First Business Bank Announces Second Quarter 2026 Financial Results

First Business Bank Announces Second Quarter 2026 Financial Results July 30, 2026 -- Sustained balance sheet growth and disciplined operating efficiency drive exceptional earnings and tangible book value growth -- First Business Financial Services, Inc. (the “Company”, the “Bank”, or “First Business Bank”) (Nasdaq: FBIZ) reported quarterly net income available to common shareholders of $15.4 million, or earnings per share ("EPS") of $1.84. This compares to net income available to common shareholders of $12.0 million, or $1.44 per share, in the first quarter of 2026 and $11.2 million, or $1.35 per share, in the second quarter of 2025. EPS for the second quarter of 2026 included a tax benefit that was partially offset by one-time compensation costs, resulting in a net benefit of $0.14 per share. "Our strong second quarter and first-half 2026 results position us to achieve our annual goal of 10% growth in loans, core deposits, revenue, and earnings,” said Dave Seiler, President and Chief Executive Officer. “During the quarter, we generated record pre-tax, pre-provision earnings by executing our relationship-based growth strategy, achieving strong loan and deposit growth with positive operating leverage. Our higher-yielding specialty C&I lending portfolios supported a strong net interest margin, which measured 3.67% and 3.68% for the first six months of 2026 and 2025, respectively. These achievements, along with stable asset quality, drove 11% growth in operating revenue, 15% growth in pre-tax, pre-provision earnings, and 17% growth in net income for the first half of 2026, excluding the impact of this quarter's $1.5 million tax benefit. This demonstrates our team's exceptional execution of our long-term strategic goals." "Our commitment to long-term profitability drove our decision to exit Small Business Administration 7(a) lending activities outside our existing bank market footprint. We expect this to have a minimal impact on 2026 earnings and to provide a modest earnings benefit in 2027. We are redirecting resources to higher-return growth opportunities, including our existing bank markets, higher-yielding niche C&I lending businesses, private wealth management, and limited partnership investments. We believe efficient execution of these growth strategies will continue to support strong shareholder returns while maintaining disciplined risk management." Quarterly Highlights Record Pre-Tax, Pre-Provision ("PTPP") Income. PTPP income grew to $19.8 million, up 15.1% and 23.7% from the linked and prior-year quarters, respectively, and up 14.9% on a year-to-date basis. This performance reflects continued growth across the Company’s balance sheet coupled with positive operating leverage.Robust Core Deposit Growth. Core deposits grew $81.6 million, or 11.7% annualized, from the linked quarter and $344.6 million, or 13.6%, from the second quarter of 2025.Continued Loan Growth. Loans increased $87.2 million, or 10.0% annualized, from the linked quarter and $336.2 million, or 10.3%, from the second quarter of 2025, including the transfer of $23.7 million in held-for-sale SBA loans to loans and leases receivable.Net Interest Margin Expansion. The Company's net interest margin was 3.78%, compared to 3.56% for the linked quarter. Expansion primarily reflects increased prepayment fees and asset-based loan fees. Net interest margin was strong and stable at 3.67% and 3.68% for the first six months of both 2026 and 2025, respectively. The Company maintains its annual net interest margin target range of 3.60%-3.65%.Strong Non-interest Income. Non-interest income increased $1.3 million, up 18.1% from the prior-year quarter, driven by a 13.6% increase in private wealth management service fees. Non-interest income for the first six months of 2026 grew 16.9% over the prior-year period, or 24.3% after excluding gains on the sale of SBA loans, reflecting the ongoing success of revenue diversification efforts.Decrease in Non-Performing Assets: Non-performing assets ("NPAs") declined $2.4 million, or 6.0%, from the linked quarter, resulting in an eight basis point improvement in the ratio of NPAs to Total Assets.Continued Tangible Book Value Growth. The Company’s strong earnings continued to drive growth in tangible book value per share, producing a 15.2% 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, 2026 March 31, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Net interest income $38,142 $35,518 $33,784 $73,659 $67,042 Adjusted non-interest income (1) 8,569 8,775 7,255 17,345 14,834 Operating revenue(1) 46,711 44,293 41,039 91,004 81,876 Operating expense(1) 26,892 27,081 25,023 53,973 49,640 Pre-tax, pre-provision adjusted earnings(1) 19,819 17,212 16,016 37,031 32,236 Less: Provision for credit losses 2,066 2,960 2,701 5,027 5,360 Loss (gain) on repossessed assets — — 4 — (4) SBA recourse benefit — (121) (59) (121) (59) Impairment (recovery) of tax credit investments 552 (7) — 545 110 SBA severance expense 405 — — 405 — Income before income tax expense 16,796 14,380 13,370 31,175 26,829 Income tax expense 1,216 2,180 1,948 3,395 4,236 Net