8-K
FIRST BUSINESS FINANCIAL SERVICES, INC. (FBIZ)
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): July 24, 2025 |
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First Business Financial Services, Inc.
(Exact name of Registrant as Specified in Its Charter)
| Wisconsin | 001-34095 | 39-1576570 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
| 401 Charmany Drive | ||
| Madison, Wisconsin | 53719 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
| Registrant’s Telephone Number, Including Area Code: 608 238-8008 | ||
| --- | ||
| N/A | ||
| --- |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.01 par value | FBIZ | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On July 24, 2025, First Business Financial Services, Inc. (the “Company”) announced its earnings for the quarter ended June 30, 2025. A copy of the Company’s press release containing this information is being “furnished” as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On July 24, 2025, the Company posted an investor presentation to its website www.firstbusiness.bank under the “Investor Relations” tab. The information included in the presentation provides an overview of the Company’s recent operating performance, financial condition, and business strategy. The Company intends to use this presentation in connection with its second quarter 2025 earnings call to be held at 1:00 p.m. Central time on July 25, 2025, and from time to time when the Company's executives interact with shareholders, analysts, and other third parties. A copy of the registrant’s presentation is attached hereto as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.
The information in Items 2.02 and 7.01 of this Current Report on Form 8-K and Exhibits 99.1 and 99.2 attached hereto is being “furnished” and will not, except to the extent required by applicable law or regulation, be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor will any of such information or exhibits be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibit is being “furnished” as part of this Current Report on Form 8-K:
| 99.1 | Press release of the registrant dated July 24, 2025, containing financial information for its quarter ended June 30, 2025. |
|---|---|
| 99.2 | Supplemental earnings call slides |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL Document) |
| --- | --- |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| July 24, 2025 | FIRST BUSINESS FINANCIAL SERVICES, INC. | |
|---|---|---|
| By: | /s/ Brian D. Spielmann | |
| Name: | Brian D. Spielmann | |
| Title: | Chief Financial Officer |
EX-99.1
Exhibit 99.1
FIRST BUSINESS BANK REPORTS SECOND QUARTER 2025 NET INCOME OF $11.2 MILLION
-- Robust balance sheet expansion supports continued earnings and tangible book value growth --
MADISON, Wis., July 24, 2025 (BUSINESS WIRE) -- First Business Financial Services, Inc. (the “Company”, the “Bank”, or “First Business Bank”) (Nasdaq:FBIZ) reported quarterly net income available to common shareholders of $11.2 million, or earnings per share ("EPS") of $1.35. This compares to net income available to common shareholders of $11.0 million, or $1.32 per share, in the first quarter of 2025 and $10.2 million, or $1.23 per share, in the second quarter of 2024.
“First Business Bank’s strong second quarter results demonstrate our consistent ability to drive quality balance sheet and earnings growth,” said Corey Chambas, Chief Executive Officer. “We grew loans over 8% and core deposits by 11% by continuing to execute our relationship-based growth strategy. Driven by continued operational efficiency and strong asset quality, we achieved 10% growth in operating revenue, 18% growth in pre-tax, pre-provision earnings, and 17% growth in net income for the first half of 2025 which demonstrates strong execution of our long-term strategic goals. These successes contributed to tangible book value expanding an impressive 14% from the prior year.”
Quarterly Highlights
- Robust Deposit Growth. Total deposits, consisting of core deposits and wholesale deposits, grew $62.2 million, or 7.7% annualized, from the linked quarter and $420.0 million, or 14.6%, from the second quarter of 2024. Core deposits grew $70.4 million, or 11.4% annualized, from the linked quarter and $223.5 million, or 9.7%, from the second quarter of 2024.
- Strong and Consistent Loan Growth. Loans increased $66.9 million, or 8.4% annualized, from the first quarter of 2025, and $266.9 million, or 8.9%, from the second quarter of 2024, reflecting broad-based growth.
- Stable and Strong Net Interest Margin. The Company's effective match-funding strategy and pricing discipline produced a net interest margin of 3.67%, compared to 3.69% for the linked quarter and 3.65% for the prior year quarter. Net interest income increased 10.6% from the prior year quarter.
- Private Wealth Management Expansion. Private Wealth assets under management and administration grew to $3.731 billion, generating record quarterly Private Wealth fee income of $3.7 million. Private Wealth fees increased by 8.3% from the prior year quarter and comprised 49% of year-to-date total non-interest income.
- Strong Tangible Book Value Growth. The Company’s strong earnings and sound balance sheet management continued to drive growth in tangible book value per share, producing a 10.2% annualized increase compared to the linked quarter and a 13.6% increase compared to the prior year quarter.
Quarterly Financial Results
| (Unaudited) | As of and for the Three Months Ended | As of and for the Six Months Ended | |||
|---|---|---|---|---|---|
| (Dollars in thousands, except per share amounts) | June 30,<br>2025 | March 31,<br>2025 | June 30,<br>2024 | June 30,<br>2025 | June 30,<br>2024 |
| Net interest income | $33,784 | $33,258 | $30,540 | $67,042 | $60,051 |
| Adjusted non-interest income (1) | 7,255 | 7,579 | 7,425 | 14,834 | 14,190 |
| Operating revenue (1) | 41,039 | 40,837 | 37,965 | 81,876 | 74,241 |
| Operating expense (1) | 25,023 | 24,617 | 23,823 | 49,640 | 46,954 |
| Pre-tax, pre-provision adjusted earnings (1) | 16,016 | 16,220 | 14,142 | 32,236 | 27,287 |
| Less: | |||||
| Provision for credit losses | 2,701 | 2,659 | 1,713 | 5,360 | 4,039 |
| Net (gain) loss on repossessed assets | 4 | (8) | 65 | (4) | 151 |
| SBA recourse (benefit) provision | (59) | — | (9) | (59) | 117 |
| Impairment of tax credit investments | — | 110 | — | 110 | — |
| Add: | |||||
| Net loss on sale of securities | — | — | — | — | (8) |
| Income before income tax expense | 13,370 | 13,459 | 12,373 | 26,939 | 22,972 |
| Income tax expense | 1,948 | 2,288 | 1,917 | 4,236 | 3,668 |
| Net income | $11,422 | $11,171 | $10,456 | $22,703 | $19,304 |
| Preferred stock dividends | 219 | 219 | 219 | 438 | 438 |
| Net income available to common shareholders | $11,203 | $10,952 | $10,237 | $22,265 | $18,866 |
| Earnings per share, diluted | $1.35 | $1.32 | $1.23 | $2.66 | $2.26 |
| Book value per share | $39.98 | $39.04 | $35.35 | $39.98 | $35.35 |
| Tangible book value per share (1) | $38.54 | $37.58 | $33.92 | $38.54 | $33.92 |
| Net interest margin (2) | 3.67% | 3.69% | 3.65% | 3.68% | 3.62% |
| Adjusted net interest margin (1)(2) | 3.47% | 3.46% | 3.46% | 3.47% | 3.45% |
| Fee income ratio (non-interest income / total revenue) | 17.68% | 18.56% | 19.56% | 18.12% | 19.10% |
| Efficiency ratio (1) | 60.97% | 60.28% | 62.75% | 60.63% | 63.25% |
| Return on average assets (2) | 1.14% | 1.14% | 1.14% | 1.14% | 1.06% |
| Return on average tangible common equity (2) | 14.17% | 14.12% | 14.73% | 14.15% | 13.77% |
| Period-end loans and leases receivable | $3,250,925 | $3,184,400 | $2,985,414 | $3,250,925 | $2,985,414 |
| Average loans and leases receivable | $3,239,840 | $3,185,796 | $2,962,927 | $3,212,967 | $2,925,191 |
| Period-end core deposits | $2,533,099 | $2,462,695 | $2,309,635 | $2,533,099 | $2,309,635 |
| Average core deposits | $2,396,517 | $2,362,894 | $2,375,101 | $2,379,799 | $2,360,776 |
| Allowance for credit losses, including unfunded commitment reserves | $38,210 | $36,515 | $34,950 | $38,210 | $34,950 |
| Non-performing assets | $28,664 | $24,092 | $19,053 | $28,664 | $19,053 |
| Allowance for credit losses as a percent of total gross loans and leases | 1.18% | 1.15% | 1.17% | 1.18% | 1.17% |
| Non-performing assets as a percent of total assets | 0.72% | 0.61% | 0.53% | 0.72% | 0.53% |
- This is a non-GAAP financial measure. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate financial performance, provide greater understanding of ongoing operations, and enhance comparability of results with prior periods. See the section titled Non-GAAP Reconciliations at the end of this release for a reconciliation of GAAP financial measures to non-GAAP financial measures.
