sale securities, common share repurchases, and dividends declared.
What to watch
- Whether deposit growth and the reduction in wholesale funding continue while the average cost of deposits rises.
- Loan and lease portfolio growth following the third-quarter decline in held-for-investment balances.
- The trajectory of non-accrual loans, non-performing assets, net charge-offs, and individually assessed loan reserves.
- Whether expense growth and the 48.40% efficiency ratio moderate after the third quarter.
- Progress on the announced acquisition of Illinois State Bancorp, Inc., parent of First Nations Bank and The Bank of Bourbonnais.
Balance sheet and cash flow
- Cash and cash equivalents were $218,675 (dollars in thousands) as of September 30, 2026, compared with $193,559 (dollars in thousands) as of June 30, 2026.
- Total assets were $9,898,780 (dollars in thousands) as of September 30, 2026, compared with $9,932,465 (dollars in thousands) as of June 30, 2026.
- Total deposits were $8,039,110 (dollars in thousands), up $168.3 million from June 30, 2026.
- Loans and leases were $7,461,517 (dollars in thousands), compared with $7,542,411 (dollars in thousands) as of June 30, 2026.
- Total borrowings and other liabilities were $584.4 million, compared with $757.5 million at June 30, 2026.
- Other borrowings were $272,629 (dollars in thousands), compared with $460,449 (dollars in thousands) at June 30, 2026.
- Total stockholders' equity was $1,275,242 (dollars in thousands), compared with $1,304,215 (dollars in thousands) at June 30, 2026.
Analysis
Byline reported record total revenue of $121,008 (dollars in thousands), up 2.8% from the second quarter and 4.6% Y/Y, supported by record net interest income of $103,676 (dollars in thousands). Net interest margin improved five basis points sequentially to 4.33%, even as the average cost of deposits increased three basis points to 1.95%. Management attributed the margin improvement to higher investment-security yields and lower Federal Home Loan Bank advances, while net loan accretion contributed six basis points to margin, compared with 11 basis points in the prior quarter.
Net income was $41,786 (dollars in thousands), compared with $40,181 (dollars in thousands) in the second quarter and $37,200 (dollars in thousands) a year earlier. Diluted EPS was $0.94, up 4.4% sequentially and 14.6% Y/Y. The lower effective tax rate of 23.3%, versus 25.7% in the second quarter, reflected renewable energy tax credits and supported earnings. Pre-tax pre-provision net income was broadly stable sequentially at $61,208 (dollars in thousands), compared with $61,233 (dollars in thousands), while ROAA rose to 1.67% from 1.63%.
The quarter's expense and credit indicators warrant attention. Non-interest expense rose 5.9% sequentially to $59,800 (dollars in thousands), led by salaries and employee benefits, and the efficiency ratio increased to 48.40% from 46.93%. Although provision for credit losses declined to $6,748 (dollars in thousands), net charge-offs increased to $5,846 (dollars in thousands), or 0.31% of average loans and leases on an annualized basis. Total non-performing assets rose 21.6% sequentially to $87,858 (dollars in thousands), and non-performing assets represented 0.89% of total assets.
Balance-sheet management centered on deposit gathering and wholesale-funding reduction. Deposits increased $168.3 million to $8,039,110 (dollars in thousands), while other borrowings declined to $272,629 (dollars in thousands) from $460,449 (dollars in thousands). However, total loans and leases declined to $7,461,517 (dollars in thousands) as payoffs and sales exceeded portfolio growth. The company repurchased 521,980 common shares and declared a $0.14 per-share cash dividend. Total stockholders' equity declined to $1,275,242 (dollars in thousands), while the common equity tier 1 capital ratio increased to 13.29%.
No forward financial guidance was provided. Management highlighted the announced acquisition of Illinois State Bancorp, Inc., parent of First Nations Bank and The Bank of Bourbonnais, as a means to expand market presence and strengthen the core deposit base. The reported period therefore combines stronger revenue, margin, earnings, deposits and capital ratios with rising expenses, weaker loan balances, and deteriorating non-performing asset and charge-off measures.
Management, verbatim
We delivered record earnings and returned more than $20 million of capital to stockholders through share repurchases and a 16.7% increase in our common dividend to $0.14 per share during the third quarter.
Roberto R. Herencia, Executive Chairman and CEO of Byline Bancorp
The third quarter produced record net interest income of $103.7 million and expanded our net interest margin by five basis points to 4.33% in a quarter when funding costs rose across the industry.
Alberto J. Paracchini, President of Byline Bancorp
Not in the filing
stated, not guessed- Forward financial guidance was not provided.
- Previous-release outlook was not provided, so no comparison with prior guidance is available.
- Operating cash flow and free cash flow were not reported.
- Gross margin was not reported.
- Operating income was not reported.
- Dollar amount of common share repurchases was not reported.
- CFO commentary was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Byline Bancorp is a regional bank listed on NYSE under ticker BY. The 8‑K filing provides its Q3 2026 financial results.
Ticker impact
Byline Bancorp reported record Q3 2026 revenue of $121M, EPS $0.94 and a dividend increase to $0.14 per share.
potential modest upside as investors price in record earnings and higher dividend
The company delivered better-than-expected earnings, increased dividend and announced an acquisition, all of which are bullish catalysts.
Market effects
Strengthens the regional community banking sector by showing profitability despite higher funding costs.
Positive for Midwestern U.S. banking stocks as BY's results may set a benchmark.
Limited; primarily a domestic banking story.
Counterpoint
The modest revenue size and higher funding costs could limit upside; investors may wait for guidance on future growth.
Key entities
- companyByline Bancorp, Inc.
Subject of the earnings release.
- companyIllinois State Bancorp, Inc.
Target of the announced acquisition.
