First Business Financial Services, Inc. · NASDAQ:FBIZ
First Business Financial Services — Q2 2025 Earnings Presentation
43 slides from First Business Financial Services's earnings presentation, Jul 25, 2025
Slide 1: Investor Presentation Second Quarter 2025
Investor Slide Title Presentation Date Second Quarter 2025 NASDAQ: FBIZ 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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,”
Slide 3: Table of Contents
Page Q2 2025 Results 4 Company Snapshot 5 Strategic Plan Table of Contents 6 Why FBIZ? 11 Drivers of Growth & Profitability 19 Appendix 24
Slide 4: Highlights Q2 2025
Highlights Q2 2025 Core Deposits Loans NIM +11% +8% 3.67% Core deposits grew 11.4% annualized from the Consistent loan growth across the Company. Match-funding strategy and pricing discipline linked quarter and 9.7% from Q2 2024. Loans grew 8.4% annualized from the linked produced a strong net inter
Slide 5: Company Snapshot
MISSION Build long‐term shareholder value as an entrepreneurial banking partner that drives success for businesses, investors, NASDAQ: FBIZ and our communities. $406 Million HEADQUARTERS Madison, WI MARKET CAP 1 FBIZ BUSINESS BANKING 2 We serve business executives, entrepreneurs, and high net $4.0 B
Slide 6: Five Year Strategic Plan
FIVE YEAR Strategic Plan 6
Slide 7: Five Year Strategic Plan 2024-2028
2024-2028 Five Year Strategic Plan FUTURE-READY TALENT EFFICIENCY Thrive in the workplace of Achieve operational the future excellence 01 03 05 02 04 CULTURE DEPOSITS PROFITABILITY Protect and strengthen our Grow our core deposits Achieve sustainable culture profitability and growth First Business B
Slide 8: Goals & Progress
Goals & Progress STRATEGIC PLAN 2024-2028 Deliver above-average total shareholder return compared to peer median Goals 2024‐2028 2024 June 25 YTD ROATCE1 ≥15% by 2028 15.4% 14.2% TBV Growth1 ≥10% per year 15.0% 13.6% Revenue Growth ≥10% per year 6.6% 10.3% Efficiency Ratio <60% by 2028 60.61% 60.63%
Slide 9: Total Shareholder Return Above Peer Group Median
Total Shareholder Return Above Peer Group Median DESPITE RECENT OUTPERFORMANCE, PRICE/LTM EPS REMAINS BELOW PEERS Total Shareholder Return1 Price / LTM EPS2 300% 12.0 250% 11.0 200% 10.0 150% 9.0 100% 8.0 50% 7.0 0% 1-Year TSR 3-Year TSR 5-Year TSR 6.0 P/LTM EPS FBIZ Peer Group Median S&P 500 Bank R
Slide 10: Total Shareholder Return Since IPO
Total Shareholder Return Since IPO OUTPERFORMED PRIMARY BANKING INDICES SINCE 2005 IPO Total Shareholder Return Monthly, October 2005 through July 24, 2025 600 500 512% 400 300 200 183% 147% 100 113% 66% 0 (100) (200) FBIZ S&P 500 Bank Index KBW Nasdaq Bank Index KBW Regional Bank Index S&P 500 Regi
Slide 11: Why FBIZ?
Why FBIZ? 11
Slide 12: Our Historic & Ongoing Growth Supports Earnings Power
GROWING PROFITABILITY Our Historic & Ongoing Growth Supports Earnings Power 13% 12% 12% 5-year 5-year 5-year Loan Core Deposit TBV/Share CAGR CAGR CAGR 2019-2024 2019-2024 2019-2024 Differentiated Loan Strong & Stable Growing Growth Capabilities Deposit Franchise Profitability Profile • History of c
Slide 13: Balanced and Steady Growth
Balanced and Steady Growth OPERATING FUNDAMENTALS DRIVE EARNINGS POWER Operating Income $180 Highlights $160 • Continued strong revenue supported by: $140 • Robust loan and deposit growth $120 • Strong and stable net interest margin $100 • Diverse sources of non‐interest income, Millions including s
Slide 14: Margin Strength Through Rate Cycles
Margin Strength Through Rate Cycles MATCH-FUNDING STRATEGY BETTER POSITIONS BALANCE SHEET FOR RATE CHANGES 3.90% Net Interest Margin 3.70% 3.50% 3.30% 3.10% 2.90% 2.70% 2.50% 2018 2019 2020 2021 2022 2023 2024 1Q25 FBIZ Net Interest Margin Peer Median Net Interest Margin Linear (FBIZ Net Interest Ma
Slide 15: Disciplined Interest Rate Risk Management
Disciplined Interest Rate Risk Management • Generally individually match‐fund loans with maturities over 5 years and amounts greater than $5MM. METHODICAL • Portfolio match‐funding in various terms against the fixed‐rate loan APPROACH portfolio with maturities under 5 years and amounts less than $5M
Slide 16: Operating Leverage Outperforms Peers