- Calculation is annualized.
Second Quarter 2025 Compared to First Quarter 2025
Net interest income increased $526,000, or 1.6%, to $33.8 million.
- The increase in net interest income was driven by higher average loans and leases receivable, partially offset by a decrease in fees in lieu of interest. Average loans and leases receivable grew by $54.0 million, or 6.8% annualized, to $3.240 billion. Fees in lieu of interest, which vary from quarter to quarter based on client-driven activity, totaled $1.7 million, compared to $2.1 million in the prior quarter. Excluding fees in lieu of interest, net interest income increased $905,000, or 2.9%.
- The yield on average interest-earning assets increased four basis points to 6.65% from 6.61%. Excluding fees in lieu of interest, the yield on average interest-earning assets increased nine basis points to 6.47% from 6.38%.
- The rate paid for average interest-bearing core deposits increased three basis points to 3.32% from 3.29%. The rate paid for average total bank funding increased six basis points to 3.08% from 3.02%. Total bank funding is defined as total deposits plus Federal Home Loan Bank (“FHLB”) advances.
- Net interest margin was 3.67% compared to 3.69% for the linked quarter. Adjusted net interest margin1 was 3.47%, up one basis point compared to 3.46% in the linked quarter. The increase in adjusted net interest margin was driven by an increase in the yield on interest-earning assets partially offset by an increase in rate paid on total bank funding.
- The Company maintains a long-term target for net interest margin in the range of 3.60% - 3.65%. Performance in future quarters will vary due to factors such as the level of fees in lieu of interest and the timing, pace, and scale of future interest rate changes.
The Bank reported provision for credit losses of $2.7 million in both periods of comparison. The current quarter provision was primarily driven by an increase in general reserves due to a deterioration in the economic outlook in our model forecast, an increase in qualitative factors, and loan growth; partially offset, by a decrease in specific reserve requirements.
Non-interest income decreased $324,000, or 4.3%, to $7.3 million.
- Private wealth fee income increased $256,000, or 7.3% to $3.7 million. Private Wealth assets under management and administration measured $3.731 billion on June 30, 2025, up $306.1 million, or 35.8% annualized from the prior quarter. Fee income is based on overall asset levels and may vary based on seasonal activity and the timing of fluctuations in market values.
- Gains on sale of SBA loans decreased $566,000, or 58.77%, to $397,000. Gain on sale of SBA loans varies period to period based on the amount of closed and fully funded loans. While quarterly gains may vary, management expects SBA loan production to continue growing year-over-year.
- Cash surrender value of bank-owned life insurance increased $178,000 or 40.7%, to $615,000 primarily due to the purchase of new policies totaling $24.5 million.
- Other non-interest income decreased $340,000 or 29.9% to $798,000. The decrease was primarily due to lower returns on the Company’s investments in Small Business Investment Company ("SBIC") funds. Income from SBIC funds was $200,000 in the second quarter, compared to $569,000 in the linked quarter. Income from SBIC funds varies from period to period based on changes in the realized and unrealized fair value of underlying investments.
Non-interest expense decreased $249,000, or 1.0%, to $25.0 million, while operating expense decreased $406,000, or 1.6%, to $25.0 million.
Compensation expense was $16.5 million, reflecting a decrease of $213,000, or 1.3%, from the linked quarter due to payroll taxes paid in the prior quarter on the annual cash bonus payout, partially offset by an expanded workforce. Average full-time equivalents (“FTEs”) for the second quarter of 2025 were 364, up from 353 in the linked quarter.
Adjusted net interest margin is a non-GAAP measure representing net interest income excluding fees in lieu of interest and other recurring, but volatile, components of net interest margin divided by average interest-earning assets less other recurring, but volatile, components of average interest-earning assets.
Data processing expense was $1.4 million, increasing $286,000, or 26.4%, from the linked quarter primarily due to annual expense related to tax processing on behalf of the Bank’s Private Wealth clients and elevated non-recurring credit card fees.
Income tax expense decreased $340,000 to $1.9 million. The effective tax rate was 14.6% for the three months ended June 30, 2025, compared to 17.0% for the linked quarter. The decrease in tax expense reflects updated tax credit partnership estimates, increased investment in bank-owned life insurance, and net benefit from quarterly discrete items. The effective tax rate for the six months ended June 30, 2025 was 15.8%. The Company expects to report an effective tax rate between 16% and 18% for 2025.
Total period-end loans and leases receivable increased $66.9 million, or 8.4% annualized, to $3.252 billion. The average rate earned on average loans and leases receivable was 6.99%, up five basis points from 6.94% in the prior quarter. Excluding fees in lieu of interest, the average rate earned on average loans and leases receivable was 6.78%, up 10 basis points from 6.68% in the prior quarter.
- Commercial Real Estate (“CRE”) loans increased by $37.2 million, or 7.8% annualized, to $1.947 billion, primarily due to an increase in multi-family loans in our southern Wisconsin markets.
- C&I loans increased $30.1 million, or 9.79% annualized, to $1.259 billion. The increase was due to growth across our bank markets and niche lending areas.
Total period-end core deposits increased $70.4 million, or 11.4% annualized, to $2.533 billion, compared to $2.463 billion. The average rate paid was 2.75%, up 4 basis points from 2.71% in the prior quarter.
Period-end wholesale funding, including FHLB advances and brokered deposits, decreased $18.7 million, or 1.8%, to $993.5 million. Consistent with the Bank’s long-held philosophy to minimize exposure to interest rate risk, management will continue to utilize the most efficient and cost-effective source of wholesale funds to match-fund fixed-rate loans, as necessary.
- Wholesale deposits decreased $8.2 million, or 4.2%, to $772.1 million, compared to $780.3 million. The average rate paid on wholesale deposits decreased one basis point to 4.02% and the weighted average original maturity remained flat at 4.1 years.
- FHLB advances decreased $10.5 million, or 4.5%, to $221.4 million, compared to $231.9 million. The average rate paid on FHLB advances increased 21 basis points to 3.32% and the weighted average original maturity increased to 5.5 years from 5.4 years.
Non-performing assets increased $4.6 million to $28.7 million, or 0.72% of total assets, increasing as a percentage of total assets from 0.61% in the prior quarter. The increase is primarily driven by one new non-accrual loan in the transportation and logistics segment of the C&I portfolio, partially offset by charge-offs of previously reserved equipment finance loans and paydowns on non-accrual C&I loans. We continue to expect full repayment of the previously disclosed Asset-Based Lending ("ABL") loan that defaulted during the second quarter of 2023. The liquidation process under Chapter 7 bankruptcy and related litigation has delayed final resolution. The current balance of this loan is $6.1 million, down slightly from the linked quarter. Excluding this ABL loan, non-performing assets totaled $22.6 million, or 0.56% of total assets in the current quarter and $17.9 million, or 0.45% of total assets in the linked quarter.
The allowance for credit losses, including the unfunded credit commitments reserve, increased $1.7 million, or 4.6%, primarily due to increases in general reserves driven by deterioration in the economic outlook in our model forecast, changes in qualitative factors, and loan growth partially offset by a decrease in specific reserves. The allowance for credit losses, including unfunded credit commitment reserves, as a percent of total gross loans and leases was 1.18% compared to 1.15% in the prior quarter.
Second Quarter 2025 Compared to Second Quarter 2024
Net interest income increased $3.2 million, or 10.6%, to $33.8 million.
The increase in net interest income primarily reflects an increase in average gross loans and leases, as well as an increase in fees in lieu of interest. Fees in lieu of interest increased to $1.7 million from $1.3 million. Excluding fees in lieu of interest, net interest income increased $2.9 million, or 9.8%.
The yield on average interest-earning assets decreased 27 basis points to 6.65% from 6.92%. Excluding fees in lieu of interest, the yield on average interest-earning assets measured 6.47% compared to 6.76%. This decrease in yield was primarily due to the decrease in short-term market rates partially offset by the reinvestment of cash flows from the securities and fixed-rate loan portfolios.
