First Business Financial Services Reports Strong Q3 2025 Performance with $14.2M Net Income

First Business Financial Services, Inc. reported a significant increase in financial performance for the third quarter of 2025, with net income available to common shareholders reaching $14.2 million, or $1.70 per diluted share, compared to $10.3 million, or $1.24 per diluted share, in the same period last year. For the nine months ended September 30, 2025, net income available to common shareholders totaled $36.3 million, or $4.37 per diluted share, up from $29.2 million, or $3.50 per diluted share, in 2024. The annualized return on average assets improved to 1.40% from 1.13% year-over-year, while the return on average tangible common equity rose to 17.29% from 14.40%.

The company experienced a 6.3% increase in total assets, amounting to $4.035 billion as of September 30, 2025, up from $3.853 billion at the end of 2024. This growth was primarily driven by a $220.9 million increase in loans and leases receivable, which reached $3.298 billion, reflecting a 9.6% annualized growth rate. Core deposits also saw a notable increase, rising by $195.7 million, or 10.9%, to $2.592 billion. The total liabilities increased by 5.7% to $3.677 billion, largely due to the growth in core deposits.

In terms of operational developments, First Business Financial Services reported a 36.5% increase in non-interest income for the third quarter, totaling $9.6 million, driven by higher fees from private wealth management services and gains on the sale of Small Business Administration (SBA) loans. The company’s total non-interest income for the nine months ended September 30, 2025, was $24.5 million, a 15.2% increase from the previous year. The increase in non-interest income reflects the company’s strategy to diversify revenue sources and enhance fee-based income.

The allowance for credit losses increased to $38.4 million, or 1.15% of gross loans and leases, compared to 1.20% at the end of 2024. The provision for credit losses for the third quarter was $1.4 million, down from $2.1 million in the same period last year. Non-performing assets decreased to $23.5 million, or 0.58% of total assets, from $28.4 million, or 0.74%, at the end of 2024. The company continues to monitor asset quality closely, with 99.30% of the total loan portfolio in current payment status.

Looking ahead, First Business Financial Services remains focused on maintaining its growth trajectory while managing credit risk and enhancing operational efficiency. The company aims to leverage its strong deposit base and diversified revenue streams to support future growth initiatives. Management anticipates continued growth in loans and leases, with a long-term target of 10% annual growth, while also navigating the challenges posed by market conditions and regulatory requirements.