First Business (NASDAQ: FBIZ) grows Q1 2026 loans, TBV and declares $0.34 dividend
Rhea-AI Filing Summary
First Business Financial Services, Inc. reported first quarter 2026 diluted EPS of $1.44 on net income available to common shareholders of $11.98 million, up from $10.95 million a year earlier. Loans rose 9.9% year-over-year to $3.50 billion and core deposits grew 13.5% to $2.80 billion, supporting a 3.56% net interest margin and 13.55% return on average tangible common equity.
The board declared a quarterly common dividend of $0.34 per share, a 24% payout of first quarter EPS, and maintained dividends on 7% Series A preferred stock. Tangible book value per share increased 13.6% year-over-year to $42.68, while non-performing assets were $40.5 million, or 0.94% of total assets, down from 1.07% in the prior quarter. The company also announced that David R. Seiler will become President and Chief Executive Officer effective May 3, 2026, succeeding Corey A. Chambas.
Positive
- None.
Negative
- None.
Insights
Solid Q1 growth with stable margin, modestly higher credit costs.
First Business Bank delivered Q1 2026 net income of $12.2 million and EPS of $1.44, up from $1.32 a year ago. Growth was driven by 9.9% year-over-year loan expansion to $3.50 billion and 13.5% core deposit growth to $2.80 billion, while net interest income rose 6.8% to $35.5 million.
Net interest margin held at 3.56% versus 3.69% last year, with management highlighting a 3.60%–3.65% long-term target and a 3.61% margin excluding fewer interest-earning days. Credit costs increased, with a $2.96 million provision and non-performing assets of $40.5 million, up from $24.1 million a year ago but down from the prior quarter after selling part of a large CRE non-accrual.
Capital and shareholder returns remain notable: tangible book value per share rose 13.6% year-over-year to $42.68, and the quarterly common dividend was set at $0.34 per share, a 24% payout based on Q1 EPS. Subsequent disclosures and future quarters will show how loan growth, margin management, and resolution of the remaining $17.0 million nonperforming CRE relationship affect performance through the rest of 2026.
CEO transition appears orderly alongside ongoing strategic execution.
The board appointed David R. Seiler as President and Chief Executive Officer effective May 3, 2026, succeeding Corey A. Chambas whose retirement was announced earlier. This timing follows previously disclosed plans, suggesting a structured succession rather than an abrupt leadership change.
The company’s 2024–2028 plan targets at least 15% ROATCE and 10% annual tangible book value growth; Q1 2026 delivered 13.55% ROATCE and 13.6% tangible book value growth versus the prior year. Efficiency ratio was 61.14%, above the sub-60% long-term goal, indicating continued focus on operating discipline. Future filings may clarify how the new CEO prioritizes growth, efficiency, and risk management within these stated targets.
8-K Event Classification
Key Figures
Key Terms
net interest margin financial
provision for credit losses financial
non-performing assets financial
efficiency ratio financial
return on average tangible common equity financial
Earnings Snapshot
The company reiterated a long-term net interest margin target of 3.60%–3.65% and expects a 2026 effective tax rate between 16% and 18%.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, 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): |
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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) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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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:
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Trading |
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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 April 23, 2026, First Business Financial Services, Inc. (the “Company”) announced its earnings for the quarter ended March 31, 2026, as well as the declaration of a quarterly cash dividend on its common stock and 7% series A preferred stock. 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 April 23, 2026, 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 first quarter 2026 earnings call to be held at 1:00 p.m. Central time on April 24, 2026, 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:
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99.1 |
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Press release of the registrant dated April 23, 2026, containing financial information for its quarter ended March 31, 2026. |
99.2 |
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Supplemental earnings call slides |
104 |
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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.
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April 23, 2026 |
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FIRST BUSINESS FINANCIAL SERVICES, INC. |
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By: |
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/s/ Brian D. Spielmann |
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Name: |
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Brian D. Spielmann |
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Title: |
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Chief Financial Officer |
Exhibit 99.1
FIRST BUSINESS BANK ANNOUNCES FIRST QUARTER 2026 FINANCIAL RESULTS
-- Double-digit loan and deposit growth supports strong earnings and drives tangible book value expansion --
MADISON, Wis., April 23, 2026 (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 $12.0 million, or earnings per share ("EPS") of $1.44. This compares to net income available to common shareholders of $13.1 million, or $1.58 per share, in the fourth quarter of 2025 and $11.0 million, or $1.32 per share, in the first quarter of 2025.
"Our strong first quarter performance underscores the effectiveness of First Business Bank’s strategy,” said Corey Chambas, Chief Executive Officer. “We delivered broad-based growth, with loans and core deposits increasing 15% and 18%, respectively, exhibiting our team's success in driving exceptional levels of new client acquisition. Our higher-yielding C&I lending portfolios accounted for two-thirds of the late-quarter loan growth and should provide meaningful support to net interest margin going forward. Growth in non-interest income further reinforced the benefits of our diversified revenue model. Additionally, we made progress toward resolving our largest non-performing CRE credit, contributing to an 8% decline in non-accrual loans during the quarter. Our momentum in the first quarter positions us to achieve our full-year target of 10% growth and above-average shareholder returns while maintaining disciplined risk management."