The rate paid for average interest-bearing core deposits decreased 77 basis points to 3.32% from 4.09%. The rate paid for average total bank funding decreased 31 basis points to 3.08% from 3.39%.
Net interest margin increased two basis points to 3.67% from 3.65%. Adjusted net interest margin increased one basis point to 3.47% from 3.46%.
The Company reported provision for credit losses of $2.7 million, compared to $1.7 million in the second quarter of 2024. See the Provision for Credit Loss breakdown table below for more detail on the components of provision for credit losses expense.
Non-interest income decreased $170,000, or 2.3%, to $7.3 million.
- Private wealth fee income increased $287,000, or 8.3%, to $3.7 million. Private Wealth assets under management and administration measured $3.731 billion at June 30, 2025, up $482.0 million, or 14.8%.
- Loan fee income decreased $402,000 to $424,000 primarily due to a reclassification of certain types of C&I loan fees from non-interest income to interest income.
- Cash surrender value of bank-owned life insurance increased $212,000, or 52.6%, to $615,000 primarily due to the purchase of new policies totaling $24.5 million.
- Service charges on deposits increased $152,000, or 16.0%, to $1.1 million, primarily driven by new core deposit relationships.
- Other fee income decreased $480,000, or 37.6%, to $798,000. The decrease was primarily due to lower returns on the Company’s investments in SBIC funds. Income from SBIC funds was $200,000 in the second quarter, compared to $796,000 in the prior year quarter. Income from SBIC funds varies from period to period based on changes in the realized and unrealized fair value of underlying investments.
Non-interest expense increased $1.1 million, or 4.6%, to $25.0 million. Operating expense increased $1.2 million, or 5.0%, to $25.0 million.
- Compensation expense increased $319,000, or 2.0%, to $16.5 million. The increase in compensation expense was primarily due to an increase in average FTEs and annual merit increases and promotions, partially offset by lower year-to-date incentive compensation accruals. Average FTEs increased 3.7% to 364 in the second quarter of 2025, compared to 351 in the second quarter of 2024.
- FDIC Insurance increased $222,000, or 36.3%, to $834,000 primarily due to an increase in assessment rate and assessable base.
- Data processing expense increased $186,000, or 15.7%, to $1.4 million primarily due to an increase in core processing costs commensurate with loan and deposit account growth, Private Wealth assets under management and administration growth, and various project implementations.
- Computer software expense increased $101,000, or 6.5%, to $1.7 million, primarily due to our commitment to innovative technology to support growth initiatives, enhance productivity, and improve the client experience.
- Marketing expense increased $212,000, or 24.9%, to $1.1 million, primarily due to increased business development efforts and advertising projects to support Company growth goals.
Total period-end loans and leases receivable increased $266.9 million, or 8.9%, to $3.252 billion.
CRE loans increased $171.8 million, or 9.7%, to $1.947 billion, primarily due to increases in all loan categories in the Wisconsin markets.
C&I loans increased $97.5 million, or 8.4%, to $1.259 billion, primarily due to growth across bank markets, floorplan financing, and equipment finance.
Total period-end core deposits grew $223.5 million, or 9.7%, to $2.533 billion, and the average rate paid decreased 59 basis points to 2.75%. The decrease in the average rate paid on core deposits was primarily due to a decrease in short-term market rates. Total average core deposits grew $21.4 million, or 0.9%, to $2.397 billion.
Period-end wholesale funding increased $139.6 million, or 16.3%, to $993.5 million.
- Wholesale deposits increased $196.6 million to $772.1 million, as the Bank utilized more wholesale deposits in lieu of FHLB advances to maintain excess liquidity and to match-fund fixed-rate assets. The average rate paid on wholesale deposits decreased seven basis points to 4.02% and the weighted average original maturity increased to 4.1 years from 4.0 years. Consistent with our balance sheet strategy to use the most efficient and cost-effective source of wholesale funding, the Company has entered into derivative contracts which hedge a portion of the wholesale deposits to reduce the fixed rate funding costs.
- FHLB advances decreased $57.0 million to $221.4 million. The average rate paid on FHLB advances increased 63 basis points to 3.32% and the weighted average original maturity increased to 5.5 years from 5.3 years.
Non-performing assets increased to $28.7 million, or 0.72% of total assets, compared to $19.1 million, or 0.53% of total assets, primarily driven by new non-accrual loans in the C&I transportation and logistics portfolio partially offset by charge-offs of previously reserved equipment finance loans. Excluding the ABL loan described above for which we expect full repayment, non-performing assets totaled $22.6 million, or 0.56% of total assets and $12.6 million, or 0.35% of total assets in the prior year quarter.
The allowance for credit losses, including unfunded commitment reserves, increased $3.3 million to $38.2 million, compared to $35.0 million primarily due to deterioration in the economic outlook in our model forecast and loan growth, partially offset by net charge-offs. The allowance for credit losses as a percent of total gross loans and leases was 1.18%, compared 1.17% in the prior year.
2026 CEO Succession Plan
On May 5, 2025, the Company announced that Corey A. Chambas intends to retire from his role as Chief Executive Officer on May 2, 2026. The Company will name President and Chief Operating Officer David R. Seiler to succeed him as CEO effective the same date.
Earnings Release Supplement and Conference Call
On July 24, 2025, the Company posted an earnings release supplement to its website firstbusiness.bank under the “Investor Relations” tab which will also be furnished to the U.S. Securities and Exchange Commission on July 24, 2025. The information included in the supplement provides an overview of the Company’s recent operating performance, financial condition, and other data relevant to the quarter. The Company intends to use this supplement in connection with its second quarter 2025 earnings call to be held at 1:00 p.m. Central time on July 25, 2025. The conference call can be accessed at 800-549-8228 (289-819-1520 if outside the United States and Canada), using the conference call access code: FBIZ, 54568. Investors may also listen live via webcast at: https://events.q4inc.com/attendee/999971382. A replay of the call will be available through Friday, August 1, 2025, by calling 888-660-6264 or 289-819-1325 for international participants. The webcast archive of the conference call will be available on the Company’s website, ir.firstbusiness.bank.
About First Business Bank
First Business Bank® specializes in Business Banking, including Commercial Banking and Specialty Finance, Private Wealth, and Bank Consulting services, and through its refined focus delivers unmatched expertise, accessibility, and responsiveness. Specialty Finance solutions are delivered through First Business Bank’s wholly owned subsidiary First Business Specialty Finance, LLC®. First Business Bank is a wholly owned subsidiary of First Business Financial Services, Inc®. (Nasdaq: FBIZ). For additional information, visit firstbusiness.bank.
This release may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which reflect First Business Bank’s current views with respect to future events and financial performance. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results, or other developments. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, uncertainties, and other factors that may cause actual results to differ materially from the views, beliefs, and projections expressed in such statements. Such statements are subject to risks and uncertainties, including among other things:
- Adverse changes in the economy or business conditions, either nationally or in our markets including, without limitation, inflation, economic downturn, labor shortages, wage pressures, and the adverse effects of public health events on the global, national, and local economy.
- Uncertainty created by potential federal government actions relating to the authority of regulatory agencies (including bank regulators), international trade policy, and other significant policy matters.
- Competitive pressures among depository and other financial institutions nationally and in the Company’s markets.
- Increases in defaults by borrowers and other delinquencies.
- Management’s ability to manage growth effectively, including the successful expansion of our client support, administrative infrastructure, and internal management systems.
- Fluctuations in interest rates and market prices.
- Changes in legislative or regulatory requirements applicable to the Company and its subsidiaries.
- Changes in tax requirements, including tax rate changes, new tax laws, and revised tax law interpretations.
- Fraud, including client and system failure or breaches of our network security, including the Company’s internet banking activities.
- Failure to comply with the applicable SBA regulations in order to maintain the eligibility of the guaranteed portion of SBA loans.
- Ongoing volatility in the banking sector may result in new legislation, regulations or policy changes that could subject the Company and the Bank to increased government regulation and supervision.
- The proportion of the Company’s deposit account balances that exceed FDIC insurance limits may expose the Bank to enhanced liquidity risk.
