Byline Bancorp, Inc. (BY): Business Model Canvas [10-2024 Updated]

In the competitive landscape of banking, Byline Bancorp, Inc. (BY) stands out with a well-defined business model that caters to diverse customer needs. This model is built on key partnerships with financial institutions and technology providers, alongside a strong commitment to community engagement. Byline Bancorp offers personalized banking solutions that not only prioritize customer satisfaction but also ensure robust risk management and compliance. Discover how their unique approach, from revenue streams to customer relationships, positions them for success in the financial sector.

Byline Bancorp, Inc. (BY) - Business Model: Key Partnerships

Collaborations with financial institutions

Byline Bancorp collaborates with several financial institutions to enhance its lending capabilities and liquidity. As of September 30, 2024, Byline Bank had maximum advance potential from the Federal Home Loan Bank (FHLB) of $3.4 billion and from the Federal Reserve Bank (FRB) of $781 million. The bank had open FHLB advances totaling $470 million.

Partnerships with technology providers

Byline Bancorp engages with technology providers to streamline its banking operations and improve customer experience. The bank utilizes various software solutions for loan processing, customer relationship management, and digital banking services. Specific financial details regarding these technology partnerships are not disclosed, but they play a critical role in enhancing operational efficiency and service delivery.

Relationships with regulatory bodies

Byline Bancorp maintains strong relationships with regulatory bodies to ensure compliance and facilitate its operations. As of September 30, 2024, the bank was classified as "well-capitalized," exceeding all applicable regulatory capital requirements with a total capital ratio of 14.41%. This classification is crucial for maintaining its operational licenses and for engaging in strategic partnerships with other financial entities.

Engagement with community organizations

Byline Bancorp actively engages with community organizations to support local economic development and enhance its community presence. This engagement includes participation in local events, sponsorships, and partnerships aimed at improving financial literacy and access to banking services. The bank’s commitment to community involvement is reflected in its status as a leading originator of SBA loans, where it was recognized as the most active 7(a) and 504 lender in Illinois for the fiscal year ended September 30, 2024.

Partnership Type	Details	Financial Impact
Financial Institutions	Collaborations with FHLB and FRB	Max advance potential: $3.4 billion (FHLB), $781 million (FRB)
Technology Providers	Enhanced banking operations and customer experience	Operational efficiency improvements (specific financials undisclosed)
Regulatory Bodies	Compliance and operational licensing	Well-capitalized status with a total capital ratio of 14.41%
Community Organizations	Local economic development and financial literacy	Leading SBA lender in Illinois, supporting local businesses

Byline Bancorp, Inc. (BY) - Business Model: Key Activities

Providing a range of banking services

Byline Bancorp, Inc. offers a comprehensive suite of banking services catering to both retail and commercial customers. As of September 30, 2024, total gross loans and leases outstanding reached $6.9 billion, an increase from $6.7 billion at December 31, 2023, reflecting a growth of 2.9%. The bank provides various loan types including commercial real estate, residential, and industrial loans, with commercial loans constituting a significant portion of the portfolio.

Loan Type	Outstanding Balance (September 30, 2024)	Percentage of Total Loans
Commercial Real Estate	$2.4 billion	34.8%
Residential Real Estate	$710.4 million	10.3%
Commercial and Industrial	$2.6 billion	37.7%
Lease Financing Receivables	$711.4 million	10.3%
Other Loans	$499.8 million	7.2%

Risk management and compliance

Effective risk management and compliance are critical activities for Byline Bancorp, ensuring adherence to regulatory standards. As of September 30, 2024, the bank reported a Common Equity Tier 1 (CET1) capital ratio of 11.35%, exceeding the required minimum of 4.5%. Byline Bank is recognized as “well-capitalized” under regulatory standards, demonstrating robust risk management practices.