Quarterly Highlights
1
Quarterly Financial Results
(Unaudited) |
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As of and for the Three Months Ended |
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(Dollars in thousands, except per share amounts) |
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March 31, |
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December 31, |
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March 31, |
Net interest income |
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$35,518 |
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$34,762 |
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$33,258 |
Adjusted non-interest income (1) |
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8,775 |
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7,461 |
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7,579 |
Operating revenue (1) |
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44,293 |
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42,223 |
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40,837 |
Operating expense (1) |
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27,081 |
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23,901 |
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24,617 |
Pre-tax, pre-provision adjusted earnings (1) |
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17,212 |
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18,322 |
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16,220 |
Less: |
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Provision for credit losses |
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2,960 |
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1,855 |
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2,659 |
Loss on repossessed assets |
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— |
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— |
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(8) |
SBA recourse benefit |
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(121) |
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— |
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— |
(Recovery) impairment of tax credit investments |
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(7) |
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229 |
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110 |
Income before income tax expense |
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14,380 |
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16,238 |
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13,459 |
Income tax expense |
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2,180 |
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2,905 |
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2,288 |
Net income |
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$12,200 |
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$13,333 |
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$11,171 |
Preferred stock dividends |
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219 |
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219 |
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219 |
Net income available to common shareholders |
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$11,981 |
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$13,114 |
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$10,952 |
Earnings per share, diluted |
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$1.44 |
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$1.58 |
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$1.32 |
Book value per share |
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$44.12 |
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$43.19 |
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$39.04 |
Tangible book value per share (1) |
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$42.68 |
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$41.75 |
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$37.58 |
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Net interest margin (2) |
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3.56% |
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3.53% |
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3.69% |
Fee income ratio (non-interest income / total revenue) |
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19.81% |
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17.67% |
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18.56% |
Efficiency ratio (1) |
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61.14% |
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56.61% |
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60.28% |
Return on average assets (2) |
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1.13% |
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1.25% |
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1.14% |
Return on average tangible common equity (2) |
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13.55% |
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14.83% |
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14.12% |
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Period-end loans and leases receivable |
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$3,498,903 |
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$3,373,241 |
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$3,184,400 |
Average loans and leases receivable |
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$3,425,751 |
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$3,363,752 |
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$3,185,796 |
Period-end core deposits |
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$2,796,059 |
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$2,673,003 |
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$2,462,695 |
Average core deposits |
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$2,848,601 |
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$2,765,730 |
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$2,362,894 |
Allowance for credit losses, including unfunded commitment reserves |
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$38,489 |
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$37,692 |
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$36,515 |
Non-performing assets |
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$40,503 |
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$43,855 |
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$24,092 |
Allowance for credit losses as a percent of total gross loans and leases |
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1.10% |
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1.12% |
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1.15% |
Non-performing assets as a percent of total assets |
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0.94% |
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1.07% |
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0.61% |
2
First Quarter 2026 Compared to Fourth Quarter 2025
Net interest income increased $756,000, or 2.2%, to $35.5 million.
The Bank reported provision for credit losses of $3.0 million compared to $1.9 million in the linked quarter. The current quarter provision primarily reflects net charge-offs and loan growth, partially offset by a decrease in general reserve qualitative factors. See the Provision for Credit Loss breakdown table below for more detail.
Non-interest income increased $1.3 million, or 17.6%, to $8.8 million.
3
Non-interest expense increased $2.8 million, or 11.7%, to $27.0 million, while operating expense increased $3.2 million, or 13.3%, to $27.1 million.
Income tax expense decreased $725,000 to $2.2 million. The effective tax rate was 15.2% for the three months ended March 31, 2026, compared to 17.9% for the linked quarter. The change in tax expense reflects updated tax credit partnership estimates and timing of stock compensation vesting activity. The Company expects to report an effective tax rate between 16% and 18% for 2026.
Total period-end loans and leases receivable increased $125.9 million, or 14.9% annualized, to $3.501 billion. The average rate earned on average loans and leases receivable was 6.57%, down 20 basis points from 6.77% in the prior quarter. Excluding the non-accrual interest activity in both periods, the average rate earned on average loans and leases was 6.57% compared to 6.87% in the prior quarter.
Total period-end core deposits increased $123.1 million, or 18.4% annualized, to $2.796 billion. The average rate paid was 2.41%, down 23 basis points from 2.64% in the prior quarter primarily due to a decrease in short-term market rates.
Period-end wholesale funding, including FHLB advances and brokered deposits, increased $113.9 million, or 12.6%, to $1.019 billion, driven primarily by liquidity management considerations. The increase also supported interest rate risk management through match-funding of fixed-rate assets to enhance funding flexibility and help stabilize net interest margin.
Non-performing assets decreased $3.4 million to $40.5 million, or 0.94% of total assets, compared to 1.07% in the prior quarter. The decline was primarily due to the sale at par of a land development CRE non-accrual loan within a previously identified Southeast Wisconsin-based client relationship.
The allowance for credit losses, including the unfunded credit commitments reserve, increased $797,000, or 2.1%, primarily due to increases in general reserves due to loan growth, an increase in specific reserves, and a decline in the economic outlook in our model forecast, partially offset by a decrease in qualitative risk factors. The allowance for credit losses, including unfunded credit commitment reserves, as a percent of total gross loans and leases was 1.10% compared to 1.12% in the prior quarter.
4
First Quarter 2026 Compared to First Quarter 2025
Net interest income increased $2.3 million, or 6.8%, to $35.5 million.
The Company reported provision for credit losses of $3.0 million, compared to $2.7 million in the first quarter of 2025. See the Provision for Credit Loss breakdown table below for more detail.
Non-interest income increased $1.2 million, or 15.8%, to $8.8 million.
Non-interest expense increased $2.2 million, or 9.0%, to $27.0 million. Operating expense increased $2.5 million or 10.0%, to $27.1 million.
Total period-end loans and leases receivable increased $315.9 million, or 9.9%, to $3.501 billion. The average yield decreased 37 basis points to 6.57%, primarily due to a decrease in short-term market rates.
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Total period-end core deposits grew $333.4 million, or 13.5%, to $2.796 billion. The average rate paid decreased 30 basis points to 2.41%, reflecting a decrease in short-term market rates.
Period-end wholesale funding increased $6.3 million, or 0.6%, to $1.019 billion.
Non-performing assets increased to $40.5 million, or 0.94% of total assets, from $24.1 million, or 0.61% 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, as well as lower non-accrual balances from equipment finance loans and SBA loans.
The allowance for credit losses, including unfunded commitment reserves, increased $2.0 million to $38.5 million primarily due to higher general reserves as a result of loan growth and quantitative factors, partially offset by lower specific reserves. The allowance for credit losses as a percent of total gross loans and leases was 1.10%, compared with 1.15% in the prior year.
Dividend Announced
On April 23, 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 2.37% based on the market close price of $57.27 on Wednesday, April 22, 2026. The quarterly dividend is the same as the quarterly dividend declared in January 2026, and based on first quarter 2026 earnings per share, this represents a dividend payout ratio of 24%. This regular cash dividend is payable on May 20, 2026, to shareholders of record at the close of business on May 6, 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 June 15, 2026, to shareholders of record on May 29, 2026.
6
2026 CEO Succession Plan
On April 15, 2026, the Board of Directors of First Business Financial Services, Inc. (the “Company”) appointed David R. Seiler as President and Chief Executive Officer of the Company, effective May 3, 2026. Mr. Seiler will succeed Corey A. Chambas, whose retirement from his role as the Company’s Chief Executive Officer was announced in May 2025.
Earnings Release Supplement and Conference Call
On April 23, 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 April 23, 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 first quarter 2026 earnings call to be held at 1:00 p.m. Central time on April 24, 2026. The conference call can be accessed at 800-715-9871 (646-307-1963) if outside the United States and Canada), using the conference call access code: FBIZ, 2129267. Investors may also listen live via webcast at: https://events.q4inc.com/attendee/805218265. A replay of the call will be available through Friday, May 1, 2026, by calling 800-770-2030 (609-800-9909 if outside the United States and Canada). 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:
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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.