income $15,580 $12,200 $11,422 $27,780 $22,593 Preferred stock dividends 219 219 219 438 438 Net income available to common shareholders $15,361 $11,981 $11,203 $27,342 $22,155 Earnings per share, diluted $1.84 $1.44 $1.35 $3.28 $2.66 Book value per share $45.81 $44.12 $39.98 $45.81 $39.98 Tangible book value per share(1) $44.38 $42.68 $38.54 $44.38 $38.54 Net interest margin(2) 3.78% 3.56% 3.67% 3.67% 3.68% Fee income ratio (non-interest income / total revenue) 18.34% 19.81% 17.68% 19.06% 18.12% Efficiency ratio(1) 57.57% 61.14% 60.97% 59.31% 60.63% Return on average assets(2) 1.43% 1.13% 1.14% 1.28% 1.14% Return on average tangible common equity (2) 16.89% 13.55% 14.17% 15.25% 14.15% Period-end loans and leases receivable $3,585,615 $3,498,903 $3,250,925 $3,585,615 $3,250,925 Average loans and leases receivable $3,550,415 $3,425,751 $3,239,840 $3,488,427 $3,212,967 Period-end core deposits $2,877,675 $2,796,059 $2,533,099 $2,877,675 $2,533,099 Average core deposits $2,860,053 $2,848,601 $2,396,517 $2,854,359 $2,379,799 Allowance for credit losses, including unfunded commitment reserves $39,517 $38,489 $38,210 $39,517 $38,210 Non-performing assets $38,062 $40,503 $28,664 $38,062 $28,664 Allowance for credit losses as a percent of total gross loans and leases 1.10% 1.10% 1.18% 1.10% 1.18% Non-performing assets as a percent of total assets 0.86% 0.94% 0.72% 0.86% 0.72% 1. 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. 2. Calculation is annualized. Second Quarter 2026 Compared to First Quarter 2026 Net interest income increased $2.6 million, or 7.4%, to $38.1 million. Net interest income increased as average loans and leases receivable grew by $124.7 million, or 14.6% annualized during the second quarter. The increase also benefited from a $645,000 increase in prepayment fees.The yield on average interest-earning assets increased 24 basis points to 6.45% from 6.21%, primarily due to the deployment of excess cash balances held at the Federal Reserve into loan growth during the second quarter and higher prepayment fees.The rate paid for average core deposits was stable at 2.40% compared to 2.41%, while the rate paid on average total bank funding increased two basis points to 2.75% from 2.73%. Total bank funding includes total deposits and Federal Home Loan Bank (“FHLB”) advances.Net interest margin increased to 3.78% from 3.56% in the linked quarter, primarily due to the deployment of excess cash balances held at the Federal Reserve into loan growth during the second quarter and higher prepayment fees.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 $2.1 million compared to $3.0 million in the linked quarter. Compared to the linked quarter, the provision for credit losses was primarily driven by lower net charge-offs and a decrease in qualitative reserve factors within the general reserve, partially offset by increases in general reserves due to quantitative reserve factors and loan growth. See the Provision for Credit Loss breakdown table below for more detail. Non-interest income decreased $206,000, or 2.3%, to $8.6 million. Excluding gain on sale of SBA loans, non-interest income increased $386,000, or 4.7%. Gain on sale of SBA loans decreased $592,000 due to management's decision to hold for investment any existing and new SBA 7(a) loans.Commercial loan swap fee income decreased $466,000, or 74.2%, to $162,000. Swap fee income varies from period to period based on loan activity and the interest rate environment.Private wealth fee income increased $380,000, or 9.8%, to $4.3 million. Private wealth assets under management and administration measured $4.235 billion on June 30, 2026, up $353.8 million or, 36.47% annualized from the prior quarter. Results for the quarter benefited from seasonal client tax processing fees of $247,000. Fee income is primarily based on asset levels and may vary based on seasonal activity and the timing of fluctuations in market values.Other non-interest income increased $362,000 to $1.5 million, primarily due to an increase in limited partnership investment income. Non-interest expense increased $896,000, or 3.3%, to $27.8 million, while operating expense decreased $189,000, or 0.7%, to $26.9 million. Compensation expense was $18.5 million, decreasing by $79,000, or 0.4% from the linked quarter. The decrease was primarily driven by lower salaries and benefits expense associated with the Company's strategic exit from out of market SBA 7(a) lending activities, as well as lower payroll taxes following the first quarter annual cash bonus payout. These decreases were almost fully offset by $405,000 of severance expense related to the out of market SBA 7(a) lending exit and higher annual cash bonus accruals reflecting above-target Company performance. Average full-time equivalents (“FTEs”) for the second quarter of 2026 were 360, compared to 373 in the linked quarter, with the decrease primarily driven by exit of out of market SBA 7(a) lending. Excluding FTEs in out of market SBA 7(a) lending from both periods of comparison, average FTEs were 354, compared to 352 in the linked quarter.Other non-interest expense increased $646,000 to $1.8 million, primarily due to a $552,000 impairment on tax credit investments. The impairment on tax credit investments is related to historic rehabilitation tax credits that are more than offset by a reduction to income tax expense in current or prior periods.Data processing expense increased $212,000, or 16.7%, to $1.5 million, due to an increase in core processing costs and annual expense related to tax processing on behalf of the Bank's private wealth clients.Marketing expense increased $129,000, or 18.1%, to $840,000, primarily due to timing of marketing campaigns. Income tax expense decreased $964,000 to $1.2 million. The effective tax rate was 7.2% for the three months ended June 30, 2026, compared to 15.2% for the linked quarter. The change in tax expense primarily reflects the $1.5 million, or $0.18 after tax per share, release of the remaining state deferred tax valuation allowance which was initially recognized in 2023 following the enactment of a state law that excluded small business lending interest from state tax. In the second quarter 2026, this valuation allowance was released due to sustained historical and forecasted Wisconsin taxable income. Excluding the allowance release, the effective tax rate was 15.9%. The Company expects to report a full year 2026 effective tax rate between 13% and 15%. For the remaining quarters, the effective quarterly tax rate is estimated to range between 15% and 17%. Total period-end loans and leases receivable increased $87.2 million, or 10.0% annualized, to $3.588 billion. The average rate earned on average loans and leases receivable was 6.76%, up 19 basis points from 6.57% in the prior quarter. Excluding the transfer of $23.7 million of SBA 7(a) loans from held-for-sale to loans and leases receivable, period-end loans increased 7.2% during the quarter. Loan growth was moderated by elevated payoff activity, with payoffs approximately $50 million above the Company's quarterly average over the past two years. CRE loans increased $66.3 million, or 12.7%, to $2.162 billion, primarily due to growth across the bank markets.C&I loans increased $22.1 million, or 6.5% to $1.380 billion, primarily due to the aforementioned transfer of held for sale SBA 7(a) loans to held for investment and an increase in asset-based lending loans. Total period-end core deposits increased $81.6 million, or 11.7% annualized, to $2.878 billion. The average rate paid was stable at 2.40% compared to 2.41% in the prior quarter. Period-end wholesale funding, including FHLB advances and brokered deposits, decreased $12.1 million, or 1.19%, to $1.006 billion. Wholesale funding continues to support interest rate risk management through match-funding of fixed-rate assets to enhance funding flexibility and help stabilize net interest margin. Wholesale deposits decreased $55.5 million to $714.5 million. The average rate paid on wholesale deposits increased six basis points to 4.03% and the weighted average original maturity remained flat at 3.3 years.FHLB advances increased $43.3 million to $291.9 million. The average rate paid on FHLB advances increased 39 basis points to 3.53% and the weighted average original maturity decreased to 6.0 years from 6.2 years. Non-performing assets decreased $2.4 million to $38.1 million, or 0.86% of total assets, compared to 0.94% in the prior quarter. The decline was primarily due to a repayment of a non-accrual SBA loan and lower non-accrual equipment finance loans and leases. The allowance for credit losses, including the unfunded credit commitments reserve, increased $1.0 million, or 2.7%, primarily due to increases in general reserves due to loan growth and a modest decline in the economic outlook in our model forecast, partially offset by a decrease in general reserves due to qualitative risk factors and lower specific reserves. The allowance for credit losses, including unfunded credit commitment reserves, as a percent of total gross loans and leases was 1.10% in both quarters. Second Quarter 2026 Compared to Second Quarter 2025 Net interest income increased $4.4 million, or 12.9%, to $38.1 million. Growth reflects a 9.59% increase in average gross loans and leases and a $706,000 increase in prepayment fees.The yield on average interest-earning assets decreased 20 basis points to 6.45% from 6.65%. This decrease in yield was primarily due to the decrease in short-term market rates, partially offset by an increase in prepayment fees and asset-based loan fees. The interest-earning asset beta was 28.8%.The rate paid for average core deposits decreased 35 basis points to 2.40% from 2.75%. The rate paid for average total bank funding decreased 33 basis points to 2.75% from 3.08%. The core deposit and total bank funding betas compared to the prior year were 50.0% and 47.1%, respectively.Net interest margin increased 11 basis points to 3.78% from 3.67%. The increase in net interest margin was primarily due to an increase in prepayment fees and asset-based loan fees, partially offset by a decrease in short-term market rates. The Company reported provision for credit losses of $2.1 million, compared to $2.7 million in the second quarter of 2025. See the Provision for Credit Loss breakdown table