First Business Financial Services, Inc. · NASDAQ:FBIZ
First Business Financial Services — Investor Presentation (May 2013)
39 slides from First Business Financial Services's investor presentation, May 8, 2013
Slide 1: Management Presentation
Management Presentation May 2013 YOUR SUCCESS COMES FIRST
Slide 2: Forward Looking Statement
Forward Looking Statement When used in this presentation, he executive officer, the words or phrases “may,” “could,” “should,” “hope,” “might,” “belive,” “expect,” “plan,” ume,” ’ “intend,” “estimate,” “anticipate,” Cay ” likely,” or similar expressions are intended to identify within su 1995. Such
Slide 3: FBIZ Company Overview
FBIZ Company Overview YOUR SUCCESS COMES FIRST
Slide 4: Corporate Profile
Corporate Profile Headquarters: Madison, WI Total assets at March 31, 2013: $1.2 Billion Experienced leadership Entrepreneurial management style Insider ownership of 10.1%") Business-focused model Client relationship focus with high touch service 100% organic growth — Protects culture — Protects cre
Slide 5: History of First Business
History of First Business Jun 2000 First Business Bank - Milwaukee Mar 1990 May 1995 Dec 2001 Sep 2006 First Business First Business First Business First Business Bank - Madison Capital Corp. Trust & Investments Bank — Northeast" ~ aoe Oct 1 Nov 2012 First Business First Business Equipment Finance F
Slide 6: Banking and business development office locations
© Banking Office © Asset-Based Lending Business Development Office © Equipment Finance Business Development Office Source: FIZ Management
Slide 7: Senior Executive Team
Senior Executive Team Corey Chambas Jim Ropella President & Chief Executive Officer of First Business * Chief Financial Officer Financial Services, I * Over 30 years of experience in finance and accounting Over 25 years of commercial banking experience primarily in the banking industry specializing
Slide 8: Senior Executive Team
Senior Executive Team Barbara Conley Dave Vetta + General Counsel and Corporate Secretary * President & Chief Executive Officer of First Business Bank ~ Juris Deets University of Wisconsin Law School, mers Member of the State Bar of Wisconsi Over 30 years of commercial banking experience Over 30 yea
Slide 9: Senior Executive Team
Senior Executive Team Randy Shumate Jodi Chandler reside of First Business Equipment Finance — National . Divisior Senior Vice President - Human Resources Over 25 years of experience in human resources Over 25 years of equipment finance and leasing experience 20 years with First Business 1 year with
Slide 10: Corporate Strategy
Corporate Strategy High efficiency “Business Bank” Efficiency Ratio vs. WI Peers operating model 80.0% — Limited branch network — Invest in technology to serve our 75.0% business clients 70.0% — Products tailored to serve small a businesses and their owners 65.0% 658 ¢ Capitalize on market disruptio
Slide 11: Recent Expansion Opportunities
Recent Expansion Opportunities e Kansas City office for First Business Equipment Finance — Joined in April 2012 — “Lift out” of 5 individuals that have worked together for more than 20 years Expansion of existing equipment finance business line e First Business Factors — Established in November 2012
Slide 12: Strategic Objectives
Strategic Objectives YOUR SUCCESS COMES FIRST First Business
Slide 13: Strategic Objectives
Strategic Objectives Continue organic revenue growth Achieve additional improvement in core earnings Continue to capture in-market deposits from clients to strengthen our mix of core funding and reduce our cost of funds Continue asset quality improvement Maintain strong profitability/ROA Opportunist