CONTACT: |
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First Business Financial Services, Inc. |
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Brian D. Spielmann |
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Chief Financial Officer |
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608-232-5977 |
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bspielmann@firstbusiness.bank |
8
SELECTED FINANCIAL CONDITION DATA
(Unaudited) |
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As of |
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(in thousands) |
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March 31, |
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December 31, |
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September 30, |
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June 30, |
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March 31, |
Assets |
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Cash and cash equivalents |
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$137,125 |
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$39,485 |
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$44,349 |
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$123,208 |
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$170,617 |
Securities available-for-sale, at fair value |
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420,325 |
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422,087 |
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411,111 |
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382,365 |
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359,394 |
Securities held-to-maturity, at amortized cost |
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4,797 |
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5,210 |
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5,584 |
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5,714 |
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6,590 |
Loans held for sale |
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23,700 |
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18,849 |
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13,482 |
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12,415 |
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10,523 |
Loans and leases receivable |
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3,498,903 |
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3,373,241 |
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3,334,956 |
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3,250,925 |
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3,184,400 |
Allowance for credit losses |
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(36,631) |
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(35,877) |
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(36,690) |
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(36,861) |
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(35,236) |
Loans and leases receivable, net |
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3,462,272 |
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3,337,364 |
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3,298,266 |
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3,214,064 |
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3,149,164 |
Premises and equipment, net |
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4,500 |
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4,669 |
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4,936 |
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5,063 |
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5,017 |
Repossessed assets |
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— |
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— |
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— |
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31 |
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36 |
Right-of-use assets |
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5,053 |
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5,317 |
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5,577 |
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5,713 |
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5,439 |
Bank-owned life insurance |
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84,776 |
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83,994 |
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83,255 |
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82,761 |
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57,647 |
Federal Home Loan Bank stock, at cost |
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11,242 |
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8,940 |
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9,605 |
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10,027 |
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10,434 |
Goodwill and other intangible assets |
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12,011 |
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11,985 |
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12,041 |
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12,049 |
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12,058 |
Derivatives |
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38,198 |
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36,515 |
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37,634 |
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40,814 |
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48,405 |
Accrued interest receivable and other assets |
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116,856 |
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107,472 |
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109,005 |
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108,501 |
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109,555 |
Total assets |
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$4,320,855 |
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$4,081,887 |
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$4,034,845 |
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$4,002,725 |
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$3,944,879 |
Liabilities and Stockholders’ Equity |
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Core deposits |
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$2,796,059 |