below for more detail. Non-interest income increased $1.3 million, or 18.1%, to $8.6 million. Excluding gain on sale of SBA loans, non-interest income increased $1.7 million, or 24.9%. Other non-interest income increased $731,000, or 91.6%, to $1.5 million, primarily driven by higher returns on the Company’s investments in limited partnerships.Private wealth fee income increased $509,000, or 13.6%, to $4.3 million. Private wealth assets under management and administration measured $4.235 billion at June 30, 2026 up $503.9 million, or 13.5%. Fee income is primarily based on asset levels and may vary based on seasonal activity and the timing of fluctuations in market values.Service charges on deposits increased $233,000, or 21.1%, to $1.3 million, primarily driven by new and expanded core deposit relationships.Bank-owned life insurance income increased $142,000, or 23.1%, to $757,000, primarily due to the purchase of new policies in the second quarter of 2025.Gain on sale of SBA loans decreased $397,000 due to management's decision to hold for investment any existing and new SBA 7(a) loans. Non-interest expense increased $2.9 million, or 11.5%, to $27.8 million. Operating expense increased $1.9 million or 7.5%, to $26.9 million. Compensation expense increased $1.9 million, or 11.7%, to $18.5 million. Growth reflects annual merit increases and promotions, the aforementioned $405,000 of severance expense related to the out of market SBA 7(a) lending exit, and higher annual cash bonus accruals due to improved Company performance. Excluding SBA severance, compensation expense increased $1.5 million, or 9.2%. Average FTEs decreased 1.1% to 360 in the second quarter of 2026, compared to 364 in the second quarter of 2025. Excluding FTEs in out of market SBA 7(a) lending in both periods of comparison, average FTEs increased 2.9% to 354 in the second quarter of 2026, compared to 344 in the second quarter of 2025.Computer software expense increased $302,000, or 18.2%, to $2.0 million, primarily due to our commitment to innovative technology to support growth initiatives, enhance productivity, and improve the client experience.Marketing expense decreased $222,000, or 20.9%, to $840,000, primarily due to seasonality and timing of marketing campaigns. Management expects marketing spend for full year 2026 to be in line with prior-year spend. Total period-end loans and leases receivable increased $336.2 million, or 10.3%, to $3.588 billion. The average yield decreased 23 basis points to 6.76%, primarily due to a decrease in short-term market rates. CRE loans increased $214.6 million, or 11.0%, to $2.162 billion, primarily due to growth across our bank markets.C&I loans increased $121.3 million, or 9.6%, to $1.380 billion, primarily due to growth across our bank markets and in asset-based lending. Total period-end core deposits grew $344.6 million, or 13.6%, to $2.878 billion. The average rate paid decreased 35 basis points to 2.40%, reflecting a decrease in short-term market rates. Period-end wholesale funding increased $12.9 million, or 1.3%, to $1.006 billion. Wholesale deposits decreased $57.6 million, or 7.5%, to $714.5 million. The average rate paid on wholesale deposits decreased one basis point to 4.03% and the weighted average original maturity decreased to 3.3 years from 4.1 years.FHLB advances increased $70.7 million, or 31.9%, to $346.8 million. The average rate paid on FHLB advances increased 21 basis points to 3.53% and the weighted average original maturity increased to 6.0 years from 5.5 years. Non-performing assets increased to $38.1 million, or 0.86% of total assets, from $28.7 million, or 0.72% of total assets, primarily reflecting the fourth quarter 2025 downgrade of $20.4 million of CRE loans from a single client relationship. The increase was partially offset by a $3.4 million sale at par in the first quarter of 2026 related to that same relationship, paydowns in SBA, and lower non-accrual balances from equipment finance loans. The allowance for credit losses, including unfunded commitment reserves, increased $1.3 million to $39.5 million primarily due to higher general reserves as a result of loan growth and quantitative factors, partially offset by lower specific reserves and lower qualitative factors. The allowance for credit losses as a percent of total gross loans and leases was 1.10%, compared with 1.18% in the prior year. Dividend Announced On July 30, 2026, the Company's Board of Directors declared a quarterly cash dividend on its common stock of $0.34 per share, which is equivalent to a dividend yield of 2.01% based on the market close price of $67.58 on Wednesday, July 29, 2026. The quarterly dividend is the same as the quarterly dividend declared in April 2026, and based on second quarter 2026 earnings per share, this represents a dividend payout ratio of 18%. This regular cash dividend is payable on August 26, 2026, to shareholders of record at the close of business on August 12, 2026. The Board of Directors also declared a dividend on the Company’s 7% Series A Preferred Stock of $17.50 per share, payable on September 15, 2026, to shareholders of record on August 28, 2026. Earnings Release Supplement and Conference Call On July 30, 2026, 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 30, 2026. 