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1. Company Snapshot

1.a. Company Description

First Business Financial Services, Inc.operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals.The company offers deposit products, such as non-interest-bearing transaction accounts, interest-bearing transaction accounts, money market accounts, time deposits, and certificates of deposit, as well as credit cards.


It also provides loan products, including commercial real estate loans, commercial and industrial loans, small business administration loans, and direct financing leases, as well as consumer and other loans comprising home equity, first and second mortgage, and other personal loans for professional and executive clients.The company offers commercial lending, asset-based lending, equipment financing, accounts receivable financing, vendor financing, floorplan financing, treasury management services, and company retirement plans; trust and estate administration, financial planning, investment management, and private banking services; and investment portfolio administrative, asset-liability management, and asset-liability management process validation services for other financial institutions.First Business Financial Services, Inc.


was founded in 1909 and is headquartered in Madison, Wisconsin.

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1.b. Last Insights on FBIZ

First Business Financial Services, Inc.'s recent performance was driven by strong quarterly earnings, with Q2 earnings of $1.35 per share, matching estimates and representing a 10% year-over-year increase. The company's net income available to common shareholders reached $11.2 million, reflecting a solid financial position. Management's focus on profitability is evident, with a stable earnings trajectory. The company's recent earnings release highlights its resilience, with a steady financial performance. (Source: company reports)

1.c. Company Highlights

2. First Business Bank's Q3 Earnings Shine with Strong Revenue and Margin Growth

First Business Bank delivered an impressive third quarter, with revenues and earnings per share (EPS) exceeding expectations. The bank's EPS came in at $1.7, beating analyst estimates of $1.39. Net interest income growth was substantial, driven by a robust balance sheet expansion, with loan balances growing by $85 million or 10% annualized during the quarter. The net interest margin (NIM) expanded by 1 basis point to 3.68%, reflecting the bank's continued strong balance sheet management. Fee income comprised 19% of operating revenue, with significant growth in swap income and income from SBIC funds.

Publication Date: Nov -21

📋 Highlights
  • ROA Growth:: Year-to-date ROA increased 15 bps to 1.23% compared to 2024.
  • ROE Expansion:: Return on average tangible common equity exceeded 15%, up from ~14% in 2024.
  • Book Value Growth:: Tangible book value per share surged 16% year-over-year.
  • Operating Revenue Growth:: Pretax pre-provision earnings rose 18% QoQ and 20% YoY.
  • Net Interest Income Expansion:: Loan balances grew $85M (10% annualized) during Q3, contributing to a 3.68% net interest margin.

Revenue Growth Drivers

The bank's revenue growth was driven by a combination of net interest income and fee income. Loan balances grew across various geographies, with the Kansas City and Northeast Wisconsin markets leading the way. The accounts receivable financing business is poised for growth, with a strong pipeline and solid underwriting process driving better-than-average loss rates. Private Wealth assets continue to expand, delivering significant annuity-like fee income.

Asset Quality and Credit Risk

Asset quality remained stable, with nonperforming assets decreasing slightly during the quarter. Net charge-offs totaled $1.3 million, primarily from previously reserved equipment finance loans. The bank's overall portfolio continues to perform as expected, with no areas of particular concern. The bank's expertise in monitoring and analyzing collateral in its specialty businesses, such as asset-based lending and accounts receivable finance, allows it to manage credit risk effectively.

Valuation and Outlook

With a Price-to-Tangible Book Value (P/TBV) ratio of approximately 1.13, the stock appears reasonably valued. The bank's dividend yield stands at 2.33%, providing a relatively attractive return for income investors. Analysts estimate next year's revenue growth at 7.6%, which is slightly lower than the bank's historical growth rate. Given the bank's strong Q3 performance and optimistic outlook, investors may expect the bank to continue delivering solid results in the coming quarters.

Management's Guidance and Strategy

Management expects to continue investing in additional SBIC funds as a long-term earnings catalyst. The bank is also optimistic about its ability to grow its specialty businesses, such as asset-based lending and accounts receivable finance. With a strong culture and successful talent acquisition strategy, the bank is well-positioned to achieve its long-term growth objectives. As Corey Chambas mentioned, the bank has accumulated extra capital through strong earnings and may consider acquisitions that fit within its private wealth business or money management business.