Slide 14: Top Line Revenue Growth
Top Line Revenue Growth? Compound Annual Growth Rate From 12/31/08 — 12/31/12 = 10.4% $60 $4.1M $50 : — $3.8M 9.5% $4.2M 9.9% $3.1M 12.2% a 13.7% $30 $1.4M $10 $31.36 $34.48 $38.69 $42.52 $46.58 | $o 2008 2009 2010 2011 2012 YTD YTD 3/31/12 3/31/13 Millions Source: SEC lings and FBI2 Management Feve
Slide 15: Core Earnings Growth
Core Earnings Growth? Compound Annual Growth Rate From 12/31/08 — 12/31/12 = 15.2% $25 $2.0M Cie __ a_i _< te __—_—— $15 Millions 910 $0.9M 20.8% $10.52 $10.35 $13.23 $16.54 $18.50 ee im 2008 2009 2010 2011 2012 YTD YTD 3/31/12 3/31/13 $o “Core Earnings
Slide 16: Efficiency Ratio & FTEs
Efficiency Ratio & FTEs 80.0% 75.0% 70.0% 65.0% 60.0% 55.0% 50.0% 2008 2009 2010 2011 2012 3/31/13 Efficiency Ratio —-FTE Source: SEC Fllgs and FBIZ Management. ficiency Ratio” 150 140 130 120 110 100 90 + 80
Slide 17: Deposit Composition
Deposit Composition Local Deposits) - Compound Annual Growth Rate From 12/31/08 - 12/31/12 = 18.7% $1,200 5.25% $1,000 4.50% 3.55% a a — = = a $800 =— 3.75% co} = $600 peoy 3.00% = ] $400 2.25% $200 | 1.50% $o = 0.75% 2008 2009 2010 2011 2012 3/31/13 mm Brokered Deposits mm Local CDs Money Market Mm
Slide 18: Funding Strategy
Funding Strategy ¢ Continue to leverage commercial 100% Long-term brokered funding more 20% reasonably priced than some in- 10% market CD rates . ; 47.89 0.59442. 594M 43°32. 694 relationships to attract local 90% é deposits 80% ¢ Maintain brokered deposits within pes Board-monitored limits 60% 50%
Slide 19: Asset Quality Trends
Asset Quality Trends Continue to make significant 2 . $55 60% improvement in NPA levels ff 561% * As of 3/31/13, sas 50% nonperforming assets were 40 sey $1.8 approximately $12.6 million, $35 . 40% or 1.03% of total assets $1.7 930 e Allowance forloanandlease § gos oi losses provided coverage for =
Slide 20: Cumulative Net Charge-Offs as a Percentage of Loans
Cumulative Net Charge-Offs as a Percentage of 12/31/07 Loans and Leases 14.00% 12.00% 10.00% 8.00% | 6.00% 4.00% 2.88% 2.88% 2.00% ; ae || | say | on = 2008 2009 2010 2011 2012 2013YTD mmrBiZ —All BHCs —Wi-Based BHCs
Slide 21: Return on Average Assets
Return on Average Assets 1.20% @® 1.06% 1.00% 0.80% © © eA 0.60% 0.40% @® 0.00% | | T = 2008 2009 2010 2011 (1) 2012 YTD YTD 3/31/12 3/31/13 Source: SEC lings and FBI2 Management. YTD datas annualized 1
Slide 22: Financial Performance Highlights
Financial Performance Highlights YOUR SUCCESS COMES FIRST First Business
Slide 23: Recent Financial Highlights
Recent Financial Highlights At or for the 3 Month: Year over year quarterly financial ($in000s, except ‘Aor forthe YearEnded, “"°"OL0E= Monts y : y Ended, highlights include: 3/31/12 3/31/13 per share data) 12/31/11 12/31/12 47% increase in net income to a record $3.2 million Net Income $8,425 $8,92
Slide 24: Loan and Lease Composition
Loan and Lease Composition 1-4 Family Leases All Other Loans aaa 1% 2% Multifamily Commercial and 6% Industrial 28% Construction & Development 8% Commercial nai Industrial Comercial RE eae Nor certian nat Multifar 14 Family Residential RE tal Gross Loans and Leases Commercial RE- Nonowner Occupied C
Slide 25: Tangible Book Value per Share
Tangible Book Value per Share Compound Annual Growth Rate From 12/31/08 — 12/31/12 = 6.5% $28.00 $26.00 @> @ S&S $24.00 @ $22.00 ~o & 2 $18.00 $16.00 $14.00 : 2008 2009 2010 2011 2012 3/31/13
Slide 26: Dividends Declared per Common Share
Dividends Declared per Common Share — ~ 0.0% 2008 2009 2010 2011 2012 3/31/2013 mmm Dividends Declared per Common Share —Payout Ratio