For further information about the factors that could affect the Company’s future results, please see the Company’s annual report on Form 10-K for the year ended December 31, 2024, and other filings with the Securities and Exchange Commission.
| CONTACT: | First Business Financial Services, Inc. |
|---|---|
| Brian D. Spielmann | |
| Chief Financial Officer | |
| 608-232-5977 | |
| bspielmann@firstbusiness.bank |
SELECTED FINANCIAL CONDITION DATA
| (Unaudited) | As of | ||||
|---|---|---|---|---|---|
| (in thousands) | June 30,<br>2025 | March 31,<br>2025 | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 |
| Assets | |||||
| Cash and cash equivalents | $123,208 | $170,617 | $157,702 | $131,972 | $81,080 |
| Securities available-for-sale, at fair value | 382,365 | 359,394 | 341,392 | 313,336 | 308,852 |
| Securities held-to-maturity, at amortized cost | 5,714 | 6,590 | 6,741 | 6,907 | 7,082 |
| Loans held for sale | 12,415 | 10,523 | 13,498 | 8,173 | 6,507 |
| Loans and leases receivable | 3,250,925 | 3,184,400 | 3,113,128 | 3,050,079 | 2,985,414 |
| Allowance for credit losses | (36,861) | (35,236) | (35,785) | (33,688) | (33,088) |
| Loans and leases receivable, net | 3,214,064 | 3,149,164 | 3,077,343 | 3,016,391 | 2,952,326 |
| Premises and equipment, net | 5,063 | 5,017 | 5,227 | 5,478 | 6,381 |
| Repossessed assets | 31 | 36 | 51 | 56 | 54 |
| Right-of-use assets | 5,713 | 5,439 | 5,702 | 5,789 | 6,041 |
| Bank-owned life insurance | 82,761 | 57,647 | 57,210 | 56,767 | 56,351 |
| Federal Home Loan Bank stock, at cost | 10,027 | 10,434 | 11,616 | 12,775 | 11,901 |
| Goodwill and other intangible assets | 12,049 | 12,058 | 11,912 | 11,834 | 11,841 |
| Derivatives | 40,814 | 48,405 | 65,762 | 42,539 | 70,773 |
| Accrued interest receivable and other assets | 108,501 | 109,555 | 99,059 | 103,707 | 97,872 |
| Total assets | $4,002,725 | $3,944,879 | $3,853,215 | $3,715,724 | $3,617,061 |
| Liabilities and Stockholders’ Equity | |||||
| Core deposits | $2,533,099 | $2,462,695 | $2,396,429 | $2,382,730 | $2,309,635 |
| Wholesale deposits | 772,123 | 780,348 | 710,711 | 587,217 | 575,548 |
| Total deposits | 3,305,222 | 3,243,043 | 3,107,140 | 2,969,947 | 2,885,183 |
| Federal Home Loan Bank advances and<br> other borrowings | 276,131 | 286,590 | 320,049 | 349,109 | 327,855 |
| Lease liabilities | 7,887 | 7,604 | 7,926 | 8,054 | 8,361 |
| Derivatives | 41,228 | 45,612 | 57,068 | 45,399 | 61,821 |
| Accrued interest payable and other liabilities | 27,462 | 25,967 | 32,443 | 31,233 | 28,671 |
| Total liabilities | 3,657,930 | 3,608,816 | 3,524,626 | 3,403,742 | 3,311,891 |
| Total stockholders’ equity | 344,795 | 336,063 | 328,589 | 311,982 | 305,170 |
| Total liabilities and stockholders’ equity | $4,002,725 | $3,944,879 | $3,853,215 | $3,715,724 | $3,617,061 |
STATEMENTS OF INCOME
| (Unaudited) | As of and for the Three Months Ended | As of and for the Six Months Ended | |||||
|---|---|---|---|---|---|---|---|
| (Dollars in thousands, except per share amounts) | June 30,<br>2025 | March 31,<br>2025 | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 | June 30,<br>2025 | June 30,<br>2024 |
| Total interest income | $61,282 | $59,530 | $60,110 | $59,327 | $57,910 | $120,812 | $113,693 |
| Total interest expense | 27,498 | 26,272 | 26,962 | 28,320 | 27,370 | 53,770 | 53,642 |
| Net interest income | 33,784 | 33,258 | 33,148 | 31,007 | 30,540 | 67,042 | 60,051 |
| Provision for credit losses | 2,701 | 2,659 | 2,701 | 2,087 | 1,713 | 5,360 | 4,039 |
| Net interest income after provision for credit losses | 31,083 | 30,599 | 30,447 | 28,920 | 28,827 | 61,682 | 56,012 |
| Private wealth management service fees | 3,748 | 3,492 | 3,426 | 3,264 | 3,461 | 7,240 | 6,571 |
| Gain on sale of SBA loans | 397 | 963 | 938 | 460 | 349 | 1,360 | 544 |
| Service charges on deposits | 1,103 | 1,048 | 960 | 920 | 951 | 2,152 | 1,890 |
| Loan fees | 424 | 388 | 914 | 812 | 826 | 812 | 1,674 |
| Increase in cash surrender value of bank owned life insurance | 615 | 437 | 418 | 416 | 403 | 1,051 | 815 |
| Loss on sale of securities | — | — | — | 0 | — | — | (8) |
| Swap fees | 170 | 113 | 588 | 460 | 157 | 283 | 355 |
| Other non-interest income | 798 | 1,138 | 761 | 732 | 1,278 | 1,936 | 2,341 |
| Total non-interest income | 7,255 | 7,579 | 8,005 | 7,064 | 7,425 | 14,834 | 14,182 |
| Compensation | 16,534 | 16,747 | 15,535 | 15,198 | 16,215 | 33,281 | 32,372 |
| Occupancy | 564 | 590 | 588 | 585 | 593 | 1,155 | 1,200 |
| Professional fees | 1,487 | 1,459 | 1,323 | 1,305 | 1,472 | 2,946 | 3,043 |
| Data processing | 1,368 | 1,082 | 1,647 | 1,045 | 1,182 | 2,450 | 2,200 |
| Marketing | 1,062 | 968 | 928 | 922 | 850 | 2,030 | 1,669 |
| Equipment | 335 | 376 | 301 | 333 | 335 | 711 | 680 |
| Computer software | 1,656 | 1,603 | 1,585 | 1,608 | 1,555 | 3,259 | 2,973 |
| FDIC insurance | 834 | 780 | 728 | 810 | 612 | 1,614 | 1,222 |
| Other non-interest expense | 1,128 | 1,114 | 517 | 1,301 | 1,065 | 2,241 | 1,863 |
| Total non-interest expense | 24,968 | 24,719 | 23,152 | 23,107 | 23,879 | 49,687 | 47,222 |
| Income before income tax expense | 13,370 | 13,459 | 15,300 | 12,877 | 12,373 | 26,829 | 22,972 |
| Income tax expense | 1,948 | 2,288 | 885 | 2,351 | 1,917 | 4,236 | 3,668 |
| Net income | $11,422 | $11,171 | $14,415 | $10,526 | $10,456 | $22,593 | $19,304 |
| Preferred stock dividends | 219 | 219 | 219 | 218 | 219 | 438 | 438 |
| Net income available to common shareholders | $11,203 | $10,952 | $14,196 | $10,308 | $10,237 | $22,155 | $18,866 |
| Per common share: | |||||||
| Basic earnings | $1.35 | $1.32 | $1.71 | $1.24 | $1.23 | $2.66 | $2.26 |
| Diluted earnings | $1.35 | $1.32 | $1.71 | $1.24 | $1.23 | $2.66 | $2.26 |
| Dividends declared | $0.29 | $0.29 | $0.25 | $0.25 | $0.25 | $0.58 | $0.50 |
| Book value | $39.98 | $39.04 | $38.17 | $36.17 | $35.35 | $39.98 | $35.35 |
| Tangible book value | $38.54 | $37.58 | $36.74 | $34.74 | $33.92 | $38.54 | $33.92 |
| Weighted-average common shares<br> outstanding(1) | 8,141,159 | 8,130,743 | 8,107,308 | 8,111,215 | 8,113,246 | 8,149,600 | 8,154,445 |
| Weighted-average diluted common<br> shares outstanding(1) | 8,141,159 | 8,130,743 | 8,107,308 | 8,111,215 | 8,113,246 | 8,149,600 | 8,154,445 |
- Excluding participating securities.