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 2026 earnings call to be held at 8:00 a.m. Central time on July 31, 2026. The conference call can be accessed at 833-461-5787 (585-542-9983 if outside the United States and Canada), using the conference call access code: FBIZ, 940117929. Investors may also listen live via webcast at: https://events.q4inc.com/attendee/940117929. 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, the adverse effects of public health events on the global, national, and local economy, and geopolitical instability and international conflicts that may affect energy prices or otherwise result in market volatility.Uncertainty created by potential federal government actions relating to the authority of regulatory agencies (including bank regulators), international trade policy, prolonged shutdown of the federal government, 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.Increases in FDIC insurance assessments. 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, 2025, and other filings with the Securities and Exchange Commission. SELECTED FINANCIAL CONDITION DATA (Unaudited) As of (in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Assets Cash and cash equivalents $163,358 $137,125 $39,485 $44,349 $123,208 Securities available-for-sale, at fair value 409,692 420,325 422,087 411,111 382,365 Securities held-to-maturity, at amortized cost 4,674 4,797 5,210 5,584 5,714 Loans held for sale — 23,700 18,849 13,482 12,415 Loans and leases receivable 3,585,615 3,498,903 3,373,241 3,334,956 3,250,925 Allowance for credit losses (37,393) (36,631) (35,877) (36,690) (36,861) Loans and leases receivable, net 3,548,222 3,462,272 3,337,364 3,298,266 3,214,064 Premises and equipment, net 4,328 4,500 4,669 4,936 5,063 Repossessed assets — — — — 31 Right-of-use assets 4,787 5,053 5,317 5,577 5,713 Bank-owned life insurance 85,533 84,776 83,994 83,255 82,761 Federal Home Loan Bank stock, at cost 13,173 11,242 8,940 9,605 10,027 Goodwill and other intangible assets 11,933 12,011 11,985 12,041 12,049 Derivatives 45,827 38,198 36,515 37,634 40,814 Accrued interest receivable and other assets 118,477 116,856 107,472 109,005 108,501 Total assets $4,410,004 $4,320,855 $4,081,887 $4,034,845 $4,002,725 Liabilities and Stockholders’ Equity Core deposits $2,877,675 $2,796,059 $2,673,003 $2,592,110 $2,533,099 Wholesale deposits 714,490 769,943 707,412 740,961 772,123 Total deposits 3,592,165 3,566,002 3,380,415 3,333,071 3,305,222 Federal Home Loan Bank advances and other borrowings 346,794 303,451 252,051 266,677 276,131 Lease liabilities 6,698 7,032 7,361 7,687 7,887 Derivatives 39,733 35,857 36,926 38,726 41,228 Accrued interest payable and other liabilities 29,307 28,433 33,549 30,365 27,462 Total liabilities 4,014,697 3,940,775 3,710,302 3,676,526 3,657,930 Total stockholders’ equity 395,307 380,080 371,585 358,319 344,795 Total liabilities and stockholders’ equity $4,410,004 $4,320,855 $4,081,887 $4,034,845 $4,002,725 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, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 June 30, 2026 June 30, 2025 Total interest income $65,021 $61,896 $62,752 $63,746 $61,282 $126,916 $120,812 Total interest expense 26,879 26,378 27,990 28,860 27,498 53,257 53,770 Net interest income 38,142 35,518 34,762 34,886 33,784 73,659 67,042 Provision for credit losses 2,066 2,960 1,855 1,440 2,701 5,027 5,360 Net interest income after provision for credit losses 36,076 32,558 32,907 33,446 31,083 68,632 61,682 Private wealth management service fees 4,257 3,877 3,788 3,687 3,748 8,134 7,240 Gain on sale of SBA loans — 592 140 382 397 592 1,360 Service charges on deposits 1,336 1,318 1,188 1,151 1,103 2,653 2,152 Loan fees 528 436 410 501 424 964 812 Bank owned life insurance income 757 757 739 965 615 1,514 1,051 Swap fees 162 628 738 974 170 790 283 Other non-interest income 1,529 1,167 458 1,980 798 2,698 1,936 Total non-interest income 8,569 8,775 7,461 9,640 7,255 17,345 14,834 Compensation 18,462 18,541 17,151 17,442 16,534 37,003 33,281 Occupancy 638 588 581 567 564 1,226 1,155 Professional fees 1,493 1,446 1,001 1,071 1,487 2,938 2,946 Data processing 1,482 1,270 1,158 1,123 1,368 2,752 2,450 Marketing 840 711 938 876 1,062 1,551 2,030 Equipment 351 407 374 296 335 758 711 Computer software 1,958 1,921 1,902 1,826 1,656 3,879 3,259 FDIC insurance 819 909 800 817 834 1,729 1,614 Other non-interest expense 1,806 1,160 225 1,682 1,128 2,966 2,241 Total non-interest expense 27,849 26,953 24,130 25,700 24,968 54,802 49,687 Income before income tax expense 16,796 14,380 16,238 17,386 13,370 31,175 26,829 Income tax expense 1,216 2,180 2,905 2,993 1,948 3,395 4,236 Net income $15,580 $12,200 $13,333 $14,393 $11,422 $27,780 $22,593 Preferred stock dividends 219 219 219 218 219 438 438 Net income available to common shareholders $15,361 $11,981 $13,114 $14,175 $11,203 $27,342 $22,155 Per common share: Basic earnings $1.84 $1.44 $1.58 $1.70 $1.35 $3.28 $2.66 Diluted earnings 1.84 1.44 1.58 1.70 1.35 $3.28 $2.66 Dividends declared 0.34 0.34 