| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 65.23 | 129 |
| Intrinsic value (DCF) | 8.50 | -70 |
| Graham-Dodd Method | 29.37 | 3 |
| Graham Formula | n/a |
Byline Bancorp, Inc. (NYSE: BY) is a Chicago-based regional bank holding company offering a comprehensive suite of banking and financial services tailored to small and medium-sized businesses, commercial real estate clients, and individual consumers. Operating through Byline Bank, the company provides deposit products, commercial and retail lending, treasury management, and wealth management services across 44 branches in the Chicago metropolitan area and Wisconsin. Founded in 1914, Byline Bancorp has built a strong regional presence with a focus on relationship-driven banking, SBA lending, and specialized financing solutions for private equity-backed middle-market firms. As a mid-cap regional bank with $1.19 billion market capitalization, Byline competes in the highly fragmented Midwest banking sector while maintaining above-average profitability metrics compared to peers. The bank's strategic emphasis on commercial lending (representing 70% of its loan portfolio) and fee-based services positions it well in a rising rate environment, though its concentrated geographic footprint presents both stability and concentration risk.
Byline Bancorp presents an interesting regional banking investment case with its strong commercial lending focus and above-peer profitability (3.0% ROA, 12.5% ROE in 2023). The bank's specialized lending verticals (SBA, equipment financing, sponsor finance) provide niche advantages, while its 0.38 annual dividend offers a modest 1.6% yield. Key risks include geographic concentration in the competitive Chicago market (43 of 44 branches), exposure to commercial real estate (28% of loans), and sensitivity to economic cycles given its SME focus. The stock's 0.85 beta suggests slightly less volatility than broader markets, while valuation metrics (10.5x P/E, 1.3x P/B) appear reasonable relative to regional bank peers. Investors should monitor net interest margin trends (3.85% in 2023) and loan growth in a potentially slowing economic environment.
Byline Bancorp occupies a middle-market position in the intensely competitive Chicago banking landscape, differentiating itself through specialized lending capabilities and relationship banking. The bank's competitive advantages include: 1) Deep expertise in SBA lending and sponsor finance, creating sticky client relationships; 2) Higher-than-peer commercial loan yields (5.8% vs. 5.2% regional average) from its niche focus; 3) Efficient operations with 55% efficiency ratio. However, it faces significant scale disadvantages versus national players in technology investments and pricing power. Byline's deposit base (76% core deposits) provides stable funding but with higher costs (1.2% cost of deposits) than larger competitors. The bank's community-focused model helps retain commercial clients but limits geographic diversification. In wealth management, its offerings are basic compared to larger trust banks. Going forward, Byline must balance growth in higher-risk commercial segments with maintaining credit quality (0.4% NPL ratio) while competing against both super-regional banks with lower funding costs and fintechs disrupting SME banking.