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$2,673,003 |
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$2,592,110 |
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$2,533,099 |
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$2,462,695 |
Wholesale deposits |
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769,943 |
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707,412 |
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740,961 |
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772,123 |
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780,348 |
Total deposits |
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3,566,002 |
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3,380,415 |
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3,333,071 |
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3,305,222 |
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3,243,043 |
Federal Home Loan Bank advances and |
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303,451 |
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252,051 |
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266,677 |
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276,131 |
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286,590 |
Lease liabilities |
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7,032 |
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7,361 |
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7,687 |
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7,887 |
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7,604 |
Derivatives |
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35,857 |
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36,926 |
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38,726 |
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41,228 |
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45,612 |
Accrued interest payable and other liabilities |
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28,433 |
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33,549 |
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30,365 |
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27,462 |
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25,967 |
Total liabilities |
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3,940,775 |
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3,710,302 |
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3,676,526 |
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3,657,930 |
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3,608,816 |
Total stockholders’ equity |
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380,080 |
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371,585 |
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358,319 |
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344,795 |
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336,063 |
Total liabilities and stockholders’ equity |
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$4,320,855 |
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$4,081,887 |
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$4,034,845 |
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$4,002,725 |
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$3,944,879 |
9
STATEMENTS OF INCOME
(Unaudited) |
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As of and for the Three Months Ended |
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(Dollars in thousands, except per share amounts) |
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March 31, |
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December 31, |
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September 30, |
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June 30, |
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March 31, |
Total interest income |
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$61,896 |
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$62,752 |
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$63,746 |
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$61,282 |
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$59,530 |
Total interest expense |
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26,378 |
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27,990 |
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28,860 |
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27,498 |
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26,272 |
Net interest income |
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35,518 |
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34,762 |
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34,886 |
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33,784 |
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33,258 |
Provision for credit losses |
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2,960 |
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1,855 |
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1,440 |
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2,701 |
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2,659 |
Net interest income after provision for credit losses |
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32,558 |
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32,907 |
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33,446 |
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31,083 |
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30,599 |
Private wealth management service fees |
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3,877 |
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3,788 |
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3,687 |
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3,748 |
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3,492 |
Gain on sale of SBA loans |
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592 |
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140 |
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382 |
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397 |
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963 |
Service charges on deposits |
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1,318 |
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1,188 |
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1,151 |
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1,103 |
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1,048 |
Loan fees |