0.29 0.29 0.29 $0.68 $0.58 Book value 45.81 44.12 43.19 41.60 39.98 $45.81 $39.98 Tangible book value 44.38 42.68 41.75 40.16 38.54 $44.38 $38.54 Weighted-average common shares outstanding(1) 8,208,002 8,186,174 8,173,059 8,171,404 8,141,159 8,201,585 8,149,600 Weighted-average diluted common shares outstanding(1) 8,208,002 8,186,174 8,173,059 8,171,404 8,141,159 8,201,585 8,149,600 (1) Excluding participating securities. NET INTEREST INCOME ANALYSIS (Unaudited) For the Three Months Ended (Dollars in thousands) June 30, 2026 March 31, 2026 June 30, 2025 Average Balance Interest Average Yield/Rate(4) Average Balance Interest Average Yield/Rate(4) Average Balance Interest Average Yield/Rate(4) Interest-earning assets Commercial real estate and other mortgage loans(1) $2,137,098 $31,660 5.93% $2,071,202 $30,216 5.84% $1,932,593 $30,344 6.28% Commercial and industrial loans(1) 1,364,594 27,594 8.09 1,306,970 25,409 7.78 1,257,296 25,604 8.15 Consumer and other loans(1) 48,723 756 6.21 47,579 683 5.74 49,951 673 5.39 Total loans and leases receivable(1) 3,550,415 60,010 6.76 3,425,751 56,308 6.57 3,239,840 56,621 6.99 Mortgage-related securities(2) 372,462 3,941 4.23 375,989 3,965 4.22 334,159 3,533 4.23 Other investment securities(3) 48,679 279 2.29 50,146 280 2.23 46,416 250 2.15 FHLB stock 14,799 338 9.14 9,067 211 9.31 12,852 297 9.24 Short-term investments 46,681 453 3.88 128,649 1,132 3.52 52,772 581 4.40 Total interest-earning assets 4,033,036 65,021 6.45 3,989,602 61,896 6.21 3,686,039 61,282 6.65 Non-interest-earning assets 250,531 259,039 229,968 Total assets $4,283,567 $4,248,641 $3,916,007 Interest-bearing liabilities Transaction accounts $1,279,116 8,556 2.68% $1,220,945 $8,354 2.74% $985,606 $7,964 3.23% Money market 931,051 6,488 2.79 925,282 6,354 2.75 821,845 6,789 3.30 Certificates of deposit 235,510 2,109 3.58 273,635 2,447 3.58 178,643 1,720 3.85 Wholesale deposits 590,739 5,952 4.03 682,138 6,773 3.97 773,750 7,784 4.02 Total interest-bearing deposits 3,036,416 23,105 3.04 3,102,000 23,928 3.09 2,759,844 24,257 3.52 FHLB advances 327,915 2,891 3.53 200,132 1,567 3.13 284,428 2,358 3.32 Other borrowings 54,846 883 6.44 54,815 883 6.44 54,733 883 6.45 Total interest-bearing liabilities 3,419,177 26,879 3.14 3,356,947 26,378 3.14 3,099,005 27,498 3.55 Non-interest-bearing demand deposit accounts 414,376 428,739 410,423 Other non-interest-bearing liabilities 74,188 85,304 78,388 Total liabilities 3,907,741 3,870,990 3,587,816 Stockholders’ equity 387,798 377,651 340,271 Total liabilities and stockholders’ equity $4,295,539 $4,248,641 $3,928,087 Net interest income $38,142 $35,518 $33,784 Interest rate spread 3.30% 3.06% 3.10% Net interest-earning assets $613,859 $632,655 $587,034 Net interest margin 3.78% 3.56% 3.67% (1) 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. (2) Includes amortized cost basis of assets available for sale and held to maturity. (3) Yields on tax-exempt municipal obligations are not presented on a tax-equivalent basis in this table. (4) Represents annualized yields/rates. BETA ANALYSIS For the Three Months Ended (Unaudited) June 30, 2026 June 30, 2025 Average Yield/Rate(3) Average Yield/Rate(3) Increase (Decrease) Total loans and leases receivable(a) 6.76% 6.99% (0.23)% Total interest-earning assets(b) 6.45% 6.65% (0.20)% Total core deposits(e) 2.40% 2.75% (0.35)% Total bank funding(f) 2.75% 3.08% (0.33)% Net interest margin(g) 3.78% 3.67% 0.12% Effective fed funds rate(2)(i) 3.63% 4.33% (0.70)% Beta Calculations: Total loans and leases receivable(a)/(i) 32.8% Total interest-earning assets(b)/(i) 28.8% Total core deposits(e/i) 50.0% Total bank funding(f)/(i) 47.1% Net interest margin(g/i) (16.7)% (1) Excludes prepayment activity in all periods of comparison. (2) Board of Governors of the Federal Reserve System (US), Effective Federal Funds Rate [DFF]. Retrieved from FRED, Federal Reserve Bank of St. Louis. Represents average daily rate. (3) 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, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 June 30, 2026 June 30, 2025 Change due to qualitative factors $(357) $(706) $(538) $(243) $590 $(1,063) $235 Change due to quantitative factors 541 10 (607) (173) 746 551 2,306 Charge-offs 1,524 2,331 2,809 1,708 1,338 3,856 5,148 Recoveries (486) (168) (264) (440) (332) (654) (730) Change in reserves on individually evaluated loans, net (37) 382 (76) (550) (247) 345 (2,742) Change due to loan growth, net 615 1,068 408 795 536 1,683 1,277 Change in unfunded commitment reserves 266 43 123 343 70 309 (134) Total provision for credit losses $2,066 $2,960 $1,855 $1,440 $2,701 $5,027 $5,360 ALLOWANCE FOR CREDIT LOSS COMPOSITION As of June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 (In Thousands) % of Total Loans and Leases (In Thousands) % of Total Loans and Leases (In Thousands) % of Total Loans and Leases (In Thousands) % of Total Loans and Leases Allowance for credit losses: Loans collectively evaluated $31,499 0.88% $30,700 0.88% $30,327 0.90% $31,065 0.93% Loans individually evaluated 5,894 0.16% 5,931 0.17% 5,550 0.16% 5,625 0.17% Unfunded commitments reserve 2,124 1,858 1,815 1,692 Total 39,517 1.10% 