3. NewsRoom

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First Business Financial Services, Inc. $FBIZ Shares Sold by Franklin Resources Inc.

Dec -06

Source: defenseworld.net

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Head-To-Head Contrast: First Business Financial Services (NASDAQ:FBIZ) & First Western Financial (NASDAQ:MYFW)

Dec -04

Source: defenseworld.net

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Old National Bancorp (NASDAQ:ONB) vs. First Business Financial Services (NASDAQ:FBIZ) Financial Review

Nov -27

Source: defenseworld.net

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First Business Financial Services Inc. Purchases 200 Shares of Meta Platforms, Inc. $META

Nov -04

Source: defenseworld.net

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First Business Financial Services, Inc. (FBIZ) Q3 2025 Earnings Call Transcript

Oct -31

Source: seekingalpha.com

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First Business Financial Services (FBIZ) Q3 Earnings: Taking a Look at Key Metrics Versus Estimates

Oct -31

Source: zacks.com

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First Business Financial Services (FBIZ) Q3 Earnings and Revenues Top Estimates

Oct -30

Source: zacks.com

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First Business Financial Services Inc. Lowers Stock Holdings in Broadcom Inc. $AVGO

Oct -30

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.00%)

6. Segments

Commercial Banking

Expected Growth: 10%

Strong loan growth driven by commercial and industrial lending, increased deposit market share, and expansion into new markets. Additionally, strategic investments in digital banking and customer relationship management have improved operational efficiency and enhanced customer experience, contributing to the 10% growth.

7. Detailed Products

Commercial Loans

First Business Financial Services, Inc. offers commercial loans to businesses of all sizes, providing financing for various business needs such as expansion, equipment purchases, and working capital.

Treasury Management Services

First Business Financial Services, Inc. provides treasury management services to help businesses manage their cash flow, reduce fraud risk, and optimize their financial operations.

Cash Management Services

First Business Financial Services, Inc. offers cash management services to help businesses manage their cash flow, optimize their liquidity, and reduce financial risk.

Credit Cards

First Business Financial Services, Inc. offers credit cards to businesses, providing a convenient and flexible way to manage their expenses and earn rewards.

Merchant Services

First Business Financial Services, Inc. provides merchant services to businesses, enabling them to accept credit and debit card payments from their customers.

Retirement Plan Services

First Business Financial Services, Inc. offers retirement plan services to businesses, helping them to provide retirement benefits to their employees.

8. First Business Financial Services, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for First Business Financial Services, Inc. is medium due to the presence of alternative financial institutions and online banking services.

Bargaining Power Of Customers

The bargaining power of customers for First Business Financial Services, Inc. is low due to the lack of negotiating power and the presence of multiple financial institutions.

Bargaining Power Of Suppliers

The bargaining power of suppliers for First Business Financial Services, Inc. is medium due to the presence of multiple suppliers and the company's dependence on them.

Threat Of New Entrants

The threat of new entrants for First Business Financial Services, Inc. is high due to the ease of entry into the financial services industry and the presence of new fintech companies.

Intensity Of Rivalry

The intensity of rivalry for First Business Financial Services, Inc. is high due to the presence of multiple competitors and the need to differentiate itself in the market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 0.00%
Debt Cost 7.92%
Equity Weight 100.00%
Equity Cost 7.92%
WACC 7.92%
Leverage 0.00%

11. Quality Control: First Business Financial Services, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Value: 7.2

Growth: 9.3

Quality: 7.1

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Momentum: 9.0

Volatility: 6.7

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First Business Financial Services

A-Score: 6.5/10

Value: 7.1

Growth: 7.9

Quality: 5.3

Yield: 4.0

Momentum: 7.0

Volatility: 7.7

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Value: 5.4

Growth: 6.4

Quality: 6.4

Yield: 6.0

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Quality: 7.0

Yield: 6.0

Momentum: 5.0

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Value: 7.6

Growth: 7.2

Quality: 8.2

Yield: 4.0

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Financial Institutions

A-Score: 5.9/10

Value: 6.4

Growth: 3.6

Quality: 3.8

Yield: 9.0

Momentum: 6.0

Volatility: 6.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

54.22$

Current Price

54.22$

Potential

-0.00%

Expected Cash-Flows