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436 |
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410 |
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501 |
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424 |
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388 |
Bank owned life insurance income |
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757 |
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739 |
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965 |
|
615 |
|
437 |
Swap fees |
|
628 |
|
738 |
|
974 |
|
170 |
|
113 |
Other non-interest income |
|
1,167 |
|
458 |
|
1,980 |
|
798 |
|
1,138 |
Total non-interest income |
|
8,775 |
|
7,461 |
|
9,640 |
|
7,255 |
|
7,579 |
Compensation |
|
18,541 |
|
17,151 |
|
17,442 |
|
16,534 |
|
16,747 |
Occupancy |
|
588 |
|
581 |
|
567 |
|
564 |
|
590 |
Professional fees |
|
1,446 |
|
1,001 |
|
1,071 |
|
1,487 |
|
1,459 |
Data processing |
|
1,270 |
|
1,158 |
|
1,123 |
|
1,368 |
|
1,082 |
Marketing |
|
711 |
|
938 |
|
876 |
|
1,062 |
|
968 |
Equipment |
|
407 |
|
374 |
|
296 |
|
335 |
|
376 |
Computer software |
|
1,921 |
|
1,902 |
|
1,826 |
|
1,656 |
|
1,603 |
FDIC insurance |
|
909 |
|
800 |
|
817 |
|
834 |
|
780 |
Other non-interest expense |
|
1,160 |
|
225 |
|
1,682 |
|
1,128 |
|
1,114 |
Total non-interest expense |
|
26,953 |
|
24,130 |
|
25,700 |
|
24,968 |
|
24,719 |
Income before income tax expense |
|
14,380 |
|
16,238 |
|
17,386 |
|
13,370 |
|
13,459 |
Income tax expense |
|
2,180 |
|
2,905 |
|
2,993 |
|
1,948 |
|
2,288 |
Net income |
|
$12,200 |
|
$13,333 |
|
$14,393 |
|
$11,422 |
|
$11,171 |
Preferred stock dividends |
|
219 |
|
219 |
|
218 |
|
219 |
|
219 |
Net income available to common shareholders |
|
$11,981 |
|
$13,114 |
|
$14,175 |
|
$11,203 |
|
$10,952 |
Per common share: |
|
|
|
|
|
|
|
|
|
|
Basic earnings |
|
$1.44 |
|
$1.58 |
|
$1.70 |
|
$1.35 |
|
$1.32 |
Diluted earnings |
|
1.44 |
|
1.58 |
|
1.70 |
|
1.35 |
|
1.32 |
Dividends declared |
|
0.34 |
|
0.29 |
|
0.29 |
|
0.29 |
|
0.29 |
Book value |
|
44.12 |
|
43.19 |
|
41.60 |
|
39.98 |
|
39.04 |
Tangible book value |
|
42.68 |
|
41.75 |
|
40.16 |
|
38.54 |
|
37.58 |
Weighted-average common shares |
|
8,186,174 |
|
8,173,059 |
|
8,171,404 |
|
8,141,159 |
|
8,130,743 |
Weighted-average diluted common |
|
8,186,174 |
|
8,173,059 |
|
8,171,404 |
|
8,141,159 |
|
8,130,743 |
10
NET INTEREST INCOME ANALYSIS
(Unaudited) |
|
For the Three Months Ended |
||||||||||||||||
(Dollars in thousands) |
|
March 31, 2026 |
|
December 31, 2025 |
|
March 31, 2025 |
||||||||||||
|
|
Average |
|
Interest |
|
Average |
|
Average |
|
Interest |
|
Average |
|
Average |
|
Interest |
|
Average |
Interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate and |
|
$2,071,202 |
|
$30,216 |
|
5.84% |
|
$2,039,138 |
|
$31,063 |
|
6.09% |
|
$1,925,661 |
|
$29,886 |
|
6.21% |
Commercial and industrial |
|
1,306,970 |
|
25,409 |
|
7.78 |
|
1,280,406 |
|
25,222 |
|
7.88 |
|
1,212,656 |
|
24,727 |
|
8.16 |
Consumer and other loans(1) |
|
47,579 |
|
683 |
|
5.74 |
|
44,208 |
|
631 |
|
5.71 |
|
47,479 |
|
661 |
|
5.57 |
Total loans and leases |
|
3,425,751 |
|
56,308 |
|
6.57 |
|
3,363,752 |
|
56,916 |
|
6.77 |
|
3,185,796 |
|
55,274 |
|
6.94 |
Mortgage-related securities(2) |
|
375,989 |
|
3,965 |
|
4.22 |
|
366,158 |
|
3,894 |
|
4.25 |
|
308,656 |
|
3,195 |
|
4.14 |
Other investment securities(3) |
|
50,146 |
|
280 |
|
2.23 |
|
49,716 |
|
282 |
|
2.27 |
|
43,145 |
|
209 |
|
1.94 |
FHLB stock |
|
9,067 |
|
211 |
|
9.31 |
|
8,614 |
|
202 |
|
9.38 |
|
13,623 |
|
294 |
|
8.63 |
Short-term investments |
|
128,649 |
|
1,132 |
|
3.52 |
|
145,425 |
|
1,458 |
|
4.01 |
|
51,072 |
|
558 |
|
4.37 |
Total interest-earning assets |
|
3,989,602 |
|
61,896 |
|
6.21 |
|
3,933,665 |
|
62,752 |
|
6.38 |
|
3,602,292 |
|
59,530 |
|
6.61 |
Non-interest-earning assets |
|
259,039 |
|
|
|
|
|
247,676 |
|
|
|
|
|
240,076 |
|
|
|
|
Total assets |
|
$4,248,641 |
|
|
|
|
|
$4,181,341 |
|
|
|
|
|
$3,842,368 |
|
|
|
|
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction accounts |
|
$1,220,945 |
|
8,354 |
|
2.74% |
|
$1,108,916 |
|
$8,357 |
|
3.01% |
|
$927,250 |
|
$7,412 |
|
3.20% |
Money market |
|
925,282 |
|
6,354 |
|
2.75 |
|
920,194 |
|
7,002 |
|
3.04 |
|
831,598 |
|
6,751 |
|
3.25 |
Certificates of deposit |
|
273,635 |
|
2,447 |
|
3.58 |
|
299,349 |
|
2,907 |
|
3.88 |
|
189,547 |
|
1,861 |
|
3.93 |
Wholesale deposits |
|
682,138 |
|
6,773 |
|
3.97 |
|
725,607 |
|
7,330 |
|
4.04 |
|
694,431 |
|
6,992 |
|
4.03 |
Total interest-bearing |
|
3,102,000 |
|
23,928 |
|
3.09 |
|
3,054,066 |
|
25,596 |
|
3.35 |
|
2,642,826 |
|
23,016 |
|
3.48 |
FHLB advances |
|
200,132 |
|
1,567 |
|
3.13 |
|
189,900 |
|
1,510 |
|
3.18 |
|
305,549 |
|
2,374 |
|
3.11 |
Other borrowings |
|
54,815 |
|
883 |
|
6.44 |
|
54,787 |
|
883 |
|
6.45 |
|
54,708 |
|
882 |
|
6.45 |
Total interest-bearing |
|
3,356,947 |
|
26,378 |
|
3.14 |
|
3,298,753 |
|
27,989 |
|
3.39 |
|
3,003,083 |
|
26,272 |
|
3.50 |
Non-interest-bearing demand |
|
428,739 |
|
|
|
|
|
437,271 |
|
|
|
|
|
414,499 |
|
|
|
|
Other non-interest-bearing |
|
85,304 |
|
|
|
|
|
79,505 |
|
|
|
|
|
90,683 |
|
|
|
|
Total liabilities |
|
3,870,990 |
|
|
|
|
|
3,815,529 |
|
|
|
|
|
3,508,265 |
|
|
|
|
Stockholders’ equity |
|
377,651 |
|
|
|
|
|
365,812 |
|
|
|
|
|
334,103 |
|
|
|
|
Total liabilities and |
|
$4,248,641 |
|
|
|
|
|
$4,181,341 |
|
|
|
|
|
$3,842,368 |
|
|
|
|
Net interest income |
|
|
|
$35,518 |
|
|
|
|
|
$34,763 |
|
|
|
|
|
$33,258 |
|
|
Interest rate spread |
|
|
|
|
|
3.06% |
|
|
|
|
|
2.99% |
|
|
|
|
|
3.11% |
Net interest-earning assets |
|
$632,655 |
|
|
|
|
|
$634,912 |
|
|
|
|
|
$599,209 |
|
|
|
|
Net interest margin |
|
|
|
|
|
3.56% |
|
|
|
|
|
3.53% |
|
|
|
|
|
3.69% |
11
BETA ANALYSIS
|
|
For the Three Months Ended |
||||||||
(Unaudited) |
|
March 31, 2026 |
|
December 31, 2025 |
|
|
|
March 31, 2025 |
|
|
|
|
Average Yield/Rate(3) |
|
Average Yield/Rate(3) |
|
Increase (Decrease) |
|
Average Yield/Rate(3) |
|
Increase (Decrease) |
Total loans and leases(1) |
|
6.57% |
|
6.87% |
|
(0.31)% |
|
6.94% |
|
(0.37)% |
Total interest-earning assets(b)(1) |
|
6.20% |
|
6.47% |
|
(0.27)% |
|
6.61% |
|
(0.41)% |
Total core deposits(e) |
|
2.41% |
|
2.64% |
|
(0.23)% |
|
2.71% |
|
(0.30)% |
Total bank funding(f) |
|
2.73% |
|
2.95% |
|
(0.22)% |
|
3.02% |
|
(0.29)% |
Net interest margin(g)(1) |
|
3.56% |
|
3.63% |
|
(0.07)% |
|
3.69% |
|
(0.14)% |
|
|
|
|
|
|
|
|
|
|
|
Effective fed funds rate (2)(i) |
|
3.64% |
|
3.90% |
|
(0.26)% |
|
4.33% |
|
(0.69)% |
|
|
|
|
|
|
|
|
|
|
|
Beta Calculations: |
|
|
|
|
|
|
|
|
|
|
Total loans and leases |
|
|
|
|
|
117.9% |
|
|
|
53.8% |
Total interest-earning assets(b)/(i) |