NET INTEREST INCOME ANALYSIS
| (Unaudited) | For the Three Months Ended | ||
|---|---|---|---|
| (Dollars in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 |
| AverageBalance | AverageBalance | AverageBalance | |
| Interest-earning assets | |||
| Commercial real estate and<br> other mortgage loans(1) | 1,932,593 | 1,925,661 | 1,765,743 |
| Commercial and industrial<br> loans(1) | 1,257,296 | 1,212,656 | 1,146,312 |
| Consumer and other loans(1) | 49,951 | 47,479 | 50,872 |
| Total loans and leases<br> receivable(1) | 3,239,840 | 3,185,796 | 2,962,927 |
| Mortgage-related securities(2) | 334,159 | 308,656 | 261,828 |
| Other investment securities(3) | 46,416 | 43,145 | 60,780 |
| FHLB stock | 12,852 | 13,623 | 12,656 |
| Short-term investments | 52,772 | 51,072 | 48,836 |
| Total interest-earning assets | 3,686,039 | 3,602,292 | 3,347,027 |
| Non-interest-earning assets | 242,048 | 240,076 | 245,188 |
| Total assets | 3,928,087 | 3,842,368 | 3,592,215 |
| Interest-bearing liabilities | |||
| Transaction accounts | 985,606 | 927,250 | 880,752 |
| Money market | 821,845 | 831,598 | 815,846 |
| Certificates of deposit | 178,643 | 189,547 | 241,535 |
| Wholesale deposits | 773,750 | 694,431 | 476,149 |
| Total interest-bearing<br> deposits | 2,759,844 | 2,642,826 | 2,414,282 |
| FHLB advances | 284,428 | 305,549 | 294,043 |
| Other borrowings | 54,733 | 54,708 | 49,481 |
| Total interest-bearing<br> liabilities | 3,099,005 | 3,003,083 | 2,757,806 |
| Non-interest-bearing demand<br> deposit accounts | 410,423 | 414,499 | 436,968 |
| Other non-interest-bearing<br> liabilities | 78,388 | 90,683 | 95,484 |
| Total liabilities | 3,587,816 | 3,508,265 | 3,290,258 |
| Stockholders’ equity | 340,271 | 334,103 | 301,957 |
| Total liabilities and<br> stockholders’ equity | 3,928,087 | 3,842,368 | 3,592,215 |
| Net interest income | |||
| Interest rate spread | |||
| Net interest-earning assets | 587,034 | 599,209 | 589,221 |
| Net interest margin |
All values are in US Dollars.
- The average balances of loans and leases include non-accrual loans and leases and loans held for sale. Interest income related to non-accrual loans and leases is recognized when collected. Interest income includes net loan fees collected in lieu of interest.
- Includes amortized cost basis of assets available for sale and held to maturity.
- Yields on tax-exempt municipal obligations are not presented on a tax-equivalent basis in this table.
- Represents annualized yields/rates.
PROVISION FOR CREDIT LOSS COMPOSITION
| (Unaudited) | For the Three Months Ended | For the Six Months Ended | |||||
|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | June 30,<br>2025 | March 31,<br>2025 | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 | June 30,<br>2025 | June 30,<br>2024 |
| Change due to qualitative factor changes | $590 | $(355) | $(460) | $(444) | $496 | $235 | $1,237 |
| Change due to quantitative factor<br> changes | 746 | 1,560 | (598) | (330) | 150 | 2,306 | (49) |
| Charge-offs | 1,338 | 3,810 | 1,132 | 1,619 | 1,583 | 5,148 | 2,504 |
| Recoveries | (332) | (398) | (190) | (91) | (191) | (730) | (418) |
| Change in reserves on individually<br> evaluated loans, net | (247) | (2,495) | 2,579 | 757 | (1,037) | (2,742) | (409) |
| Change due to loan growth, net | 536 | 741 | 577 | 616 | 680 | 1,277 | 1,035 |
| Change in unfunded commitment<br> reserves | 70 | (204) | (339) | (40) | 32 | (134) | 139 |
| Total provision for credit losses | $2,701 | $2,659 | $2,701 | $2,087 | $1,713 | $5,360 | $4,039 |
ALLOWANCE FOR CREDIT LOSS COMPOSITION
| As of | |||
|---|---|---|---|
| June 30,2025 | March 31, 2025 | December 31,2024 | |
| (In Thousands) | (In Thousands) | (In Thousands) | |
| Allowance for credit losses: | |||
| Loans collectively evaluated | 30,685 | 28,813 | 26,867 |
| Loans individually evaluated | 6,176 | 6,423 | 8,918 |
| Unfunded commitments reserve | 1,349 | 1,279 | 1,483 |
| Total | 38,210 | 36,515 | 37,268 |
| Loans and lease receivables: | 3,250,925 | 3,184,400 | 3,113,128 |
All values are in US Dollars.
PERFORMANCE RATIOS
| For the Three Months Ended | For the Six Months Ended | ||||||
|---|---|---|---|---|---|---|---|
| (Unaudited) | June 30,<br>2025 | March 31,<br>2025 | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 | June 30,<br>2025 | June 30,<br>2024 |
| Return on average assets (annualized) | 1.14% | 1.14% | 1.52% | 1.13% | 1.14% | 1.14% | 1.06% |
| Return on average tangible common equity (annualized) | 14.17% | 14.13% | 19.21% | 14.40% | 14.73% | 14.15% | 13.77% |
| Efficiency ratio | 60.97% | 60.28% | 56.94% | 59.44% | 62.75% | 60.63% | 63.25% |
| Interest rate spread | 3.10% | 3.11% | 3.11% | 2.92% | 2.95% | 3.11% | 2.91% |
| Net interest margin | 3.67% | 3.69% | 3.77% | 3.64% | 3.65% | 3.68% | 3.62% |
| Average interest-earning assets to average interest-bearing liabilities | 118.94% | 119.95% | 121.59% | 121.84% | 121.37% | 119.44% | 121.75% |
ASSET QUALITY RATIOS
| (Unaudited) | As of | ||||
|---|---|---|---|---|---|
| (Dollars in thousands) | June 30,<br>2025 | March 31,<br>2025 | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 |
| Non-accrual loans and leases | $28,633 | $24,056 | $28,367 | $19,364 | $18,999 |
| Repossessed assets | 31 | 36 | 51 | 56 | 54 |
| Total non-performing assets | $28,664 | $24,092 | $28,418 | $19,420 | $19,053 |
| Non-accrual loans and leases as a<br> percent of total gross loans and leases | 0.88% | 0.76% | 0.91% | 0.63% | 0.64% |
| Non-performing assets as a percent of<br> total gross loans and leases plus<br> repossessed assets | 0.88% | 0.76% | 0.91% | 0.64% | 0.64% |
| Non-performing assets as a percent of<br> total assets | 0.72% | 0.61% | 0.74% | 0.52% | 0.53% |
| Allowance for credit losses as a percent<br> of total gross loans and leases | 1.18% | 1.15% | 1.20% | 1.16% | 1.17% |
| Allowance for credit losses as a percent<br> of non-accrual loans and leases | 133.45% | 151.79% | 131.38% | 183.38% | 183.96% |
NET CHARGE-OFFS (RECOVERIES)
| (Unaudited) | For the Three Months Ended | For the Six Months Ended | |||||
|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | June 30,<br>2025 | March 31,<br>2025 | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 | June 30,<br>2025 | June 30,<br>2024 |
| Charge-offs | $1,338 | $3,810 | $1,132 | $1,619 | $1,583 | $5,148 | $2,504 |
| Recoveries | (332) | (398) | (190) | (91) | (191) | (730) | (418) |
| Net charge-offs (recoveries) | $1,006 | $3,412 | $942 | $1,528 | $1,392 | $4,418 | $2,086 |
| Net charge-offs (recoveries) as a percent of average gross loans and leases (annualized) | 0.12% | 0.43% | 0.12% | 0.20% | 0.19% | 0.28% | 0.14% |
CAPITAL RATIOS
| As of and for the Three Months Ended | |||||
|---|---|---|---|---|---|
| (Unaudited) | June 30,<br>2025 | March 31,<br>2025 | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 |