38,489 1.10% 37,692 1.12% 38,382 1.15% Loans and lease receivables: $3,585,615 $3,498,903 $3,373,241 $3,334,956 PERFORMANCE RATIOS For the Three Months Ended For the Six Months Ended (Unaudited) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 June 30, 2026 June 30, 2025 Return on average assets (annualized) 1.43% 1.13% 1.25% 1.40% 1.14% 1.28% 1.14% Return on average tangible common equity (annualized) 16.89% 13.55% 14.83% 17.29% 14.17% 15.25% 14.15% Efficiency ratio 57.57% 61.14% 56.61% 57.44% 60.97% 59.31% 60.63% Interest rate spread 3.30% 3.06% 2.99% 3.11% 3.10% 3.18% 3.11% Net interest margin 3.78% 3.56% 3.53% 3.68% 3.67% 3.67% 3.68% Average interest-earning assets to average interest-bearing liabilities 117.95% 118.85% 119.25% 118.66% 118.94% 118.39% 119.44% ASSET QUALITY RATIOS (Unaudited) As of (Dollars in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Non-accrual loans and leases $38,062 $40,503 $43,855 $23,513 $28,633 Repossessed assets — — — — 31 Total non-performing assets $38,062 $40,503 $43,855 $23,513 $28,664 Non-accrual loans and leases as a percent of total gross loans and leases 1.06% 1.16% 1.30% 0.70% 0.88% Non-performing assets as a percent of total gross loans and leases plus repossessed assets 1.06% 1.16% 1.30% 0.70% 0.88% Non-performing assets as a percent of total assets 0.86% 0.94% 1.07% 0.58% 0.72% Allowance for credit losses as a percent of total gross loans and leases 1.10% 1.10% 1.12% 1.15% 1.18% Allowance for credit losses as a percent of non-accrual loans and leases 103.82% 95.03% 85.95% 163.24% 133.45% NET CHARGE-OFFS (RECOVERIES) (Unaudited) For the Three Months Ended For the Six Months Ended (Dollars in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 June 30, 2026 June 30, 2025 Charge-offs $1,524 $2,331 $2,809 $1,708 $1,338 $3,856 $5,148 Recoveries (486) (168) (264) (440) (332) (654) (730) Net charge-offs (recoveries) $1,038 $2,163 $2,545 $1,268 $1,006 $3,202 $4,418 Net charge-offs (recoveries) as a percent of average gross loans and leases (annualized) 0.12% 0.25% 0.30% 0.15% 0.12% 0.18% 0.28% CAPITAL RATIOS As of and for the Three Months Ended (Unaudited) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Total capital to risk-weighted assets 12.21% 12.15% 12.24% 12.18% 12.25% Tier I capital to risk-weighted assets 9.84% 9.74% 9.79% 9.67% 9.66% Common equity tier I capital to risk-weighted assets 9.54% 9.43% 9.48% 9.34% 9.33% Tier I capital to adjusted assets 9.11% 8.93% 8.86% 8.87% 8.82% Tangible common equity to tangible assets 8.44% 8.26% 8.54% 8.31% 8.04% LOAN AND LEASE RECEIVABLE COMPOSITION (Unaudited) As of (in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Commercial real estate: Commercial real estate - owner occupied $345,984 $306,593 $293,706 $287,005 $262,988 Commercial real estate - non-owner occupied 874,669 925,425 885,870 871,807 846,990 Construction and land development 227,782 224,866 248,560 236,590 218,840 Multi-family 654,405 577,271 571,468 565,102 573,208 1-4 family 58,981 61,332 60,661 66,735 45,171 Total commercial real estate 2,161,821 2,095,487 2,060,265 2,027,239 1,947,197 Commercial and industrial 1,380,476 1,358,413 1,273,997 1,264,111 1,259,171 Consumer and other 46,027 47,223 40,965 45,323 45,744 Total gross loans and leases receivable 3,588,324 3,501,123 3,375,227 3,336,673 3,252,112 Less: Allowance for credit losses 37,393 36,631 35,877 36,690 36,861 Deferred loan fees 2,709 2,220 1,986 1,717 1,187 Loans and leases receivable, net $3,548,222 $3,462,272 $3,337,364 $3,298,266 $3,214,064 DEPOSIT COMPOSITION (Unaudited) As of (in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Non-interest-bearing transaction accounts $420,556 $405,281 $378,770 $400,697 $396,448 Interest-bearing transaction accounts 1,297,353 1,170,271 1,103,696 1,050,233 1,047,434 Money market accounts 936,914 960,052 905,773 840,477 833,684 Certificates of deposit 222,852 260,455 284,764 300,703 255,533 Wholesale deposits 714,490 769,943 707,412 740,961 772,123 Total deposits $3,592,165 $3,566,002 $3,380,415 $3,333,071 $3,305,222 Uninsured deposits $1,192,776 $1,237,344 $1,220,177 $1,100,868 $1,069,509 Less: uninsured deposits collateralized by pledged assets 42,130 59,613 68,656 72,561 67,990 Total uninsured, net of collateralized deposits $1,150,646 $1,177,731 $1,151,521 $1,028,307 $1,001,519 % of total deposits 32.0% 33.0% 34.1% 30.9% 30.3% SOURCES OF LIQUIDITY (Unaudited) As of (in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Short-term investments $131,294 $104,565 $8,714 $8,074 $72,520 Collateral value of unencumbered pledged loans 987,993 968,320 992,398 906,042 893,499 Market value of unencumbered securities 378,423 387,700 388,474 376,783 347,196 Readily accessible liquidity 1,497,710 1,460,585 1,389,586 1,290,899 1,313,215 Fed fund lines 45,000 45,000 45,000 45,000 45,000 Excess brokered CD capacity(1) 878,888 806,268 775,851 732,951 645,843 Total liquidity $2,421,598 $2,311,853 $2,210,437 $2,068,850 $2,004,058 Total uninsured, net of collateralized deposits $1,150,646 $1,177,731 $1,151,521 $1,028,307 $1,001,519 1. Bank internal policy limits brokered CDs to 50% of total bank funding when combined with value of unencumbered pledged