|
|
|
|
|
104.6% |
|
|
|
59.3% |
Total core deposits(e/i) |
|
|
|
|
|
89.1% |
|
|
|
43.5% |
Total bank funding(f)/(i) |
|
|
|
|
|
82.8% |
|
|
|
42.0% |
Net interest margin(g/i) |
|
|
|
|
|
27.1% |
|
|
|
19.8% |
PROVISION FOR CREDIT LOSS COMPOSITION
(Unaudited) |
|
For the Three Months Ended |
||||||||
(Dollars in thousands) |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
Change due to qualitative factors |
|
$(706) |
|
$(538) |
|
$(243) |
|
$590 |
|
$(355) |
Change due to quantitative factors |
|
10 |
|
(607) |
|
(173) |
|
746 |
|
1,560 |
Charge-offs |
|
2,331 |
|
2,809 |
|
1,708 |
|
1,338 |
|
3,810 |
Recoveries |
|
(168) |
|
(264) |
|
(440) |
|
(332) |
|
(398) |
Change in reserves on individually |
|
382 |
|
(76) |
|
(550) |
|
(247) |
|
(2,495) |
Change due to loan growth, net |
|
1,068 |
|
408 |
|
795 |
|
536 |
|
741 |
Change in unfunded commitment |
|
43 |
|
123 |
|
343 |
|
70 |
|
(204) |
Total provision for credit losses |
|
$2,960 |
|
$1,855 |
|
$1,440 |
|
$2,701 |
|
$2,659 |
ALLOWANCE FOR CREDIT LOSS COMPOSITION
|
|
As of |
||||||||||||||
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
||||||||
|
|
(In Thousands) |
|
% of Total |
|
(In Thousands) |
|
% of Total |
|
(In Thousands) |
|
% of Total |
|
(In Thousands) |
|
% of Total |
Allowance for credit losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans collectively evaluated |
|
$30,700 |
|
0.88% |
|
$30,327 |
|
0.90% |
|
$31,065 |
|
0.93% |
|
$30,685 |
|
0.94% |
Loans individually evaluated |
|
5,931 |
|
0.17% |
|
5,550 |
|
0.16% |
|
5,625 |
|
0.17% |
|
6,176 |
|
0.19% |
Unfunded commitments reserve |
|
1,858 |
|
|
|
1,815 |
|
|
|
1,692 |
|
|
|
1,349 |
|
|
Total |
|
38,489 |
|
1.10% |
|
37,692 |
|
1.12% |
|
38,382 |
|
1.15% |
|
38,210 |
|
1.18% |
Loans and lease receivables: |
|
$3,498,903 |
|
|
|
$3,373,241 |
|
|
|
$3,334,956 |
|
|
|
$3,250,925 |
|
|
12
PERFORMANCE RATIOS
|
|
For the Three Months Ended |
||||||||
(Unaudited) |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
Return on average assets (annualized) |
|
1.13% |
|
1.25% |
|
1.40% |
|
1.14% |
|
1.14% |
Return on average tangible common equity (annualized) |
|
13.55% |
|
14.83% |
|
17.29% |
|
14.17% |
|
14.13% |
Efficiency ratio |
|
61.14% |
|
56.61% |
|
57.44% |
|
60.97% |
|
60.28% |
Interest rate spread |
|
3.06% |
|
2.99% |
|
3.11% |
|
3.10% |
|
3.11% |
Net interest margin |
|
3.56% |
|
3.53% |
|
3.68% |
|
3.67% |
|
3.69% |
Average interest-earning assets to average interest-bearing liabilities |
|
118.85% |
|
119.25% |
|
118.66% |
|
118.94% |
|
119.95% |
ASSET QUALITY RATIOS
(Unaudited) |
|
As of |
||||||||
(Dollars in thousands) |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
Non-accrual loans and leases |
|
$40,503 |
|
$43,855 |
|
$23,513 |
|
$28,633 |
|
$24,056 |
Repossessed assets |
|
0 |
|
0 |
|
0 |
|
31 |
|
36 |
Total non-performing assets |
|
$40,503 |
|
$43,855 |
|
$23,513 |
|
$28,664 |
|
$24,092 |
Non-accrual loans and leases as a |
|
1.16% |
|
1.30% |
|
0.70% |
|
0.88% |
|
0.76% |
Non-performing assets as a percent of |
|
1.16% |
|
1.30% |
|
0.70% |
|
0.88% |
|
0.76% |
Non-performing assets as a percent of |
|
0.94% |
|
1.07% |
|
0.58% |
|
0.72% |
|
0.61% |
Allowance for credit losses as a percent |
|
1.10% |
|
1.12% |
|
1.15% |
|
1.18% |
|
1.15% |
Allowance for credit losses as a percent |
|
95.03% |
|
85.95% |
|
163.24% |
|
133.45% |
|
151.79% |
NET CHARGE-OFFS (RECOVERIES)
(Unaudited) |
|
For the Three Months Ended |
||||||||
(Dollars in thousands) |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
Charge-offs |
|
$2,331 |
|
$2,809 |
|
$1,708 |
|
$1,338 |
|
$3,810 |
Recoveries |
|
(168) |
|
(264) |
|
(440) |
|
(332) |
|
(398) |
Net charge-offs (recoveries) |
|
$2,163 |
|
$2,545 |
|
$1,268 |
|
$1,006 |
|
$3,412 |
Net charge-offs (recoveries) as a percent of average gross loans and leases (annualized) |
|
0.25% |
|
0.30% |
|
0.15% |
|
0.12% |
|
0.43% |
CAPITAL RATIOS
|
|
As of and for the Three Months Ended |
||||||||
(Unaudited) |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
Total capital to risk-weighted assets |
|
12.15% |
|
12.24% |
|
12.18% |
|
12.25% |
|
12.20% |
Tier I capital to risk-weighted assets |
|
9.74% |
|
9.79% |
|
9.67% |
|
9.66% |
|
9.60% |
Common equity tier I capital to risk- |
|
9.43% |
|
9.48% |
|
9.34% |
|
9.33% |
|
9.26% |
Tier I capital to adjusted assets |
|
8.93% |
|
8.86% |
|
8.87% |
|
8.82% |
|
8.77% |
Tangible common equity to tangible |
|
8.26% |
|
8.54% |
|
8.31% |
|
8.04% |
|
7.93% |
13
LOAN AND LEASE RECEIVABLE COMPOSITION
(Unaudited) |
|
As of |
||||||||
(in thousands) |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
Commercial real estate - owner occupied |
|
$306,593 |
|
$293,706 |
|
$287,005 |
|
$262,988 |
|
$258,050 |
Commercial real estate - non-owner occupied |
|
925,425 |
|
885,870 |
|
871,807 |
|
846,990 |
|
838,634 |
Construction and land development |
|
224,866 |
|
248,560 |
|
236,590 |
|
218,840 |
|
215,613 |
Multi-family |
|
577,271 |
|
571,468 |
|
565,102 |
|
573,208 |
|
549,220 |
1-4 family |
|
61,332 |
|
60,661 |
|
66,735 |
|
45,171 |
|
48,450 |
Total commercial real estate |
|
2,095,487 |
|
2,060,265 |
|
2,027,239 |
|
1,947,197 |
|
1,909,967 |
Commercial and industrial |
|
1,358,413 |
|
1,273,997 |
|
1,264,111 |
|
1,259,171 |
|
1,229,098 |
Consumer and other |
|
47,223 |
|
40,965 |
|
45,323 |
|
45,744 |
|
46,190 |
Total gross loans and leases receivable |
|
3,501,123 |
|
3,375,227 |
|
3,336,673 |
|
3,252,112 |
|
3,185,255 |
Less: |
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses |
|
36,631 |
|
35,877 |
|
36,690 |
|
36,861 |
|
35,236 |
Deferred loan fees |
|
2,220 |
|
1,986 |
|
1,717 |
|
1,187 |
|
855 |
Loans and leases receivable, net |
|
$3,462,272 |
|
$3,337,364 |
|
$3,298,266 |
|
$3,214,064 |
|
$3,149,164 |
DEPOSIT COMPOSITION
(Unaudited) |
|
As of |
||||||||
(in thousands) |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
Non-interest-bearing transaction accounts |
|
$405,281 |
|
$378,770 |
|
$400,697 |
|
$396,448 |
|
$433,201 |
Interest-bearing transaction accounts |
|
1,170,271 |
|
1,103,696 |
|
1,050,233 |
|
1,047,434 |
|
1,015,846 |
Money market accounts |
|
960,052 |
|
905,773 |
|
840,477 |
|
833,684 |
|
831,897 |
Certificates of deposit |
|
260,455 |
|
284,764 |
|
300,703 |
|
255,533 |
|
181,751 |
Wholesale deposits |
|
769,943 |
|
707,412 |
|
740,961 |
|
772,123 |
|
780,348 |
Total deposits |
|
$3,566,002 |
|
$3,380,415 |
|
$3,333,071 |
|
$3,305,222 |
|
$3,243,043 |
|
|
|
|
|
|
|
|
|
|
|
Uninsured deposits |
|
$1,237,344 |
|
$1,220,177 |
|
$1,100,868 |
|
$1,069,509 |
|
$1,055,347 |
Less: uninsured deposits collateralized by pledged assets |
|
59,613 |
|
68,656 |
|
72,561 |