Capital Ratios	Byline Bancorp (as of September 30, 2024)	Minimum Requirement
Total Capital to Risk Weighted Assets	14.41%	8.00%
Tier 1 Capital to Risk Weighted Assets	12.39%	6.00%
CET1 to Risk Weighted Assets	11.35%	4.50%

Customer service and support

Byline Bancorp emphasizes exceptional customer service as a key activity. The bank operates 46 branches across the Chicago metropolitan area and Wisconsin, providing local access to its banking services. The focus on customer support is evident in its efforts to maintain high levels of customer satisfaction and retention.

Marketing and business development

Marketing and business development play vital roles in Byline Bancorp's strategy to expand its customer base. The bank leverages digital marketing, community engagement, and targeted campaigns to attract both individual and business clients. For the nine months ended September 30, 2024, Byline reported $90.4 million in net income, reflecting effective marketing strategies that drive growth.

Financial Performance Metrics	2024 (Nine Months Ended)
Net Income	$90.4 million
Return on Average Assets	1.32%
Return on Average Equity	11.81%

Byline Bancorp, Inc. (BY) - Business Model: Key Resources

Skilled workforce with financial expertise

Byline Bancorp's workforce is comprised of professionals with extensive experience in banking and finance. As of September 30, 2024, the company reported an increase in salaries and employee benefits, reflecting investments in human capital, which amounted to approximately $60 million for the nine months ended September 30, 2024. This investment supports the company's commitment to maintaining a skilled workforce capable of delivering high-quality financial services.

Robust IT infrastructure

Byline Bancorp has developed a robust IT infrastructure to support its operations. The bank has invested significantly in technology upgrades, including a $3.6 million reduction in data processing expenses attributed to efficiency improvements. The bank's IT systems are designed to enhance customer service and streamline operations, which is critical in the competitive banking environment.

Capital reserves exceeding regulatory requirements

As of September 30, 2024, Byline Bancorp reported total capital of $1.212 billion, with a total capital ratio of 14.41%, well above the minimum requirement of 8.00%. The company’s Tier 1 capital ratio stood at 12.39%, also exceeding the minimum requirement of 6.00%. This strong capital position ensures that Byline Bancorp can absorb potential losses and continue to operate effectively, providing stability to its financial operations.

Diverse loan and investment portfolios

Byline Bancorp's loan and investment portfolios are diversified, with total gross loans and leases outstanding of $6.9 billion as of September 30, 2024. The company’s loan portfolio includes:

Loan Type	Outstanding Balance ($ millions)	Percentage of Total Loans (%)
Commercial Real Estate	2,006.2	29.1
Residential Real Estate	704.4	10.2
Commercial and Industrial	1,288.6	18.6
Consumer Loans	1,420.0	20.5
Other Loans	1,420.0	20.5

This diversification helps mitigate risk and enhances the bank's ability to generate income across various economic conditions.

Byline Bancorp, Inc. (BY) - Business Model: Value Propositions

Personalized banking solutions for clients

Byline Bancorp, Inc. offers tailored banking services that cater to the unique needs of its diverse clientele, including personal banking, business banking, and wealth management solutions. The bank emphasizes local decision-making, which enhances customer service and provides clients with customized financial products. As of September 30, 2024, Byline Bancorp had total assets of $9.4 billion, with a significant portion allocated to personalized solutions aimed at small to medium-sized enterprises (SMEs) and individual customers.

Competitive interest rates on loans and deposits

Byline Bancorp is committed to providing competitive interest rates across its loan and deposit products. As of September 30, 2024, the average interest rate for loans and leases was 7.48%, while the average rates on deposits included 2.34% for interest checking accounts and 3.56% for money market accounts. The bank's total deposits reached $7.5 billion, reflecting a 4.5% increase from the previous year, driven by an uptick in time deposits and money market accounts.