loans. EARNINGS PER SHARE For the Three Months Ended For the Six Months Ended June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 June 30, 2026 June 30, 2025 (Dollars in Thousands, Except Share Data) Basic earnings per common share Net Income $ 15,580 $ 12,200 $ 13,333 $ 14,393 $ 11,422 $ 27,780 $ 22,593 Less: preferred stock dividends 219 219 219 218 219 438 438 Less: earnings allocated to participating securities 233 220 235 259 207 462 443 Basic earnings allocated to common shareholders $ 15,128 $ 11,761 $ 12,879 $ 13,916 $ 10,996 $ 26,880 $ 21,712 Weighted-average common shares outstanding, excluding participating securities 8,208,002 8,186,174 8,173,059 8,171,404 8,141,159 8,201,585 8,149,600 Basic earnings per common share $ 1.84 $ 1.44 $ 1.58 $ 1.70 $ 1.35 $ 3.28 $ 2.66 Diluted earnings per common share Earnings allocated to common shareholders, diluted $ 15,128 $ 11,761 $ 12,879 $ 13,916 $ 10,996 $ 26,880 $ 21,712 Weighted-average diluted shares outstanding, excluding participating securities 8,208,002 8,186,174 8,173,059 8,171,404 8,141,159 8,201,585 8,149,600 Diluted earnings per common share $ 1.84 $ 1.44 $ 1.58 $ 1.70 $ 1.35 $ 3.28 $ 2.66 PRIVATE WEALTH OFF-BALANCE SHEET COMPOSITION (Unaudited) As of (in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Trust assets under management $3,947,362 $3,613,536 $3,541,768 $3,543,594 $3,461,659 Trust assets under administration 287,226 267,214 272,910 270,222 268,996 Total trust assets $4,234,588 $3,880,750 $3,814,678 $3,813,816 $3,730,655 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, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Common stockholders’ equity $383,315 $368,088 $359,593 $346,327 $332,803 Less: Goodwill and other intangible assets (11,933) (12,011) (11,985) (12,041) (12,049) Tangible common equity $371,382 $356,077 $347,608 $334,286 $320,754 Common shares outstanding 8,368,320 8,343,519 8,325,376 8,324,387 8,323,470 Book value per share $45.81 $44.12 $43.19 $41.60 $39.98 Tangible book value per share $44.38 $42.68 $41.75 $40.16 $38.54 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. 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, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Common stockholders’ equity $383,315 $368,088 $359,593 $346,327 $332,803 Less: Goodwill and other intangible assets (11,933) (12,011) (11,985) (12,041) (12,049) Tangible common equity (a) $371,382 $356,077 $347,608 $334,286 $320,754 Total assets $4,410,004 $4,320,855 $4,081,887 $4,034,845 $4,002,725 Less: Goodwill and other intangible assets (11,933) (12,011) (11,985) (12,041) (12,049) Tangible assets (b) $4,398,071 $4,308,844 $4,069,902 $4,022,804 $3,990,676 Tangible common equity to tangible assets 8.44% 8.26% 8.54% 8.31% 8.04% RETURN ON AVERAGE TANGIBLE COMMON EQUITY “Return on Average Tangible Common Equity” (“ROATCE”) is defined as the ratio net income available to common shareholders divided by average tangible common equity. The Company’s management believes that this measure is important to many investors in the marketplace who are interested in the return generated for common shareholders on the tangible capital invested. The information below reconciles average tangible common equity to its most comparable GAAP measure. (Unaudited) For the Three Months Ended For the Six Months Ended (Dollars in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 June 30, 2026 June 30, 2025 Net Income available to common shareholders (a) $15,361 $11,981 $13,114 $14,175 $11,203 $27,342 $22,155 Average common stockholders' equity 375,806 365,659 353,820 339,980 328,279 370,633 325,212 Less: average goodwill and other intangible assets 11,972 11,987 12,023 12,056 12,080 11,980 12,020 Average tangible common equity (b) 363,834 353,672 341,797 327,924 316,199 358,653 313,192 Return on average tangible common equity (a)/(b) 16.89% 13.55% 15.35% 17.29% 14.17% 15.25% 14.15% 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, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 June 30, 2026 June 30, 2025 Total non-interest expense $27,849 $26,953 $24,130 $25,700 $24,968 $54,802 $49,687 Less: Net loss (gain) on repossessed assets — — — 31 4 — (4) Impairment (recovery) of tax credit investments 552 (7) 229 — — 545 110 SBA severance expense 405 — — — — 405 — Contribution to First Business Charitable Foundation — — — 234 — — — SBA recourse benefit — (121) — (5) (59) (121) (59) Total operating expense (a) $26,892 $27,081 $23,901 $25,440 $25,023 $53,973 $49,640 Net interest income $38,142 $35,518 $34,762 $34,886 $33,784 $73,659 $67,042 Total non-interest income 8,569 8,775 7,461 9,640 7,255 17,345 14,834 Less: Bank owned life insurance claim — — — 234 — — — Adjusted non-interest income 8,569 8,775 7,461 9,406 7,255 17,345 14,834 Total operating revenue (b) $46,711 $44,293 $42,223 $44,292 $41,039 $91,004 $81,876 Efficiency ratio 57.57% 61.14% 56.61% 57.44% 60.97% 59.31% 60.63% Pre-tax, pre-provision adjusted earnings (b - a) $19,819 $17,212 $18,322 $18,852 $16,016 $37,031 $32,236 First Business Financial Services, Inc. Brian D. Spielmann Chief Financial Officer 608-232-5977 [email protected] Source: First Business Financial Services, Inc.