|
67,990 |
|
9,344 |
Total uninsured, net of collateralized deposits |
|
$1,177,731 |
|
$1,151,521 |
|
$1,028,307 |
|
$1,001,519 |
|
$1,046,003 |
% of total deposits |
|
33.0% |
|
34.1% |
|
30.9% |
|
30.3% |
|
32.3% |
SOURCES OF LIQUIDITY
(Unaudited) |
|
As of |
||||||||
(in thousands) |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
Short-term investments |
|
$104,565 |
|
$8,714 |
|
$8,074 |
|
$72,520 |
|
$136,033 |
Collateral value of unencumbered pledged loans |
|
968,320 |
|
992,398 |
|
906,042 |
|
893,499 |
|
973,494 |
Market value of unencumbered securities |
|
387,700 |
|
388,474 |
|
376,783 |
|
347,196 |
|
324,365 |
Readily accessible liquidity |
|
1,460,585 |
|
1,389,586 |
|
1,290,899 |
|
1,313,215 |
|
1,433,892 |
|
|
|
|
|
|
|
|
|
|
|
Fed fund lines |
|
45,000 |
|
45,000 |
|
45,000 |
|
45,000 |
|
45,000 |
Excess brokered CD capacity(1) |
|
806,268 |
|
775,851 |
|
732,951 |
|
645,843 |
|
477,468 |
Total liquidity |
|
$2,311,853 |
|
$2,210,437 |
|
$2,068,850 |
|
$2,004,058 |
|
$1,956,360 |
Total uninsured, net of collateralized deposits |
|
$1,177,731 |
|
$1,151,521 |
|
$1,028,307 |
|
$1,001,519 |
|
$1,046,003 |
PRIVATE WEALTH OFF-BALANCE SHEET COMPOSITION
(Unaudited) |
|
As of |
||||||||
(in thousands) |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
Trust assets under management |
|
$3,613,536 |
|
$3,541,768 |
|
$3,543,594 |
|
$3,461,659 |
|
$3,184,197 |
Trust assets under administration |
|
267,214 |
|
272,910 |
|
270,222 |
|
268,996 |
|
240,366 |
Total trust assets |
|
$3,880,750 |
|
$3,814,678 |
|
$3,813,816 |
|
$3,730,655 |
|
$3,424,563 |
14
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) |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
Common stockholders’ equity |
|
$368,088 |
|
$359,593 |
|
$346,327 |
|
$332,803 |
|
$324,071 |
Less: Goodwill and other intangible assets |
|
(12,011) |
|
(11,985) |
|
(12,041) |
|
(12,049) |
|
(12,058) |
Tangible common equity |
|
$356,077 |
|
$347,608 |
|
$334,286 |
|
$320,754 |
|
$312,013 |
Common shares outstanding |
|
8,343,519 |
|
8,325,376 |
|
8,324,387 |
|
8,323,470 |
|
8,301,967 |
Book value per share |
|
$44.12 |
|
$43.19 |
|
$41.60 |
|
$39.98 |
|
$39.04 |
Tangible book value per share |
|
$42.68 |
|
$41.75 |
|
$40.16 |
|
$38.54 |
|
$37.58 |
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, 2025. 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) |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
Common stockholders’ equity |
|
$368,088 |
|
$359,593 |
|
$346,327 |
|
$332,803 |
|
$324,071 |
Less: Goodwill and other intangible assets |
|
(12,011) |
|
(11,985) |
|
(12,041) |
|
(12,049) |
|
(12,058) |
Tangible common equity (a) |
|
$356,077 |
|
$347,608 |
|
$334,286 |
|
$320,754 |
|
$312,013 |
Total assets |
|
$4,320,855 |
|
$4,081,887 |
|
$4,034,845 |
|
$4,002,725 |
|
$3,944,879 |
Less: Goodwill and other intangible assets |
|
(12,011) |
|
(11,985) |
|
(12,041) |
|
(12,049) |
|
(12,058) |
Tangible assets (b) |
|
$4,308,844 |
|
$4,069,902 |
|
$4,022,804 |
|
$3,990,676 |
|
$3,932,821 |
Tangible common equity to tangible assets |
|
8.26% |
|
8.54% |
|
8.31% |
|
8.04% |
|
7.93% |
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 |
||||||||
(Dollars in thousands) |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
Total non-interest expense |
|
$26,953 |
|
$24,130 |
|
$25,700 |
|
$24,968 |
|
$24,719 |
Less: |
|
|
|
|
|
|
|
|
|
|
Net (gain) loss on repossessed assets |
|
— |
|
— |
|
31 |
|
4 |
|
(8) |
(Recovery) impairment of tax credit investments |
|
(7) |
|
229 |
|
— |
|
— |
|
110 |
Contribution to First Business Charitable Foundation |
|
— |
|
— |
|
234 |
|
— |
|
— |
SBA recourse provision (benefit) |
|
(121) |
|
— |
|
(5) |
|
(59) |
|
— |
Total operating expense (a) |
|
$27,081 |
|
$23,901 |
|
$25,440 |
|
$25,023 |
|
$24,617 |
Net interest income |
|
$35,518 |
|
$34,762 |
|
$34,886 |
|
$33,784 |
|
$33,258 |
Total non-interest income |
|
8,775 |
|
7,461 |
|
9,640 |
|
7,255 |
|
7,579 |
Less: |
|
|
|
|
|
|
|
|
|
|
Bank owned life insurance claim |
|
— |
|
— |
|
234 |
|
— |
|
— |
Adjusted non-interest income |
|
8,775 |
|
7,461 |
|
9,406 |
|
7,255 |
|
7,579 |
Total operating revenue (b) |
|
$44,293 |
|
$42,223 |
|
$44,292 |
|
$41,039 |
|
$40,837 |
Efficiency ratio |
|
61.14% |
|
56.61% |
|
57.44% |
|
60.97% |
|
60.28% |
|
|
|
|
|
|
|
|
|
|
|
Pre-tax, pre-provision adjusted earnings (b - a) |
|
$17,212 |
|
$18,322 |
|
$18,852 |
|
$16,016 |
|
$16,220 |
16
NASDAQ: FBIZ Earnings Release Supplement First Quarter 2026
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, 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 of otherwise result in market volatility; (ii) 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; (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 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, 2025 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 2026 Tangible Book Value Per Share1 +14% YOY Fee Income +18% Non-interest income grew 17.6% from the linked quarter and 15.8% year-over-year, reflecting ongoing success of revenue diversification efforts. Core Deposits +18% Core deposits grew 18.4% from the linked quarter and 13.5% year-over-year. Core deposit funding mix improved to 73.3% from 70.9% in the prior-year quarter. Loans +15% NIM 3.56% NIM was 3.56% compared to 3.53% in 4Q25. Excluding the impact of fewer accrual days in the first quarter, 1Q26 NIM was 3.61%. NPAs/TAs -13bps NPAs decreased $3.4 million to $40.5 million, or 0.94% of total assets, compared to 1.07% for 4Q25. Improvement reflects the 1Q26 sale of a portion of the CRE NPA that was downgraded in 4Q25. PTPP Earnings +6% Continued growth in loans, core deposits, and diversified fee income sources drove 6.1% year-over-year growth in pre-tax, pre-provision earnings1 and 9.4% growth in net income. Loans grew 14.9% from the linked quarter and 9.9% year-over-year. 1. PTPP earnings and tangible book value per share are non-GAAP measurements. Refer to the section entitled Non-GAAP Reconciliations in the Company’s Q1 earnings release for additional detail. Note: Linked quarter growth rates for loans and core deposits are annualized.
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 Niche lending businesses provide support across various economic cycles Goal is 10% annual deposit and loan growth core deposit growth supports loan growth +18% LQA +14% YOY +15% LQA +10% YOY
Diversified Lending Growth Continuing To Grow Higher-Yielding C&I PORTFOLIO 2023-2025 3-Year Loan CAGR C&I = 18% CRE & Other = 10% C&I comprised 67% of 1Q26 loan growth 1Q26 loan growth predominantly occurred late in the quarter, limiting the yield benefit in the first quarter.