| Total capital to risk-weighted assets | 12.25% | 12.20% | 12.08% | 11.72% | 11.45% |
| Tier I capital to risk-weighted assets | 9.66% | 9.60% | 9.45% | 9.11% | 8.99% |
| Common equity tier I capital to risk-<br> weighted assets | 9.33% | 9.26% | 9.10% | 8.76% | 8.64% |
| Tier I capital to adjusted assets | 8.82% | 8.77% | 8.78% | 8.68% | 8.51% |
| Tangible common equity to tangible<br> assets | 8.04% | 7.93% | 7.93% | 7.78% | 7.80% |
LOAN AND LEASE RECEIVABLE COMPOSITION
| (Unaudited) | As of | ||||
|---|---|---|---|---|---|
| (in thousands) | June 30,<br>2025 | March 31,<br>2025 | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 |
| Commercial real estate: | |||||
| Commercial real estate - owner occupied | $262,988 | $258,050 | $273,397 | $259,532 | $258,636 |
| Commercial real estate - non-owner occupied | 846,990 | 838,634 | 845,298 | 768,195 | 777,704 |
| Construction | 218,840 | 215,613 | 221,086 | 266,762 | 229,181 |
| Multi-family | 573,208 | 549,220 | 530,853 | 494,954 | 470,176 |
| 1-4 family | 45,171 | 48,450 | 46,496 | 39,933 | 39,680 |
| Total commercial real estate | 1,947,197 | 1,909,967 | 1,917,130 | 1,829,376 | 1,775,377 |
| Commercial and industrial | 1,259,171 | 1,229,098 | 1,151,720 | 1,174,295 | 1,161,711 |
| Consumer and other | 45,744 | 46,190 | 45,000 | 46,610 | 48,145 |
| Total gross loans and leases receivable | 3,252,112 | 3,185,255 | 3,113,850 | 3,050,281 | 2,985,233 |
| Less: | |||||
| Allowance for credit losses | 36,861 | 35,236 | 35,785 | 33,688 | 33,088 |
| Deferred loan fees | 1,187 | 855 | 722 | 202 | (181) |
| Loans and leases receivable, net | $3,214,064 | $3,149,164 | $3,077,343 | $3,016,391 | $2,952,326 |
DEPOSIT COMPOSITION
| (Unaudited) | As of | ||||
|---|---|---|---|---|---|
| (in thousands) | June 30,<br>2025 | March 31,<br>2025 | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 |
| Non-interest-bearing transaction accounts | $396,448 | $433,201 | $436,111 | $428,012 | $406,804 |
| Interest-bearing transaction accounts | 1,047,434 | 1,015,846 | 965,637 | 930,252 | 841,146 |
| Money market accounts | 833,684 | 831,897 | 809,695 | 817,129 | 837,569 |
| Certificates of deposit | 255,533 | 181,751 | 184,986 | 207,337 | 224,116 |
| Wholesale deposits | 772,123 | 780,348 | 710,711 | 587,217 | 575,548 |
| Total deposits | $3,305,222 | $3,243,043 | $3,107,140 | $2,969,947 | $2,885,183 |
| Uninsured deposits | $1,069,509 | $1,055,347 | $980,278 | $1,088,496 | $1,011,977 |
| Less: uninsured deposits collateralized by pledged assets | 67,990 | 9,344 | 6,864 | 10,755 | 34,810 |
| Total uninsured, net of collateralized deposits | $1,001,519 | $1,046,003 | $973,414 | $1,077,741 | $977,167 |
| % of total deposits | 30.3% | 32.3% | 31.3% | 36.3% | 33.9% |
SOURCES OF LIQUIDITY
| (Unaudited) | As of | ||||
|---|---|---|---|---|---|
| (in thousands) | June 30,<br>2025 | March 31,<br>2025 | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 |
| Short-term investments | $72,520 | $136,033 | $128,207 | $86,670 | $54,680 |
| Collateral value of unencumbered pledged loans | 893,499 | 973,494 | 444,453 | 397,852 | 401,602 |
| Market value of unencumbered securities | 347,196 | 324,365 | 310,125 | 279,191 | 289,104 |
| Readily accessible liquidity | 1,313,215 | 1,433,892 | 882,785 | 763,713 | 745,386 |
| Fed fund lines | 45,000 | 45,000 | 45,000 | 45,000 | 45,000 |
| Excess brokered CD capacity(1) | 645,843 | 477,468 | 981,463 | 1,102,767 | 1,051,678 |
| Total liquidity | $2,004,058 | $1,956,360 | $1,909,248 | $1,911,480 | $1,842,064 |
| Total uninsured, net of collateralized deposits | $1,001,519 | $1,046,003 | $973,414 | $1,077,741 | $977,167 |
- Bank internal policy limits brokered CDs to 50% of total bank funding when combined with value of unencumbered pledged loans.
PRIVATE WEALTH OFF-BALANCE SHEET COMPOSITION
| (Unaudited) | As of | ||||
|---|---|---|---|---|---|
| (in thousands) | June 30,<br>2025 | March 31,<br>2025 | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 |
| Trust assets under management | $3,461,659 | $3,184,197 | $3,160,449 | $3,145,789 | $3,008,897 |
| Trust assets under administration | 268,996 | 240,366 | 258,255 | 252,152 | 239,766 |
| Total trust assets | $3,730,655 | $3,424,563 | $3,418,704 | $3,397,941 | $3,248,663 |
NON-GAAP RECONCILIATIONS
Certain financial information provided in this release is determined by methods other than in accordance with generally accepted accounting principles (United States) (“GAAP”). Although the Company’s management believes that these non-GAAP financial measures provide a greater understanding of its business, these measures are not necessarily comparable to similar measures that may be presented by other companies.
TANGIBLE BOOK VALUE
“Tangible book value per share” is a non-GAAP measure representing tangible common equity divided by total common shares outstanding. “Tangible common equity” itself is a non-GAAP measure representing common stockholders’ equity reduced by intangible assets, if any. The Company’s management believes that this measure is important to many investors in the marketplace who are interested in period-to-period changes in book value per common share exclusive of changes in intangible assets. The information provided below reconciles tangible book value per share and tangible common equity to their most comparable GAAP measures.
| (Unaudited) | As of | ||||
|---|---|---|---|---|---|
| (Dollars in thousands, except per share amounts) | June 30,<br>2025 | March 31,<br>2025 | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 |
| Common stockholders’ equity | $332,803 | $324,071 | $316,597 | $299,990 | $293,178 |
| Less: Goodwill and other intangible assets | (12,049) | (12,058) | (11,912) | (11,834) | (11,841) |
| Tangible common equity | $320,754 | $312,013 | $304,685 | $288,156 | $281,337 |
| Common shares outstanding | 8,323,470 | 8,301,967 | 8,293,928 | 8,295,017 | 8,294,589 |
| Book value per share | $39.98 | $39.04 | $38.17 | $36.17 | $35.35 |
| Tangible book value per share | $38.54 | $37.58 | $36.74 | $34.74 | $33.92 |
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS
“Tangible common equity to tangible assets” (“TCE”) is defined as the ratio of common stockholders’ equity reduced by intangible assets, if any, divided by total assets reduced by intangible assets, if any. Adjusted TCE ratio is defined as TCE adjusted for net fair value adjustments of financial assets and liabilities. For more information on fair value adjustments please refer to Note 19 - Fair Value Disclosures in the annual report on Form 10-K for the year ended December 31, 2024. The Company’s management believes that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in common equity and total assets, each exclusive of changes in intangible assets. The information below reconciles tangible common equity and tangible assets to their most comparable GAAP measures.