Product Type	Average Rate (2024)	Average Balance (in $ millions)
Loans and Leases	7.48%	6,827.7
Interest Checking	2.34%	754.6
Money Market Accounts	3.56%	2,386.9
Savings Accounts	0.15%	495.5
Time Deposits (<$100,000)	4.80%	975.2
Time Deposits (≥$100,000)	4.91%	1,159.4

Commitment to community engagement

Byline Bancorp actively engages in community development through various initiatives aimed at supporting local businesses and enhancing financial literacy among underserved populations. The bank's engagement is reflected in its support for local events and partnerships with community organizations. Byline Bancorp’s commitment is further demonstrated by its significant community investments, totaling approximately $1.2 million in 2024 for local projects and programs.

Strong focus on customer satisfaction and support

Byline Bancorp maintains a strong focus on customer satisfaction by integrating feedback mechanisms and ensuring high-quality customer service across all channels. As of September 30, 2024, the bank reported an annualized return on average assets of 1.29% and a return on average stockholders’ equity of 11.39%, indicative of its effective management and customer-centric approach. The bank’s efficiency ratio improved to 52.02% for Q3 2024, showcasing its operational efficiency and commitment to maintaining high service standards.

Byline Bancorp, Inc. (BY) - Business Model: Customer Relationships

Direct engagement through dedicated account managers

Byline Bancorp employs dedicated account managers to foster direct relationships with clients. This approach enhances customer satisfaction and retention, as managers are tasked with understanding client needs and providing tailored services. As of September 30, 2024, Byline Bancorp reported total deposits of $7.5 billion, reflecting the effectiveness of these personalized interactions in retaining customers.

Use of CRM systems for personalized communication

The company utilizes advanced Customer Relationship Management (CRM) systems to facilitate personalized communication. This system allows account managers to track customer interactions, preferences, and feedback. The integration of CRM tools has contributed to an increase in non-interest income, which reached $42.7 million for the nine months ended September 30, 2024, compared to $41.8 million for the same period in 2023.

Regular feedback mechanisms for service improvement

Byline Bancorp implements regular feedback mechanisms to improve services. Customer satisfaction surveys and direct feedback channels enable the bank to identify areas for enhancement. This proactive approach is reflected in the company's efficiency ratio, which improved to 52.02% for the three months ended September 30, 2024, compared to 53.75% for the same period in 2023.

Community outreach programs to build trust

Community outreach programs are integral to Byline Bancorp's strategy to build trust and enhance customer relationships. These initiatives include financial literacy workshops and local sponsorships, which not only engage the community but also position Byline as a trusted financial partner. The company's commitment to community involvement is evident in its increased total assets, which rose to $9.4 billion as of September 30, 2024.

Customer Relationship Strategy	Details	Impact Metrics
Dedicated Account Managers	Personalized client engagement to understand needs	Total Deposits: $7.5 billion (Sept 2024)
CRM Systems	Advanced tools for personalized communication	Non-Interest Income: $42.7 million (9M 2024)
Feedback Mechanisms	Regular surveys for service improvement	Efficiency Ratio: 52.02% (Q3 2024)
Community Outreach	Programs to build trust and engagement	Total Assets: $9.4 billion (Sept 2024)

Byline Bancorp, Inc. (BY) - Business Model: Channels

Branch network for in-person banking

Byline Bancorp operates a robust branch network consisting of 45 locations in the Chicago metropolitan area and 1 branch in Wauwatosa, Wisconsin. These branches serve as critical touchpoints for customer interactions, enabling clients to engage in various banking activities, including deposits, withdrawals, and consultations.

Total deposits at September 30, 2024, were reported at $7.5 billion, showing an increase of $320.9 million or 4.5% compared to $7.2 billion at December 31, 2023.

Online banking platform for convenience

Byline Bancorp provides a comprehensive online banking platform designed for customer convenience. This platform allows users to manage their accounts, transfer funds, and pay bills from anywhere with internet access. The online banking service is part of Byline's strategy to enhance customer experience and accessibility.

As of September 30, 2024, Byline Bank reported total gross loans and leases outstanding of $6.9 billion, reflecting the importance of digital channels in facilitating loan applications and servicing.

Mobile app for customer access

The Byline Bank mobile app further enhances customer access to banking services. It enables customers to perform transactions, check balances, and deposit checks remotely. The app's integration with the bank's overall digital strategy is aimed at increasing customer engagement and satisfaction.