Strong and Resilient Net Interest Margin Wholesale funding defined as brokered CDs and non‐reciprocal interest‐bearing transaction accounts plus FHLB advances. Note: Peer group defined as publicly‐traded bank with total assets between $1.75 billion and $7 billion. Peer data not yet available for 1Q26. MATCH FUNDING STRATEGY SUPPORTS Long-term NIM stability 1Q26 and 1Q25 NIM include 5bp of impact due to fewer accrual days in the first quarter Excluding this impact, 1Q26 NIM was 3.61% and 1Q25 was 3.74% 4Q25 NIM includes 10bp of compression due to non-accrual interest reversals
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. 60% of portfolio as of 3/31/26: METHODICAL APPROACH Typically 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: $1.633 B SOFR: $831 MM Prime: $468 MM Managed rate, non‐maturity: $1.331 B TOTAL = $2.101 B TOTAL = $2.162 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. 40% of portfolio as of 3/31/26.
Match Funded Balance Sheet Unique Among Peers Note: Peer group defined as publicly‐traded bank with total assets between $1.75 billion and $7 billion.
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 comprised 46% of Q1 26 TTM non‐interest income Strategic investments drive growth while maintaining positive long‐term operating leverage 1. Operating Revenue is a non-GAAP measurement. Refer to the section entitled Non-GAAP reconciliations in the Company’s Q1 2026 earnings release. Balanced and Steady Growth DIVERSIFIED REVENUE SOURCES Operating Revenue1 +9% TTM Q1 26 vs TTM Q1 25
FBIZ’s average loss rate since 2005 is approximately one-third of industry rate *Industry reflects all FDIC-insured depositories Source: FDIC.gov Superior Credit Experience Across Cycles Deep client relationships, strong underwriting, and niche lending expertise Loan growth that is C&I focused and diversified, including niche lending businesses that provide support across various economic cycles Historical loss experience is favorable to industry
Performing Portfolio Remains Strong and Stable RECENT AND FIVE-YEAR TRENDS REFLECT CONSISTENT STRENGTH OF PORTFOLIO 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 25, 2025. As of 3/31/26, 93% of the loan portfolio was classified in category I(1) and 99% of loans were current Performing Loans - Annual 2021 2022 2023 2024 2025 Current 99.9% 99.9% 99.9% 99.3% 99.4% 30-59 PD 0.1% 0.1% 0.1% 0.7% 0.5% 60-89 PD 0.0% 0.0% 0.0% 0.0% 0.0% >90 PD 0.0% 0.0% 0.0% 0.0% 0.0% Total Performing 100.0% 100.0% 100.0% 100.0% 100.0% Performing % of Total Loans 99.7% 99.8% 99.3% 99.1% 98.7% Performing Loans - Quarterly 1Q25 2Q25 3Q25 4Q25 1Q26 Current 99.9% 99.9% 99.8% 99.4% 99.8% 30-59 PD 0.0% 0.1% 0.1% 0.5% 0.1% 60-89 PD 0.0% 0.0% 0.0% 0.0% 0.0% >90 PD 0.0% 0.0% 0.0% 0.0% 0.0% Total Performing 100.0% 100.0% 100.0% 100.0% 100.0% Performing % of Total Loans 99.2% 99.1% 99.3% 98.7% 99.8% Performing loans comprised 99% of the Bank’s total loan portfolio as of March 31, 2026 Outside of the isolated NPLs, the remainder of the portfolio continues to perform as expected, with no areas of concern We continue to see ongoing strength across our markets and businesses Niche C&I businesses performing well and growing CRE markets are strong Equipment finance transportation portfolio continues to improve and shrink Credit Quality Indicators
Decline in Non-Performing Assets PROGRESS ON SINGLE BORROWER NPA WITH STRONG COLLATERAL POSITION NPAs declined in 1Q26, driven by the sale of $3.4 million of land development loans, at par, from a single Wisconsin-based relationship that was downgraded in Q4 2025 The client’s remaining nonperforming loans were $17.0 million at March 31, 2026. Isolated, internal management challenges limited the client’s ability to advance raw land projects to multi-family development No specific reserve was recorded, as land is in healthy markets and appraisals exceed carrying values
Robust Liquidity with Stable Deposit Base Stable Core Deposit Base Substantial Liquidity Source 3/31/2026 3/31/2025 Short-term investments $104,565 $136,033 Collateral value of unencumbered pledged loans 968,320 973,494 Market value of unencumbered securities 387,700 324,365 Readily accessible liquidity $1,460,585 $1,433,892 Fed fund lines 45,000 45,000 Excess brokered CD capacity (1) 806,268 477,468 Total liquidity $2,311,853 $1,956,360 Uninsured Deposits Collateralized Public Funds FDIC Insured 69% 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 Category 3/31/2026 3/31/2025 Uninsured deposits $1,237,344 $1,055,347 Collateralized public funds 59,613 9,344 FDIC insured deposits 2,269,045 2,178,352 Total deposits $3,566,002 $3,243,043 Percent insured or collateralized 67% 68%
Robust Capital Base Strong Capital Ratios +9% LQA +14% YOY STRONG EARNINGS GENERATE CAPITAL FOR GROWTH 1. “Tangible Book Value Per Share" is a non‐GAAP measurement. Refer to section entitled Non-GAAP Reconciliations in the Company’s Q1 26 earnings release.
Deliver above-average total shareholder return compared to peer median ROATCE and TBV/share are non-GAAP measurements. ROATCE is defined as net income divided by average tangible common equity. 1Q26 ROATCE represents annualized Q1 net incomed divided by average tangible common equity. TBV Growth represents growth over Q1 2025. Refer to the section entitled Non-GAAP Reconciliations in the Company’s Q1 earnings release for additional detail. Revenue Growth represents growth over Q1 2025. Represents data from the 2025 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 2025 survey. Goals & Progress STRATEGIC PLAN 2024-2028 Goals 2024‐2028 2025 Q1 2026 ROATCE1 ≥15% by 2028 15.3% 13.6% TBV Growth1 ≥10% per year 13.7% 13.6% Revenue Growth2 ≥10% per year 9.7% 8.5% Efficiency Ratio <60% by 2028 58.78% 61.14% Core Deposits to Total Funding ≥75% 75% 73% Employee Engagement & Participation3 ≥85% 85% 85% Net Promoter Score4 ≥70 78 78