| (Unaudited) | As of | ||||
|---|---|---|---|---|---|
| (Dollars in thousands) | June 30,<br>2025 | March 31,<br>2025 | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 |
| Common stockholders’ equity | $332,803 | $324,071 | $316,597 | $299,990 | $293,178 |
| Less: Goodwill and other intangible assets | (12,049) | (12,058) | (11,912) | (11,834) | (11,841) |
| Tangible common equity (a) | $320,754 | $312,013 | $304,685 | $288,156 | $281,337 |
| Total assets | $4,002,725 | $3,944,879 | $3,853,215 | $3,715,724 | $3,617,061 |
| Less: Goodwill and other intangible assets | (12,049) | (12,058) | (11,912) | (11,834) | (11,841) |
| Tangible assets (b) | $3,990,676 | $3,932,821 | $3,841,303 | $3,703,890 | $3,605,220 |
| Tangible common equity to tangible assets | 8.04% | 7.93% | 7.93% | 7.78% | 7.80% |
| Fair Value Adjustments: | |||||
| Financial assets - MTM (c) | $(30,996) | $(20,528) | $(26,580) | $(17,615) | $(17,432) |
| Financial liabilities - MTM (d) | $2,563 | $5,460 | $5,946 | $8,358 | $9,032 |
| Net MTM, after-tax e = (c-d)*(1-21%) | $(22,462) | $(11,904) | $(16,301) | $(7,313) | $(6,636) |
| Adjusted tangible equity f = (a-e) | $298,292 | $300,109 | $288,384 | $280,843 | $274,701 |
| Adjusted tangible assets g = (b-c) | $3,959,680 | $3,912,293 | $3,814,723 | $3,686,275 | $3,587,788 |
| Adjusted TCE ratio (f/g) | 7.53% | 7.67% | 7.56% | 7.62% | 7.66% |
EFFICIENCY RATIO & PRE-TAX, PRE-PROVISION ADJUSTED EARNINGS
“Efficiency ratio” is a non-GAAP measure representing non-interest expense excluding the effects of the SBA recourse provision, impairment of tax credit investments, losses or gains on repossessed assets, amortization of other intangible assets and other discrete items, if any, divided by operating revenue, which is equal to net interest income plus non-interest income less realized gains or losses on securities, if any. “Pre-tax, pre-provision adjusted earnings” is defined as operating revenue less operating expense. In the judgment of the Company’s management, the adjustments made to non-interest expense and non-interest income allow investors and analysts to better assess the Company’s operating expenses in relation to its core operating revenue by removing the volatility that is associated with certain one-time items and other discrete items. The information provided below reconciles the efficiency ratio and pre-tax, pre-provision adjusted earnings to its most comparable GAAP measure.
| (Unaudited) | For the Three Months Ended | For the Six Months Ended | |||||
|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | June 30,<br>2025 | March 31,<br>2025 | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 | June 30,<br>2025 | June 30,<br>2024 |
| Total non-interest expense | $24,968 | $24,719 | $23,152 | $23,107 | $23,879 | $49,687 | $47,222 |
| Less: | |||||||
| Net (gain) loss on repossessed assets | 4 | (8) | 5 | 11 | 65 | (4) | 151 |
| Impairment of tax credit investments | — | 110 | 400 | — | — | 110 | — |
| SBA recourse provision (benefit) | (59) | 0 | (687) | 466 | (9) | (59) | 117 |
| Total operating expense (a) | $25,023 | $24,617 | $23,434 | $22,630 | $23,823 | $49,640 | $46,954 |
| Net interest income | $33,784 | $33,258 | $33,148 | $31,007 | $30,540 | $67,042 | $60,051 |
| Total non-interest income | 7,255 | 7,579 | 8,005 | 7,064 | 7,425 | 14,834 | 14,182 |
| Less: | |||||||
| Net loss on sale of securities | — | — | — | — | — | — | (8) |
| Adjusted non-interest income | 7,255 | 7,579 | 8,005 | 7,064 | 7,425 | 14,834 | 14,190 |
| Total operating revenue (b) | $41,039 | $40,837 | $41,153 | $38,071 | $37,965 | $81,876 | $74,241 |
| Efficiency ratio | 60.97% | 60.28% | 56.94% | 59.44% | 62.75% | 60.63% | 63.25% |
| Pre-tax, pre-provision adjusted earnings (b - a) | $16,016 | $16,220 | $17,719 | $15,441 | $14,142 | $32,236 | $27,287 |
| Average total assets | $3,928,087 | $3,842,368 | $3,746,608 | $3,636,887 | $3,592,215 | $3,885,465 | $3,560,078 |
ADJUSTED NET INTEREST MARGIN
“Adjusted Net Interest Margin” is a non-GAAP measure representing net interest income excluding the fees in lieu of interest and other recurring, but volatile, components of net interest margin divided by average interest-earning assets less other recurring, but volatile, components of average interest-earning assets. Fees in lieu of interest are defined as prepayment fees, asset-based loan fees, non-accrual interest, and loan fee amortization. In the judgment of the Company’s management, the adjustments made to net interest income allow investors and analysts to better assess the Company’s net interest income in relation to its core client-facing loan and deposit rate changes by removing the volatility that is associated with these recurring but volatile components. The information provided below reconciles the net interest margin to its most comparable GAAP measure.
| (Unaudited) | For the Three Months Ended | For the Six Months Ended | |||||
|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | June 30,<br>2025 | March 31,<br>2025 | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 | June 30,<br>2025 | June 30,<br>2024 |
| Interest income | $61,282 | $59,530 | $60,110 | $59,327 | $57,910 | $120,812 | $113,693 |
| Interest expense | 27,498 | 26,272 | 26,962 | 28,320 | 27,370 | 53,770 | 53,642 |
| Net interest income (a) | 33,784 | 33,258 | 33,148 | 31,007 | 30,540 | 67,042 | 60,051 |
| Less: | |||||||
| Fees in lieu of interest | 1,673 | 2,052 | 2,359 | 1,002 | 1,306 | 3,725 | 2,099 |
| FRB interest income and FHLB dividend income | 874 | 848 | 1,062 | 841 | 959 | 1,721 | 2,395 |
| Adjusted net interest income (b) | $31,237 | $30,358 | $29,727 | $29,164 | $28,275 | $61,596 | $55,557 |
| Average interest-earning assets (c) | $3,686,039 | $3,602,292 | $3,516,390 | $3,405,534 | $3,347,027 | $3,644,397 | $3,320,872 |
| Less: | |||||||
| Average FRB cash and FHLB stock | 65,212 | 63,971 | 76,576 | 52,603 | 61,082 | 64,595 | 79,059 |
| Average non-accrual loans and leases | 24,833 | 27,228 | 19,077 | 18,954 | 19,807 | 26,024 | 20,172 |
| Adjusted average interest-earning assets (d) | $3,595,994 | $3,511,093 | $3,420,737 | $3,333,977 | $3,266,138 | $3,553,778 | $3,221,641 |
| Net interest margin (a / c) | 3.67% | 3.69% | 3.77% | 3.64% | 3.65% | 3.68% | 3.62% |
| Adjusted net interest margin (b / d) | 3.47% | 3.46% | 3.48% | 3.50% | 3.46% | 3.47% | 3.45% |
Earnings Release Supplement First Quarter 2025
When used in this presentation, and in any other oral statements made with the approval of an authorized executive officer, the words or phrases “may,” “could,” “should,” “hope,” “might,” “believe,” “expect,” “plan,” “assume,” “intend,” “estimate,” “anticipate,” “project,” “likely,” or similar expressions are intended to identify “forward‐looking statements” within the meaning of such term in the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties, including among other things: (i) Adverse changes in the economy or business conditions, either nationally or in our markets, including, without limitation, inflation, economic downturn, labor shortages, wage pressures, and the adverse effects of public health events on the global, national, and local economy; (ii) Uncertainty created by potential federal government actions relating to the authority of regulatory agencies (including bank regulators), international trade policy, and other significant matters;(iii) Competitive pressures among depository and other financial institutions nationally and in our markets; (iv) Increases in defaults by borrowers and other delinquencies; (v) Our ability to manage growth effectively, including the successful expansion of our client support, administrative infrastructure, and internal management systems; (vi) Fluctuations in interest rates and market prices; (vii) Changes in legislative or regulatory requirements applicable to us and our subsidiaries; (viii) Changes in tax requirements, including tax rate changes, new tax laws, and revised tax law interpretations; (ix) Fraud, including client and system failure or breaches of our network security, including our internet banking activities; (x) Failure to comply with the applicable SBA regulations in order to maintain the eligibility of the guaranteed portions of SBA loans. (xi) Ongoing volatility in the banking sector may result in new legislation, regulations or policy changes that could subject the Corporation and the Bank to increased government regulation and supervision, (xii) the proportion of the Corporation’s deposit account balances that exceed FDIC insurance limits may expose the Bank to enhanced liquidity risk, and (xiii) The Corporation may be subject to increases in FDIC insurance assessments. These risks could cause actual results to differ materially from what FBIZ has anticipated or projected. These risks could cause actual results to differ materially from what we have anticipated or projected. These risk factors and uncertainties should be carefully considered by our shareholders and potential investors. For further information about the factors that could affect the Corporation’s future results, please see the Corporation’s annual report on Form 10‐K for the year ended December 31, 2024 and other filings with the Securities and Exchange Commission. Investors should not place undue reliance on any such forward‐looking statement, which speaks only as of the date on which it was made. The factors described within the filings could affect our financial performance and could cause actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods. Where any such forward‐looking statement includes a statement of the assumptions or bases underlying such forward‐looking statement, FBIZ cautions that, while its management believes such assumptions or bases are reasonable and are made in good faith, assumed facts or bases can vary from actual results, and the differences between assumed facts or bases and actual results can be material, depending on the circumstances. Where, in any forward‐looking statement, an expectation or belief is expressed as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will be achieved or accomplished. FBIZ does not intend to, and specifically disclaims any obligation to, update any forward‐looking statements. Forward-Looking Statements
Highlights Q1 2025 14% Growth in Tangible Book Value Robust loan and deposit growth and stable asset quality drove 9% annualized growth in TBV compared to the linked quarter and 14% compared to the prior year quarter Private Wealth $3.4 B in AUM&A Private Wealth Management assets under management and administration grew to a record $3.425 billion. PWM fee income totaled $3.5 million for Q1 2025, up 12.2% over Q1 2024. Loans +9% Consistent loan growth across the Company. Loans grew 9.2% annualized from the linked quarter and 9.4% from Q1 2024. Core Deposits +11% Core deposits grew 11.1% annualized from the linked quarter and 7.2% from Q1 2024. NIM 3.69% Match funding strategy and pricing discipline produced a strong net interest margin of 3.69%, compared to 3.77% for the linked quarter and 3.58% for the prior year quarter. Asset Quality NPAs ↓ 15% NPAs declined 15.2% from the linked quarter, and NPAs / Total Assets of 0.76% decreased from 0.91% for Q4 2024. The allowance coverage ratio improved to 151.8% from 131.4% at 12/31/24. Revenue YOY +13% Operating revenue increase driven by strong loan growth, NIM, and a 12% increase in fee income.
