First Business Financial Services Reports Strong Q2 2026 Performance with $15.4M Net Income

First Business Financial Services, Inc. reported a significant increase in financial performance for the second quarter of 2026, with net income available to common shareholders reaching $15.4 million, or $1.84 per diluted share, compared to $11.2 million, or $1.35 per diluted share, in the same period last year. For the first half of 2026, net income available to common shareholders totaled $27.3 million, or $3.28 per diluted share, up from $22.2 million, or $2.66 per diluted share, in the first half of 2025. The annualized return on average assets improved to 1.43% from 1.14% year-over-year, while the return on average tangible common equity rose to 16.89% from 14.17%.

The company’s total assets increased by $328.1 million, or 8.0%, to $4.410 billion as of June 30, 2026, driven primarily by a $210.9 million increase in loans and leases receivable, which reached $3.588 billion. This growth was attributed to a 12.6% annualized increase in commercial and industrial loans, alongside a 9.9% annualized increase in commercial real estate loans. Additionally, total deposits rose by $211.8 million, or 12.5%, to $3.592 billion, with core deposits increasing by 15.3% annualized.

In terms of operational developments, First Business Financial Services has focused on enhancing its private wealth management services, which saw assets under management and administration grow by $419.9 million, or 22.0%, to $4.235 billion. The company also reported a notable increase in non-interest income, which rose by 18.1% to $8.6 million for the second quarter, driven by higher returns on limited partnership investments and increased service charges on deposits. However, gains on the sale of SBA loans decreased significantly due to the company's strategic exit from the out-of-market SBA 7(a) lending activities.

The allowance for credit losses increased to $39.5 million, or 1.10% of gross loans, reflecting a proactive approach to managing credit risk amid changing market conditions. Non-performing assets decreased to $38.1 million, or 0.86% of total assets, down from $43.9 million, or 1.07%, at the end of 2025. The company’s management remains optimistic about future growth, emphasizing a commitment to maintaining strong asset quality while pursuing opportunities for loan growth and expanding core deposit relationships.

Looking ahead, First Business Financial Services anticipates continued growth in its loan portfolio and core deposits, supported by its strategic focus on client relationships and specialized financial services. The company aims to achieve a net interest margin that aligns with its long-term profitability goals, while also managing interest rate risk through a disciplined approach to asset-liability management.