Byline Bancorp plans to consolidate six branches, sell a portfolio of bank-owned real estate and reduce the amount of office space it occupies in an effort to cut costs.
The $6.7 billion-asset Chicago bank said late Friday that the plan would result in a $15 million charge to be recorded in the fourth quarter and the first half of 2022, but would generate $5.3 million in annual savings going forward. As much as 70% of the annual savings will be reinvested “into talent and technology that will further enhance our digital banking capabilities,” Alberto Paracchini, the bank's president, said in a press release.
“While we believe branches are, and will continue to be, an essential part of delivering banking services, we also recognize the need to continue to invest in our digital channels to adapt to the way customers want to conduct their banking with us,” Paracchini added.
Byline expects to complete the branch consolidations in the second quarter of 2022. Since the end of 2014, Byline has cut its branch count almost in half, from 87 to 44.
Analyst Ben Gerlinger, who covers Byline for Hovde, projected in a research note Monday that $1.6 million of the estimated annual savings would fall to Byline’s bottom line beginning the third quarter of 2022. Gerlinger boosted full-year earnings estimates for both 2022 and 2023 by three cents, to $1.89 per share and $2.03 per share, respectively.
Byline reported net income of $75 million through the first nine months of 2021, including $25.1 million in the quarter ending Sept. 30.
Byline joins several banking companies in announcing branch consolidations plans in recent weeks. The $19.9 billion-asset Atlantic Union Bankshares in Richmond, Virginia,
Last week, the $55.5 billion-asset Synovus Financial in Columbus, Georgia,