Relationship Banking Key to Success Deposit‐centric sales strategy led by treasury management sales teams located in all bank markets with direct production and outside calling goals Bankers trained and incented to fund their loan production with deposit growth goals Higher-yielding C&I lending leads loan growth Goal is 10% annual deposit and loan growth Niche lending businesses provide support in a weaker economy (asset-based lending & accounts receivable financing are counter-cyclical) core deposit growth supports loan growth +11% LQA +7% YOY +9% LQA +9% YOY
Net Interest Margin Components FILOI defined as fees in lieu of interest which includes prepayment fees, asset-based loan fees, non-accrual interest, late fees, and loan fee amortization Wholesale funding defined as brokered CDs and non‐reciprocal interest‐bearing transaction accounts plus FHLB advances. 3. Recurring, variable components is defined as fees in lieu of interest, FRB interest income, and FHLB dividend income. "Adjusted Net Interest Margin" is a non‐GAAP measurement. Refer to the non-GAAP reconciliation schedule section of the Company’s Q1 earnings release. Note: Peer group defined as publicly‐traded bank with total assets between $1.75 billion and $7 billion. Peer data not yet available for 1Q25. Strong Balance Sheet SUPPORTS Resilient NIM
Disciplined Interest Rate Risk Management FLOATING RATE PORTFOLIO Floating portfolio is predominantly indexed to SOFR, which aligns with the Bank’s SOFR‐indexed and managed rate non‐maturity deposit portfolio. 56% as of 3/31/25 As of 3/31/25: METHODICAL APPROACH Generally individually match‐fund loans with maturities over 5 years and amounts greater than $5MM Portfolio match‐funding in various terms against the fixed‐rate loan portfolio with maturities under 5 years and amounts less than $5MM. ~$10‐$25 million of monthly wholesale funding maturities to effectively manage the liquidity requirements of the match‐funding strategy. Loans Deposits SOFR = $1.348 B SOFR = $691 MM Prime = $421.0 MM Managed rate, non‐maturity = $1.010 B FIXED RATE PORTFOLIO Wholesale funding used to match maturities and cash flows on long‐ term fixed rate loans. This locks in interest rate spread and maintains greater stability in net interest margin. 44% as of 3/31/25
Operating Revenue Highlights Continued strong revenue supported by: Robust loan and deposit growth Strong and stable net interest margin Diverse sources of non‐interest income, including service fees from our Private Wealth Management business, which comprises 46% of total non‐interest income Strategic investments drive growth while maintaining positive long‐term operating leverage 1. Operating Revenue and Adjusted Net Interest Income are non-GAAP measurements. Refer to the non-GAAP reconciliation schedule section of the Company’s Q1 earnings release.. 2."Fees in Lieu of Interest" is defined as prepayment fees, asset-based loan fees, non-accrual interest, late fees, and loan fee amortization. Balanced and Steady Growth DIVERSIFIED REVENUE SOURCES 2 Operating Revenue1 +13% YOY Note: Net interest income is the sum of "Adjusted Net Interest Income", “Other Interest Income”, and "Fees in Lieu of Interest". Non-interest income is the sum of "Private Wealth Management Service Fees", "Other Fee Income", "Service Charges on Deposits", "SBA Gains", “Loan Fees” and "Swap Fees". 1
Solid Asset Quality NON-PERFORMING ASSETS/TOTAL ASSETS REMAIN WELL MANAGED 1. For more detailed definitions of credit quality categories, see the Company’s Annual Report on Form 10-K filed with the SEC on February 26, 2025. As of 3/31/25, 94% of the loan portfolio was classified in category I(1) and 99% of loans were current
Robust Liquidity with Stable Deposit Base Stable Core Deposit Base As of 3/31/25 Substantial Liquidity Source 3/31/2025 3/31/2024 Short-term investments $136,033 $46,984 Collateral value of unencumbered pledged loans 501,268 340,639 Market value of unencumbered securities 324,365 288,965 Readily accessible liquidity $961,666 $676,588 Fed fund lines 45,000 45,000 Excess brokered CD capacity (1) 948,949 1,166,661 Total Liquidity $1,955,615 $1,888,249 Uninsured Deposits Collateralized Public Funds FDIC Insured Approx. 68% of deposits are insured or collateralized 1. Bank internal policy limits brokered CDs to 50% of total bank funding when combined with FHLB advances. Dollars in thousands
Robust Capital Base Strong Capital Ratios (%) +9% LQ +14% YOY STRONG EARNINGS GENERATE CAPITAL FOR GROWTH 1. “Tangible Book Value Per Share" is a non‐GAAP measurement. Refer to the non-GAAP reconciliation schedule section of the Company’s Q1 earnings release.
Deliver above-average total shareholder return compared to peer median 1Q’25 metrics reflect growth compared to 1Q’24 ROATCE and TBV Growth includes the impact of a $1.7 million benefit from a partial release of a state deferred tax valuation allowance recognized in Q4 2024. Revenue growth muted in 2024 due to exceptional SBIC and swap fee income recognized in 2023. ROATCE is a non-GAAP measure Represents data from the 2024 employee engagement survey. Net promoter score assesses likelihood to recommend on an 11‐point scale, where detractors (scores 0‐6) are subtracted from promoters (scores 9‐10), while passives (scores 7‐8) are not considered. See appendix for additional information on the source of the net promoter score. Represents data from the 2024 survey. Goals & Progress STRATEGIC PLAN 2024-2028 Goals 2024‐2028 2024 1Q’25 ROATCE1 ≥15% by 2028 19.2% 14.1% TBV Growth1 ≥10% per year 15.0% 14.0% Revenue Growth2 ≥10% per year 6.6% 12.6% Efficiency Ratio <60% by 2028 60.61% 60.28% Core Deposits to Total Funding ≥75% 71% 71% Employee Engagement & Participation3 ≥85% 86% 86% Net Promoter Score4 ≥70 70 70