First Business Financial Services (FBIZ) Q3 2025 earnings summary

Executive summary

• Net income available to common shareholders was $14.2 million ($1.70/share) for Q3 2025, up from $10.3 million ($1.24/share) in Q3 2024 and $11.2 million ($1.35/share) in Q2 2025; nine-month net income was $36.3 million ($4.37/share), up from $29.2 million ($3.50/share) year-over-year.

• Delivered another outstanding quarter with high-quality loan and deposit growth from core client relationships, maintaining a strong net interest margin and positive operating leverage, driving improved efficiency and record operating revenue.

• Tangible book value per share grew 16.8% annualized from Q2 2025 and 15.6% year-over-year.

• Private Wealth assets under management reached $3.814 billion, with fee income up 13% year-over-year, contributing significant annuity-like fee income and supporting robust profitability metrics.

• Annualized ROAA for Q3 2025 was 1.40% (vs. 1.13% prior year); ROATCE was 17.29% (vs. 14.40%).

Financial highlights

• Net interest income for Q3 2025 was $34.9 million, up 12.5% year-over-year; net interest margin was 3.68% (up from 3.64% in Q3 2024); operating revenue rose 16.3% year-over-year.

• Non-interest income for Q3 2025 was $9.6 million, up 36.5% year-over-year, with strong growth in private wealth management fees, swap fees, SBIC fund returns, and nonrecurring fee income.

• Loan balances grew $85 million (10% annualized) in the quarter and $286 million (9%) year-over-year; core deposits up 9% from both linked and prior-year quarters.

• Efficiency ratio improved to 57.44% from 59.44% a year ago.

• Allowance for credit losses was $38.4 million (1.15% of loans), up $1.1 million from year-end 2024.

Outlook and guidance

• Management targets a long-term net interest margin of 3.60%–3.65%; future performance will depend on interest rate changes and fee variability.

• Loan and deposit growth targets remain at 10% annually, supported by market opportunity and ongoing talent acquisition.

• Effective tax rate expected between 16% and 18% for 2025.

• Strategic plan targets ROATCE above 15% by 2028, with 17.3% achieved YTD September 2025.

• Efficiency ratio target below 60% by 2028, with 59.51% achieved YTD.