First Business Financial Services Inc. (FBIZ, Financial) filed Quarterly Report for the period ended 2009-09-30.
First Business Financial Services is the parent of the First Business family of companies managing shareholder relations and providing access to capital for our operating entities. It provides its subsidiaries with cost-effective corporate services including human resources finance information technology and marketing. Its companies include First Business Bank First Business Bank - Milwaukee First Business Trust & Investments First Business Leasing LLC and First Business Capital Corp. First Business Financial Services Inc. has a market cap of $25.36 million; its shares were traded at around $9.99 with and P/S ratio of 0.39. The dividend yield of First Business Financial Services Inc. stocks is 2.8%.
Average earning assets increased 8.4% to $1.02 billion for the three months ended September 30, 2009 from $938.6 million for the three months ended September 30, 2008, with the growth occurring primarily in our commercial real estate loan portfolios and our short-term investments. The average balance of the commercial real estate and other mortgage loan portfolio increased $58.2 million, or 10.6%, for the three months ended September 30, 2009. We continued to have success in writing new commercial real estate loans; however, we experienced reduced growth in this portfolio as we continued to compete with other lenders for fewer high quality loan opportunities. The average balance of our commercial and industrial loan portfolio decreased $13.4 million, or 5.9%, for the three months ended September 30, 2009 compared the three months ended September 30, 2008 due to many clients reducing their assets and outstanding debt obligations due to the current economic environment.
Average interest bearing liabilities increased 8.0% to $940.7 million for the three months ended September 30, 2009 from $871.3 million for the comparable period of the prior year, with the growth occurring primarily in our money market deposit accounts as we continue to focus on generating a stronger local market deposit presence.
The yield on earning assets was 5.61% for the nine months ended September 30, 2009, a decline of 82 basis points from 6.43% for the nine months ended September 30, 2008. The decline in the yield on earning assets is attributable to the loan and lease portfolio. Similar to the discussion of the fluctuations in the three months ended September 30, 2009 and 2008 above, loan yields have been primarily impacted by the declining interest rate environment and the repricing of adjustable rate loans, mitigated by the existence of interest rate floors within the terms of the contracts. Foregone interest was approximately $1.2 million for the nine months ended September 30, 2009 compared to $393,000 for the nine months ended
September 30, 2008. This resulted in a reduction in the loan and lease portfolio yield of approximately 13 basis points, partially offset by an increase of 15 basis points attributable to loan fees collected in lieu of interest. For the nine months ended September 30, 2009, total loan fees collected in lieu of interest was $2.3 million compared to $1.4 million for the nine months ended September 30, 2008. The remaining decline in the yield on earning assets is directly related to the changing interest rate environment.
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First Business Financial Services is the parent of the First Business family of companies managing shareholder relations and providing access to capital for our operating entities. It provides its subsidiaries with cost-effective corporate services including human resources finance information technology and marketing. Its companies include First Business Bank First Business Bank - Milwaukee First Business Trust & Investments First Business Leasing LLC and First Business Capital Corp. First Business Financial Services Inc. has a market cap of $25.36 million; its shares were traded at around $9.99 with and P/S ratio of 0.39. The dividend yield of First Business Financial Services Inc. stocks is 2.8%.
Highlight of Business Operations:
The yield on earning assets was 5.60% for the three months ended September 30, 2009, a decline of 68 basis points from 6.28% for the three months ended September 30, 2008. Loan yields were primarily impacted by the declining interest rate environment and the re-pricing of adjustable rate loans mitigated by the existence of interest rate floors within the terms of the loan agreements. As of September 30, 2009, approximately 52% of our loan and lease portfolio had a fixed interest rate while another 25% of our loan and lease portfolio contained interest rate floors. The magnitude of the portfolio being fixed rate in nature or represented by in-the-money floors has protected our loan and lease portfolio yield from declines of the same magnitude as the overall interest rate environment. The average prime rate declined 175 basis points to 3.25% for the three months ended September 30, 2009 compared to 5.00% for the same three month period of 2008. In addition, we have experienced increased levels of non-accrual loans, resulting in foregone interest of approximately $471,000 for the three months ended September 30, 2009, compared to $94,000 for the three months ended September 30, 2008. This equates to approximately a 16 basis point reduction in the overall loan and lease portfolio yield. As part of interest yield, we also recognize fees collected in lieu of interest including prepayment fees for loans that are paid in full prior to their stated maturity. For the three months ended September 30, 2009, we recognized approximately $815,000 of fees in lieu of interest compared to $365,000 for the three months ended September 30, 2008, resulting in an increase of the overall yield of the loan and lease portfolio of approximately 20 basis points.Average earning assets increased 8.4% to $1.02 billion for the three months ended September 30, 2009 from $938.6 million for the three months ended September 30, 2008, with the growth occurring primarily in our commercial real estate loan portfolios and our short-term investments. The average balance of the commercial real estate and other mortgage loan portfolio increased $58.2 million, or 10.6%, for the three months ended September 30, 2009. We continued to have success in writing new commercial real estate loans; however, we experienced reduced growth in this portfolio as we continued to compete with other lenders for fewer high quality loan opportunities. The average balance of our commercial and industrial loan portfolio decreased $13.4 million, or 5.9%, for the three months ended September 30, 2009 compared the three months ended September 30, 2008 due to many clients reducing their assets and outstanding debt obligations due to the current economic environment.
Average interest bearing liabilities increased 8.0% to $940.7 million for the three months ended September 30, 2009 from $871.3 million for the comparable period of the prior year, with the growth occurring primarily in our money market deposit accounts as we continue to focus on generating a stronger local market deposit presence.
The yield on earning assets was 5.61% for the nine months ended September 30, 2009, a decline of 82 basis points from 6.43% for the nine months ended September 30, 2008. The decline in the yield on earning assets is attributable to the loan and lease portfolio. Similar to the discussion of the fluctuations in the three months ended September 30, 2009 and 2008 above, loan yields have been primarily impacted by the declining interest rate environment and the repricing of adjustable rate loans, mitigated by the existence of interest rate floors within the terms of the contracts. Foregone interest was approximately $1.2 million for the nine months ended September 30, 2009 compared to $393,000 for the nine months ended
September 30, 2008. This resulted in a reduction in the loan and lease portfolio yield of approximately 13 basis points, partially offset by an increase of 15 basis points attributable to loan fees collected in lieu of interest. For the nine months ended September 30, 2009, total loan fees collected in lieu of interest was $2.3 million compared to $1.4 million for the nine months ended September 30, 2008. The remaining decline in the yield on earning assets is directly related to the changing interest rate environment.
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