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BY vs. PBFS: Which Bank Stock Carries Lower Debt Burden?
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Debt levels matter for bank investors because heavy reliance on borrowings can raise funding costs and constrain financial flexibility, especially when interest rates remain elevated. A comparison of Byline Bancorp, Inc. (BY - Free Report) and Pioneer Bancorp, Inc. (PBFS - Free Report) shows a notable difference in their debt profiles as of June 30, 2026.
BY carried a total debt of $606.2 million at the end of the second quarter. This included $460.4 million in other borrowings, $74 million in subordinated notes and $71.8 million in junior subordinated debentures. Other borrowings alone consisted largely of $384.8 million in Federal Home Loan Bank advances and $75.7 million in securities sold under repurchase agreements.
Against stockholders’ equity of $1.30 billion, BY's debt-to-capitalization ratio (calculated as debt divided by debt plus stockholders’ equity) stood at 31.7% at June 30, 2026. This was modestly above 30.8% as of Dec. 31, 2025, when debt totaled $564.9 million and equity was $1.27 billion. The increase mainly reflects higher other borrowings, particularly FHLB advances. Still, BY's capital position remains substantial, with management noting that capital ratios were above regulatory requirements and provided flexibility for loan growth, dividends and share repurchases.
PBFS presents a considerably different picture. The company had no FHLB borrowings outstanding at June 30, 2026, after repaying the $50-million balance reported at Dec. 31, 2025. Consequently, based on reported interest-bearing borrowings, PBFS had effectively zero debt at quarter-end compared with shareholders’ equity of $328.3 million. At the end of 2025, the corresponding ratio was 13.4%.
What Does This Mean for Investors?
From a balance-sheet leverage perspective, PBFS carries the lighter debt burden. The elimination of its FHLB borrowings during the first half of 2026 reduces direct borrowing-related interest obligations and gives the company additional capacity to tap wholesale funding if needed. This could be particularly useful as PBFS expands its loan portfolio and integrates recent acquisitions. Its loans grew 13.6% from the end of 2025, while deposits increased 13.2%, suggesting that recent balance-sheet growth has not required continued FHLB borrowing.
BY's higher debt-to-capitalization ratio does not necessarily signal balance-sheet weakness, particularly given its much larger asset base and stronger absolute equity position. However, investors should monitor its borrowing mix because funding costs have already been a factor in profitability. BY reported that higher funding costs weighed on the second-quarter net interest margin, while total borrowings and other liabilities declined sequentially mainly because of lower FHLB advances.
Overall, the comparison shows that PBFS enters the second half of 2026 with substantially less balance-sheet debt than BY, while BY maintains greater absolute capital and a broader funding structure. For investors, PBFS's low debt exposure may offer greater funding flexibility, whereas BY's higher leverage warrants closer attention to borrowing costs and the impacts of funding conditions on margins.
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BY vs. PBFS: Which Bank Stock Carries Lower Debt Burden?
Debt levels matter for bank investors because heavy reliance on borrowings can raise funding costs and constrain financial flexibility, especially when interest rates remain elevated. A comparison of Byline Bancorp, Inc. (BY - Free Report) and Pioneer Bancorp, Inc. (PBFS - Free Report) shows a notable difference in their debt profiles as of June 30, 2026.
BY carried a total debt of $606.2 million at the end of the second quarter. This included $460.4 million in other borrowings, $74 million in subordinated notes and $71.8 million in junior subordinated debentures. Other borrowings alone consisted largely of $384.8 million in Federal Home Loan Bank advances and $75.7 million in securities sold under repurchase agreements.
Against stockholders’ equity of $1.30 billion, BY's debt-to-capitalization ratio (calculated as debt divided by debt plus stockholders’ equity) stood at 31.7% at June 30, 2026. This was modestly above 30.8% as of Dec. 31, 2025, when debt totaled $564.9 million and equity was $1.27 billion. The increase mainly reflects higher other borrowings, particularly FHLB advances. Still, BY's capital position remains substantial, with management noting that capital ratios were above regulatory requirements and provided flexibility for loan growth, dividends and share repurchases.
PBFS presents a considerably different picture. The company had no FHLB borrowings outstanding at June 30, 2026, after repaying the $50-million balance reported at Dec. 31, 2025. Consequently, based on reported interest-bearing borrowings, PBFS had effectively zero debt at quarter-end compared with shareholders’ equity of $328.3 million. At the end of 2025, the corresponding ratio was 13.4%.
What Does This Mean for Investors?
From a balance-sheet leverage perspective, PBFS carries the lighter debt burden. The elimination of its FHLB borrowings during the first half of 2026 reduces direct borrowing-related interest obligations and gives the company additional capacity to tap wholesale funding if needed. This could be particularly useful as PBFS expands its loan portfolio and integrates recent acquisitions. Its loans grew 13.6% from the end of 2025, while deposits increased 13.2%, suggesting that recent balance-sheet growth has not required continued FHLB borrowing.
BY's higher debt-to-capitalization ratio does not necessarily signal balance-sheet weakness, particularly given its much larger asset base and stronger absolute equity position. However, investors should monitor its borrowing mix because funding costs have already been a factor in profitability. BY reported that higher funding costs weighed on the second-quarter net interest margin, while total borrowings and other liabilities declined sequentially mainly because of lower FHLB advances.
Overall, the comparison shows that PBFS enters the second half of 2026 with substantially less balance-sheet debt than BY, while BY maintains greater absolute capital and a broader funding structure. For investors, PBFS's low debt exposure may offer greater funding flexibility, whereas BY's higher leverage warrants closer attention to borrowing costs and the impacts of funding conditions on margins.