Operating Leverage Outperforms Peers HISTORY OF GROWING REVENUES FASTER THAN EXPENSES Operating Leverage • We aim to achieve 10% revenue growth on an annual basis, with positive operating leverage1 12% • Despite headwinds related to outsized NIM in 2023, we achieved 10% FBIZ Avg2 = 3.3% positive ope
Slide 17: Growth And Profitability Exceeds Peers
Growth And Profitability Exceeds Peers TLR GROWTH AND EFFICIENT CAPITAL MANAGEMENT DRIVES STRONG PROFITABILITY Top Line Revenue Growth Return on Average Tangible Common Equity 16% 20% 14% 18% 12% 16% 10% 14% 8% 12% 6% 10% 4% 8% 2% 6% 0% 4% -2% 2% -4% 0% 2021 2022 2023 2024 TTM Q1 25 2021 2022 2023 2
Slide 18: Shareholder Value Creation
Shareholder Value Creation A HISTORY OF STEADY, CONSISTENT TBV AND DIVIDEND GROWTH THROUGH ECONOMIC AND INTEREST RATE CYCLES $45 TBV 5YR CAGR = 12% $40 Div/Share 5YR CAGR = 11% $35 $30 $25 $20 $15 $10 $5 $0 1 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 Q2 25 TBV/Share
Slide 19: Drivers of Growth & Profitability
Drivers of Growth & Profitability 19
Slide 20: Relationship Banking Key to Success
Relationship Banking Key to Success CORE DEPOSIT GROWTH SUPPORTS LOAN GROWTH • Deposit‐centric sales strategy led by treasury management sales teams located in all bank Core Deposit Growth Loan Growth markets with direct production and outside calling goals $3.0 +11% LQA $3.5 +8% LQA • Bankers train
Slide 21: Diversified Lending Growth
Diversified Lending Growth GROWTH IN HIGHER-YIELDING C&I LENDING MIX Growth in Higher-Yielding C&I Lending 40% 9% 3-Year Loan CAGR 38% 8% C&I = 17% 36% CRE & Other = 11% 7% 34% Loan Mix % 6% Yield 32% 5% 30% 4% 28% 26% 3% 24% 2% 2021 2022 2023 2024 June 25 YTD C&I Loan Mix C&I Lending Yield CRE and
Slide 22: Net Interest Margin Components
Net Interest Margin Components STRONG BALANCE SHEET SUPPORTS RESILIENT NIM NIM Components Net Interest Margin 3.85% 4.0% 3.80% 3.77% 3.65% 3.69% 3.67% 3.64% 3.75% 0.05% 0.03% 0.14% 0.29% 0.23% 0.20% 3.5% 0.19% 3.70% 3.69% 0.00% -0.01% 0.00% 3.67% -0.04% -0.05% 3.65% 3.36% 3.26% 3.60% 3.19% 3.0% 3.14
Slide 23: Solid Asset Quality
Solid Asset Quality NON-PERFORMING ASSETS REMAIN WELL MANAGED Reserves and NPL Coverage Credit Quality Indicators NPAs / Total Assets As of 6/30/25, 93% of the loan portfolio was 1.6% 1.60X classified in category1 and 98% of loans were 0.80% current Allowance for Credit Losses as a % of Loans 0.74%
Slide 24: Appendix
Appendix SUPPLEMENTAL DATA & NON-GAAP RECONCILIATIONS 24
Slide 25: Offerings Designed Exclusively For Business And Wealth Management
SERVICES THAT MEET THE EVOLVING NEEDS OF OUR GROWING CLIENT BASE Offerings Designed Exclusively For Business And Wealth Management 25
Slide 26: Superior Client Satisfaction Rating
Superior Client Satisfaction Rating EXCELLENT EMPLOYEE SATISFACTION DRIVES SUPERIOR CLIENT SATISFACTION 26
Slide 27: Environmental, Social, and Governance Practices Are Integrated Into Our Core Business Strategy
ESG FRAMEWORK Environmental, Social, and Governance Practices Are Integrated Into Our Core Business Strategy Environment Social Governance • Branch‐lite model with only one location • Named to the national list of Top • Corporate Governance and Nominating in each of the banking markets we serve Work
Slide 28: Robust Liquidity with Stable Deposit Base
Robust Liquidity with Stable Deposit Base Stable Core Deposit Base Substantial Liquidity As of 6/30/25 $3,305,222 Source 6/30/2025 6/30/2024 Uninsured Deposits Short-term investments $72,520 $54,680 $1,069,509 Collateral value of unencumbered pledged loans 893,499 401,602 $67,990 70% of Collateraliz
Slide 29: Robust Capital Base
Robust Capital Base STRONG EARNINGS GENERATE CAPITAL FOR GROWTH Tangible Book Value per Share1 Strong Capital Ratios (%) $39 $38.54 12.25% +10% LQ 10.50% $38 +14% YOY $37.58 9.66% 9.33% $36.74 8.82% $37 8.50% 7.00% $36 $35 $34.74 4.00% $33.92 $34 $33 $32 Tier 1 Common Tier 1 Capital Total Capital $3
Slide 30: Capital Strength
Capital Strength 6/30/25 3/31/25 12/31/24 9/30/24 6/30/24 • Regulatory capital ratios remain solid including a Total Regulatory Capital $440,159 $429,351 $421,639 $407,421 $392,359 Total Capital Ratio of 12.25% Total Risk-Weighted Assets $3,592,554 $3,519,769 $3,491,626 $3,477,734 $3,425,925 and a T
