First Business Financial Services, Inc. · NASDAQ:FBIZ
First Business Financial Services — Investor Presentation (February 2013)
39 slides from First Business Financial Services's investor presentation, Feb 6, 2013
Slide 1: Management Presentation February 2013
Management Presentation February 2013
Slide 2: Forward Looking Statement
Forward Looking Statement When used in stati oral with the approval of an authorized executive fice, the words or phrases “may,” “could,” “should,” sles “might,” “believe, ume,” ” “intend, ” “esti imate, ” “anticipate,” ie ” “likely,” or similar expressions are intended to identify “fc within such t
Slide 3: FBIZ Company Overview
FBIZ Company Overview YOUR SUCCESS COMES FIRST
Slide 4: 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 5: Senior Executive Team (continued)
Senior Executive Team (continued)
Slide 6: Senior Executive Team (continued)
Senior Executive Team (continued)
Slide 7: Corporate Profile
Corporate Profile Headquarters: Madison, WI ¢ Business-focused model ¢ Total assets at December ¢ Client relationship focus with 31, 2012: $1.2 Billion high touch service e Experienced leadership ¢ 100% organic growth e Entrepreneurial — Protects culture management style — Protects credit standards
Slide 8: 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 9: Banking and business development office locations
© Banking Office © Asset-Based Lending Business Development Office © Equipment Finance Business Development Office Source: Fal2 Management
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% - 68.2% — Products tailored to serve small businesses and their owners 65.0% ea ¢ Capitalize on market di
Slide 11: Recent Expansion Opportunities
Recent Expansion Opportunities
Slide 12: Strategic Objectives
Strategic Objectives YOUR SUCCESS COMES FIRST First Business
Slide 13: Strategic Objectives (continued)
Strategic Objectives (continued)
Slide 14: Top Line Revenue Growth
Top Line Revenue Growth? Compound Annual Revenue Growth Rate From 12/31/08 — 12/31/12 = 10.4% $4.1M $50 $3.8M Oise 12.2% $3.1M $40 $3.8M. — 13.7% $30 -—— % Millions $31.36 $34.48 $38.69 $42.52 $46.58 2008 2009 2010 2011 2012 Source: SEC lings and FBI2 Management Fevenve. Percentages represent year o
Slide 15: Core Earnings Growth
Core Earnings Growth? Compound Annual Growth Rate From 12/31/08 — 12/31/12 = 15.2% $25 $2.0M 11.8% ~ 25.1% Millions $10.52 $10.35 $13.23 $16.54 $18.50 2008 2009 2010 2011 2012 “Core Earnings
Slide 16: 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% ss00 jigs | _— | | L | 3.75% $600 3.00% $400 2.25% $200 1.50% $o 0.75% 2008 2009 2010 2011 2012 mm Brokered Deposits ml Local CDs Money Market Maint. Bearing Transaction Accoun
Slide 17: Funding Strategy
Funding Strategy i i 100% ° Continue to leverage commercial 56.99NN 47.9% so.socll a2.soclll 34.396 relationships to attract local 90% deposits 80% a - -—a 70% Maintain brokered deposits within ev Board-monitored limits 50% — Match-funding fixed rate term 40% loans with brokered deposits locks 30% i
Slide 18: Asset Quality Trends
Asset Quality Trends ¢ Continue to make significant $85 6086) improvement in NPA levels $50 ¢ As of 12/31/12, nonperforming $45 50% assets were approximately co) = $15.7 million, or 1.28% of total coo assets }, on 2 $25 e Allowance for loan and lease 5 losses provided coverage for we 20% 109% of non
Slide 19: Cumulative Through the Cycle Net Charge-offs
Cumulative Through the Cycle Net Charge-offs as a percentage of 12/31/2007 loans
Slide 20: Operating Return on Average Assets
Operating Return on Average Assets
Slide 21: Efficiency Ratio & FTEs
Efficiency Ratio & FTEs 80.0% 75.0% 70.0% 65.0% 60.0% 55.0% 50.0% 2009 2010 2011 Efficiency Ratio —-FTE “ficiency Ratio” 2012 150 140 130 120 110 100 90 + 80
Slide 22: Financial Performance and Highlights
Financial Performance and Highlights
Slide 23: Recent Financial Highlights
Recent Financial Highlights
Slide 24: Loan and Lease Composition
Loan and Lease Composition ae Boy Leases All Other Loans esidential RE 1.79 f Multifamily 3.59 ay 6.4% Commercial and Industrial 28.1% Construction & Development 7.1% Commercial RE - Nonowner Occupied Commercial RE - 35.5% ‘Owner Occupied 15.9% Source: SEC filings Dec 3: (5000) 2012 Commercial and I
Slide 25: Tangible Book Value per Share
Tangible Book Value per Share
Slide 26: Investment Considerations
Investment Considerations YOUR SUCCESS COMES FIRST
Slide 27: Investment Highlights
Investment Highlights Local market opportunities available for locally based institutions with strong balance sheets Profitable through recent recession with strong underlying fundamental trends Manageable legacy asset quality situation with low historical charge-off levels Improving core funding ba
Slide 28: Appendix Supplemental Data & non-Gaap Reconciliations
Appendix Supplemental Data & non-Gaap Reconciliations
Slide 29: Financial Highlights
Financial Highlights (dollars in the \t or For the Years End 12/31/2007 12/31/2008 areal rarer 12/31/2011 __ 12/31/2012 Income Statement Net Interest Income $23,208 $ 26258 $ 28,034 $ 31951 $ 35,461 $ 37,881 Provision or voi dts Lease Losses 2,904 4,299 8,225 7,044 4,250 4,243 Non-Inte 4,383, 5,105
Slide 30: Yield and Cost Trends
Yield and Cost Trends era Interest Earning Ass Bal Yila/Cost Balance ‘Com rer a ee aT moO 598,068 3 583584 543% S 595281 553% $597,878 5.27% Commercial and industrial loa 221,323 245,706 7.29% 235,208 7.21% 6.28% Direct financing eases 23,829, 15873 559% 16117 623% 5.25% Consumer and other loans 169
Slide 31: Asset Quality Data and Ratios
Asset Quality Data and Ratios
Slide 32: Operating Returns
Operating Returns Operating ROAA and Operating ROAE “Operating return on average assets,” or “Operating ROAA,” is defined as our operating net income—which consists of net income less realized gains on securities and goodwill impairment— divided by average assets. “Operating return on average equity
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
Slide 36: Deposit Cost
Deposit Cost Cost of Total Deposits « “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
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
Slide 39: YOUR SUCCESS COMES FIRST
-— YOUR SUCCESS COMES FIRST | First Business
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