Byline Bancorp raises dividend as adjusted earnings rise
The bank reported adjusted earnings of $0.91 a share for the second quarter.
Byline Bancorp (BY) reported adjusted earnings of $0.91 a share for the second quarter. The bank holding company saw a sequential increase in profitability driven by a rise in non-interest income and improved operational efficiency, despite pressure on its interest margins.
Adjusted earnings per share rose 9.6% from the prior quarter and 21.3% from $0.75 a share in the second quarter of 2024. The company's adjusted efficiency ratio improved 327 basis points to 46.51% from 49.78% in the first quarter.
Net interest income rose 1.0% sequentially to $100.8 million. The gain was primarily due to one additional calendar day in the period, which offset higher funding costs. Consequently, net interest margin compressed 5 basis points to 4.28% from 4.33% in the first quarter.
Non-interest income increased 34.6% sequentially to $16.9 million. Growth was driven by higher net gains on loan sales and a $1.9 million favorable change in the fair value of equity securities. Non-interest expense decreased 1.2% sequentially to $56.5 million, as lower salaries and occupancy expenses outweighed a $496,000 impairment charge for a closed branch.
Total loans and leases grew $79.0 million during the quarter. This growth included a $67.1 million increase in originated commercial and industrial loans. Total deposits rose 0.9% sequentially to $7.9 billion, driven largely by growth in interest-bearing deposits.
Credit metrics showed mixed trends. The provision for credit losses increased 29.3% sequentially to $7.2 million due to loan portfolio growth and additional allocations on individually assessed loans. However, net charge-offs decreased by $1.5 million to $4.4 million, and the annualized rate dropped to 0.24% from 0.32% in the first quarter.
The Board increased the quarterly cash dividend by 16.7% to $0.14 a share from $0.12 a share.