Q4 2025 First Business Financial Services Inc Earnings Call Transcript
Key Points
- First Business Financial Services Inc (FBIZ) achieved a 14% growth in earnings per share (EPS) in 2025, surpassing their long-term annual goal of 10%.
- The company reported a 17% increase in their quarterly cash dividend, reflecting strong financial performance and confidence in future growth.
- Core deposit balances increased by 12% year-over-year, driven by growth in core interest-bearing and money market client accounts.
- Private Wealth business generated a record $3.8 million in fee income, up 11% year-over-year, indicating successful expansion and relationship building.
- FBIZ maintained a strong net interest margin, with a target range of 3.60% to 3.65%, showcasing effective risk management and funding strategies.
- FBIZ downgraded $20.4 million of CRE loans related to a single borrower, impacting asset quality ratios and resulting in a nonaccrual interest reversal of $892,000.
- Net interest margin declined by 15 basis points in the fourth quarter due to the nonaccrual interest reversal, compressing net interest income.
- The company experienced elevated CRE payoff activity, which contributed to a more moderate pace of loan growth compared to recent periods.
- Noninterest income was affected by lower SBA gains due to a government shutdown and lower swap and loan fees, indicating variability in revenue streams.
- FBIZ's small ticket equipment finance portfolio continued to shrink, with net charge-offs totaling $2.5 million primarily from previously reserved loans.
Good afternoon. Welcome to the First Business Financial Services fourth-quarter 2025 earnings conference call. (Operator Instructions) Please note that this event is being recorded.
I would now like to turn the conference over to First Business Financial Services, Inc., CEO, Corey Chambas. Please go ahead.
Good afternoon, everyone, and thank you for joining us. We appreciate your time and your interest in First Business Bank. Joining me today is our President and Chief Operating Officer, Dave Seiler; and our CFO, Brian Spielmann. Today, we'll discuss our financial performance followed by a Q&A session.
I'd like to direct you to our fourth-quarter earnings release and supplemental earnings call slides, which are available through our website at ir.firstbusiness.bank. We encourage you to review these along with our other investor materials.
Before we begin, please note this call may include forward-looking statements, and the company's actual
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