The mobile banking features have contributed to the growth in deposits, with non-interest-bearing deposits reported at $1.7 billion as of September 30, 2024.

Direct mail and email marketing campaigns

Byline Bancorp employs direct mail and email marketing campaigns to reach potential and existing customers. These campaigns are utilized to promote new products, services, and special offers. The effectiveness of these marketing strategies is reflected in the bank's ability to attract and retain customers.

For the nine months ended September 30, 2024, Byline Bancorp declared cash dividends of $11.9 million, indicating a strong financial performance that supports ongoing marketing efforts.

Channel	Description	Key Statistics
Branch Network	Physical locations for in-person banking	45 branches in Chicago, 1 in Wauwatosa; Total deposits: $7.5 billion
Online Banking	Web platform for account management	Total loans and leases: $6.9 billion
Mobile App	Mobile access to banking services	Non-interest-bearing deposits: $1.7 billion
Marketing Campaigns	Direct mail and email outreach	Cash dividends declared: $11.9 million for 2024

Byline Bancorp, Inc. (BY) - Business Model: Customer Segments

Individual consumers seeking personal banking

Byline Bancorp serves individual consumers by offering a variety of personal banking products, including checking accounts, savings accounts, and personal loans. As of September 30, 2024, total deposits from individual consumers amounted to approximately $1.7 billion, representing 23.1% of total deposits. The average interest rate for interest checking accounts was 2.34%, and for savings accounts, it was 0.15%. The bank focuses on providing personalized services through its 46 branches located primarily in the Chicago metropolitan area, enhancing customer experience and accessibility.

Small to medium-sized businesses

Byline Bancorp targets small to medium-sized businesses (SMBs) by offering a range of commercial banking products, including business checking accounts, lines of credit, and commercial loans. As of September 30, 2024, the bank reported total commercial loans and leases amounting to $1.4 billion. The average interest rate for business loans was approximately 7.5%. SMBs are crucial for Byline's deposit growth, contributing to a significant portion of the bank's core deposits, which accounted for 84.8% of total deposits as of the same date.

Commercial real estate investors

Byline Bancorp actively serves commercial real estate investors by providing tailored financing solutions. As of September 30, 2024, total loans for commercial real estate were approximately $2.3 billion. The bank's strategy includes leveraging local market knowledge to offer competitive rates and flexible terms, which are essential for attracting real estate investment. The non-accrual loans in the commercial real estate sector stood at $6.5 million, reflecting the bank's commitment to managing risk effectively.

Non-profit organizations

Byline Bancorp also caters to non-profit organizations, providing them with banking services tailored to their unique financial needs. This segment benefits from special deposit products and loan options designed specifically for non-profits. As of September 30, 2024, non-profit organizations represented a growing customer segment, contributing to the bank's overall deposit base. The bank’s ability to offer favorable terms and dedicated support for non-profits enhances its appeal to this customer group, which values community engagement and social impact.

Customer Segment	Products Offered	Total Loans/Deposits (as of 09/30/2024)	Average Interest Rate
Individual Consumers	Checking Accounts, Savings Accounts, Personal Loans	$1.7 billion deposits	2.34% (Checking), 0.15% (Savings)
Small to Medium-sized Businesses	Business Checking, Lines of Credit, Commercial Loans	$1.4 billion loans	7.5%
Commercial Real Estate Investors	Commercial Real Estate Loans	$2.3 billion loans	Varies by loan
Non-profit Organizations	Special Deposit Products, Loans	Growing segment of deposits	Favorable terms

Byline Bancorp, Inc. (BY) - Business Model: Cost Structure

Employee salaries and benefits

Salaries and employee benefits represented the largest component of Byline Bancorp's non-interest expenses, totaling $35.0 million for each of the three months ended September 30, 2024, and 2023. For the nine months ended September 30, 2024, these expenses amounted to $102.8 million, compared to $95.0 million for the same period in 2023, reflecting an increase of $7.8 million or 8.2%, primarily due to merit increases, lower deferred salaries, and higher commissions paid.

