First Business Financial Services Reports 20% Increase in Net Income for Fiscal Year 2024

First Business Financial Services, Inc. (FBFS) reported a significant increase in its financial performance for the fiscal year ending December 31, 2024, with net income available to common shareholders rising 20% to $43.4 million, compared to $36.2 million in 2023. Diluted earnings per share also increased by 20% to $5.20, up from $4.33 in the previous year. The company's return on average assets (ROAA) improved to 1.20%, while return on average common equity (ROACE) rose to 14.73%, reflecting a strong operational performance amid a competitive banking environment.

Total assets for FBFS increased by 9.8% to $3.853 billion, driven primarily by a 9.3% rise in gross loans and leases, which reached $3.114 billion. The company’s allowance for credit losses also saw an increase, rising to $37.3 million, or 1.20% of gross loans, up from $32.9 million, or 1.16% in 2023. This increase in the allowance was attributed to loan growth and a rise in specific reserves for individually evaluated loans, particularly in the commercial and industrial sector.

Strategically, FBFS has focused on enhancing its product offerings and expanding its market presence. The company has made significant investments in technology to improve operational efficiency and client experience. Additionally, it has maintained a strong emphasis on employee engagement, achieving an 86% engagement rating, which is above industry benchmarks. The workforce grew to 353 employees, reflecting the company's commitment to attracting and retaining talent.

In terms of operational metrics, FBFS reported a decrease in non-interest income, which fell by 6.6% to $29.3 million, primarily due to lower returns on investments in Small Business Investment Company (SBIC) funds and a decline in commercial loan swap fee income. However, private wealth management service fees increased by 16.1%, indicating a successful expansion in that segment. The company also reported a slight increase in non-performing assets, which totaled $28.4 million, or 0.74% of total assets, compared to $20.8 million, or 0.59% in 2023.

Looking ahead, FBFS remains optimistic about its growth trajectory, with plans to continue expanding its core deposit base and enhancing its service offerings. The company anticipates that its strategic initiatives, including investments in technology and talent development, will position it well to navigate the evolving financial landscape and capitalize on emerging opportunities.