Byline Bancorp, Inc. reported a record total revenue of $121.0 million for the third quarter of 2026, driving net income to $41.8 million and diluted earnings per share to $0.94. The Chicago-based lender attributed the performance to a 2.8% year-over-year increase in net interest income and a 4.6% rise in total revenue compared to the same period last year.
Net interest income reached $103.7 million, up $2.8 million from the second quarter of 2026. The company stated this growth was primarily driven by higher interest income from investment securities and lower interest expense on other borrowings due to reduced wholesale funding levels. These gains were partially offset by higher interest expense on deposits. The net interest margin expanded by five basis points to 4.33%, a result attributed to higher yields on investment securities and lower Federal Home Loan Bank advances, which outweighed the higher rates paid on deposits.
Non-interest income rose 2.7% to $17.3 million, led by increased bank-owned life insurance income, customer swap activity, and wealth management and trust income. These positive factors were partially offset by lower loan servicing asset revaluation and net gains on sales of loans. Net gains on sales of loans totaled $5.8 million for the quarter, a decrease of 4.8% from the prior quarter. During the period, Byline Bancorp sold $70.8 million of U.S. government guaranteed loans, compared to $78.1 million in the second quarter of 2026.
Non-interest expenses increased by 5.9% to $59.8 million, mainly due to a $3.4 million rise in salaries and employee benefits, along with higher legal, audit, and other professional fees. This expense growth pushed the efficiency ratio to 48.40%, an increase of 147 basis points from the 46.93% recorded in the second quarter of 2026. The company noted that lower advertising and promotions expense and reduced impairment charges on assets held for sale partially offset the increases in other cost categories.
The provision for credit losses decreased by 5.8% to $6.7 million, reflecting improvements in collateral-related qualitative factors and favorable trends in certain industry indicators. These improvements were partially offset by increased reserves associated with certain individually evaluated loans.
Roberto R. Herencia, Executive Chairman and CEO of Byline Bancorp, stated that the company 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. Herencia also highlighted the pending deal to acquire Illinois State Bancorp, Inc., which serves as the parent company for First Nations Bank and The Bank of Bourbonnais, noting that the move broadens the firm's market reach and bolsters its core deposit foundation.
Alberto J. Paracchini, President of Byline Bancorp, added that deposits grew at an 8.5% annualized rate while the cost of deposits rose three basis points. Paracchini said the company's strong capital position provides flexibility to support growth and capitalize on market opportunities as it pursues its vision of becoming the preeminent commercial bank in Chicago.
The Board of Directors declared a cash dividend of $0.14 per share on October 6, 2026. The dividend is payable on November 17, 2026, to stockholders of record as of November 3, 2026.