Operational costs for branches and technology

Occupancy and equipment expenses, net for the three months ended September 30, 2024, were $4.4 million, a decrease of $941,000 or 17.7% from $5.3 million in the same period of 2023. For the nine months ended September 30, 2024, these expenses were $14.3 million, compared to $14.2 million for the same period in 2023, an increase of $134,000 or 0.9%, primarily due to branches acquired in the Inland acquisition.

Data processing expenses totaled $4.2 million for the three months ended September 30, 2024, down from $6.5 million in 2023, a decrease of $2.3 million or 34.9%. For the nine months, data processing costs were $12.4 million, compared to $14.5 million, a decrease of $2.1 million or 14.7%, largely due to prior merger-related expenses.

Regulatory compliance expenses

Legal, audit, and other professional fees for the three months ended September 30, 2024, were $3.6 million, down from $3.8 million in 2023, a decrease of $162,000 or 4.3%. For the nine months ended September 30, 2024, these expenses totaled $10.1 million, compared to $10.6 million in 2023, a decrease of $524,000 or 5.0%, driven by lower merger-related expenses.

Marketing and advertising expenditures

Other non-interest expenses, which include marketing and advertising, amounted to $5.0 million for the three months ended September 30, 2024, compared to $4.8 million for the same period in 2023, indicating an increase of $167,000 or 3.5%. For the nine months, these expenses were $15.7 million, up from $14.7 million in 2023, marking an increase of $1.0 million or 6.8%, primarily due to branch consolidation charges.

Cost Component	Q3 2024 (in millions)	Q3 2023 (in millions)	YTD 2024 (in millions)	YTD 2023 (in millions)	Change (in millions)	Percentage Change
Salaries and Employee Benefits	35.0	35.0	102.8	95.0	7.8	8.2%
Occupancy and Equipment Expense	4.4	5.3	14.3	14.2	0.1	0.9%
Data Processing	4.2	6.5	12.4	14.5	-2.1	-14.7%
Legal, Audit, and Professional Fees	3.6	3.8	10.1	10.6	-0.5	-5.0%
Other Non-Interest Expense	5.0	4.8	15.7	14.7	1.0	6.8%

Byline Bancorp, Inc. (BY) - Business Model: Revenue Streams

Interest income from loans and leases

For the nine months ended September 30, 2024, Byline Bancorp reported total interest income of $82.5 million attributed to loans and leases, which represented an increase of $61.7 million compared to the same period in 2023. This growth was primarily driven by an increase in average balances and higher yields on interest-earning assets.

Fees from banking services and transactions

Fees and service charges on deposits were $7.6 million for the nine months ended September 30, 2024, compared to $6.7 million for the same period in 2023, reflecting a 12.5% increase. This increase was largely due to higher deposit balances.

Income from investment securities

Byline Bancorp's investment securities portfolio consisted of $1.5 billion in available-for-sale securities as of September 30, 2024, which increased by $159.6 million from December 31, 2023. The fair value of these securities was impacted by purchases, net of maturities, and a decrease in unrealized losses.

Wealth management and advisory fees

Wealth management and trust income was reported at $3.2 million for the nine months ended September 30, 2024, an increase from $2.9 million for the same period in 2023. This growth was attributed to an increase in assets under administration, which totaled $747.7 million as of September 30, 2024.

Revenue Streams	Q3 2024 Amount ($ million)	Q3 2023 Amount ($ million)	Change (%)
Interest income from loans and leases	82.5	20.8	296.7
Fees from banking services and transactions	7.6	6.7	12.5
Income from investment securities	N/A	N/A	N/A
Wealth management and advisory fees	3.2	2.9	10.3

Article updated on 8 Nov 2024

Resources:

1. Byline Bancorp, Inc. (BY) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Byline Bancorp, Inc. (BY)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Byline Bancorp, Inc. (BY)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.