Slide 31: Diversified Lending Products
Diversified Lending Products DOUBLE- DIGIT LOAN GROWTH DRIVEN BY S TELLAR P ERFORMANCE ACROS S ALL AREAS OF THE BANK Total Loan Breakdown Commercial Real Estate Breakdown C&I Breakdown by Product 1% 2% 3% 14% 13% 29% 39% 39% 13% 60% 5% 44% 11% 27% All other C&I lending Equipment Finance CRE C&I Othe
Slide 32: Commercial Real Estate Lending
Commercial Real Estate Lending SUPERIOR TALENT WITH BUSINESS EXPERTISE BUILDING RELATIONSHIPS IN MIDWEST GEOGRAPHIC FOOTPRINT Product Profile • Target small to medium-sized companies • Lines of credit and term loans focused Portfolio Analysis Gross Revenue on businesses with annual sales of up $1,95
Slide 33: CRE Office Portfolio Analysis
CRE Office Portfolio Analysis EXCEPTIONAL CREDIT QUALITY ON OFFICE LOANS FOCUSED IN OUR LOCAL BANK MARKETS • Office loans focused in our bank markets and Commercial Real Estate Breakdown Midwest Locations - Office >$3mm concentrated in Wisconsin Land Development 1-4 Family Other, 8% 3% 3% Misc. 1% S
Slide 34: Multi-Family Portfolio Analysis
Multi-Family Portfolio Analysis EXCEPTIONAL CREDIT QUALITY ON MULTI-FAMILY LOANS THROUGHOUT THE MIDWEST Multi-Family Breakdown Midwest Locations • Loans focused in our bank Senior Housing Student Housing 7% All Other markets and concentrated 1% 8% Suburban Milwaukee, 17% in Wisconsin Rent Restricted
Slide 35: C&I Lending
C&I Lending DIVERSIFIED COMMERCIAL PRODUCT OFFERINGS TARGET COMPANIES NATIONWIDE Product Profile • Target small and medium companies in a variety of industries Gross Revenue Portfolio Analysis • Financings range from $27 $250,000 to $10 million $1,400 10.00% $27 $1,200 $26 Technology $1,000 8.00% $2
Slide 36: Equipment Finance Portfolio Analysis
Equipment Finance Portfolio Analysis STRONG AND DIVERSIFIED PORTFOLIO; TRANSPORTATION SUB-CATEGORY SHOWING SECTOR-SPECIFIC WEAKNESS • Equipment Finance (EF) loans Portfolio by Industry Maturing Over Time diversified across industries Truck Transportation $100 MM ◦ EF comprised 27% of 9% Construction
Slide 37: Treasury Management
Treasury Management Product Profile SUPERIOR TALENT WITH BUSINESS EXPERTISE BUILDING RELATIONSHIPS IN MIDWEST • Target small to medium- GEOGRAPHIC FOOTPRINT sized companies in our Wisconsin, Kansas, and Missouri markets • Comprehensive services for commercial clients to Funding Mix Fee Revenue and A
Slide 38: Private Wealth Management
Private Wealth Management Product Profile • Fiduciary and investment WEALTH MANAGEMENT SERVICES FOR BUSINESSES, EXECUTIVES, AND HIGH NET manager for individual and WORTH INDIVIDUALS corporate clients, creating and executing asset allocation strategies tailored to each client’s unique Assets Under Ma
Slide 39: Adjusted Net Interest Margin
Non-GAAP Reconciliation Adjusted Net Interest Margin “Adjusted Net Interest Margin” is a non-GAAP measure representing net interest income excluding the fees in lieu of interest and other recurring, but volatile, components of net interest margin divided by average interest-earning assets excluding
Slide 40: Adjusted Net Interest Income
Non-GAAP Reconciliation Adjusted Net Interest Income "Adjusted Net Interest Income" is defined as net interest income less fees in lieu of interest and other recurring, but volatile components of net interest income . "Fees in Lieu of Interest" is defined as prepayment fees, asset-based loan fees, n
Slide 41: Net Operating Income
Non-GAAP Reconciliation Net Operating Income "Net Operating Income" is a non-GAAP financial measure. We believe net operating income allows investors to better assess the Company’s operating expenses in relation to its top line revenue by removing the volatility that is associated with certain one-t
Slide 42: Cost Of Funds
Non-GAAP Reconciliation Cost Of Funds ‘‘Cost of Funds’’ is defined as total interest expense on deposits and FHLB advances, divided by the sum of total average deposits and average FHLB advances. We believe that this measure is important to many investors in the marketplace who are interested in the
Slide 43: Investor Presentation Second Quarter 2025
Investor Presentation Second Quarter 2025 NASDAQ: FBIZ 43
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