Slide 27: Investment Considerations
Investment Considerations YOUR SUCCESS COMES FIRST
Slide 28: Investment Highlights
Investment Highlights Local market opportunities available for locally based institutions with strong balance sheets Profitable through the economic cycle with strong underlying fundamental trends Manageable legacy asset quality situation with low historical charge-off levels Improving core funding
Slide 29: Appendix
Appendix Supplemental Data & non-GAAP Reconciliations YOUR SUCCESS COMES FIRST First Business
Slide 30: Financial Highlights
Financial Highlights (dollars in thousands) Income Statement Net Interest Income $ 26258 $ 28034 $ 31951 $ 35,461 $ 37881 $ 8926 $ 10,229 Provision for Loan and Lease Losses 4,299 8,225 7,04 4,250 4,243 0. Et Non-Interest In 5,105 6,128 6,743 7,060 8,699 1,850 1,953 Gain on Sale of Secure ¢ 321 “ =
Slide 31: Yield and Cost Trends
Yield and Cost Trends 42/31/2012 ‘average ‘Average Avera ‘Average Average Average Interest Earnin a se _Yield/Cost__Balance Viel Yield/Cost__alance _Yield/Cost ‘Commercial real sae manos 068 560% $608.6 $583,598 36 907 5.61% § 617,948 5.19% ‘Commercial and industrial loa 1,3: % 19,754 245,706 %6 x 3
Slide 32: Asset Quality Data and Ratios
Asset Quality Data and Ratios Saiz $11,674 2766 § 20199 § 15451 $ 7 Foreclosed properties, net 2,236 45) Total non-performing assets 324002 “$22,789 "S 17,388_ 5 SE S579 Performing troubled debt restructurings s “ans a1 $53 $= 897 $1905 $1,285, Criticized Assets * ‘Special Mention 39m 5 ~ 8 E Substa
Slide 33: Core Earnings
Core Earnings Core Earnings (Pre-tax) « “Core earnings” is defined as pre-tax income plus provision for loan and leases losses, other identifiable costs of credit and other discrete items that are unrelated to core business activities. In our judgment, the presentation of core earnings allows our ma
Slide 34: Efficiency Ratio
Efficiency Ratio Efficiency Ratio “Efficiency ratio” is defined as non-interest expense less loss on foreclosed properties, FDIC special assessments, goodwill impairment and amortization of other intangible assets divided by our operating revenue, which is equal to net interest income plus non-inter
Slide 35: Tangible Book Value Per Share
Tangible Book Value Per Share « “Tangible book value per share” is defined as tangible common stockholders’ equity divided by total common shares outstanding. We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book va
Slide 36: Deposit Cost
Deposit Cost « “Cost of Total Deposits” is defined as total interest expense on deposits divided by average total deposits. We believe that this measure is important to many investors in the marketplace who are interested in the trends in our deposit funding costs. (dollars in thousands) For the Yea
Slide 37: Texas Ratio
Texas Ratio “Texas Ratio” is defined as nonperforming assets divided by the sum of the allowance for loan and lease losses and tangible total equity. We believe that this ratio is important to many investors in the marketplace who are interested in evaluating the level of a company’s nonperforming a
Slide 38: Cumulative Net Charge-off Percentage
Cumulative Net Charge-off Percentage mulative Net Charge-Offs to 12/31/07 Loans and Lea * “Cumulative Net Charge-off Percentage” is defined as aggregate net charge-offs from 1/1/2008 through 3/31/2013 divided by total loans and leases as of 12/31/2007. We believe that this measure is important to ma
Slide 39: Your Success Comes First
= YOUR SUCCESS COMES FIRST | First Business
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