First Business Financial Services Reports Strong Q2 2025 Performance with $11.2M Net Income

First Business Financial Services, Inc. reported a solid financial performance for the second quarter of 2025, with net income available to common shareholders reaching $11.2 million, or $1.35 per diluted share, compared to $10.2 million, or $1.23 per diluted share, in the same period last year. For the first half of 2025, net income available to common shareholders totaled $22.2 million, or $2.66 per diluted share, up from $18.9 million, or $2.26 per diluted share, in the prior year. The annualized return on average assets (ROAA) remained stable at 1.14% for both the second quarter and the first half of 2025, while the return on average tangible common equity (ROATCE) was 14.17% for the second quarter, slightly down from 14.73% in the same quarter of 2024.

The company experienced a 7.8% increase in total assets, which rose to $4.003 billion as of June 30, 2025, compared to $3.853 billion at the end of 2024. This growth was primarily driven by an increase in loans and leases receivable, which rose by $136.7 million, or 8.9%, to $3.214 billion. The increase in loans was largely attributed to a significant rise in commercial and industrial loans, which grew by $107.5 million, or 18.7%. Additionally, total deposits increased by $198.1 million, or 12.8%, to $3.305 billion, reflecting a strong focus on core deposit relationships.

In terms of operational developments, the company reported a decrease in non-interest income for the second quarter, which fell to $7.3 million, down 2.3% from the previous year. This decline was mainly due to a reclassification of certain loan fees from non-interest income to interest income, alongside lower income from Small Business Investment Company (SBIC) funds. However, private wealth management services fee income increased by 8.3%, contributing positively to the overall revenue mix. The company also noted an increase in private wealth and trust assets under management, which rose by $312 million, or 18.2%, to $3.731 billion.

The provision for credit losses increased to $2.7 million for the second quarter, compared to $1.7 million in the same period last year, reflecting a proactive approach to managing credit risk amid changing economic conditions. The allowance for credit losses, including reserves for unfunded commitments, rose to $38.2 million, or 1.18% of gross loans and leases, slightly down from 1.20% at the end of 2024. Non-performing assets increased marginally to $28.7 million, representing 0.72% of total assets, indicating stable asset quality.

Looking ahead, First Business Financial Services, Inc. remains focused on maintaining its growth trajectory while managing risks associated with credit quality and market conditions. The company anticipates continued growth in its loan portfolio, particularly in commercial lending, and aims to enhance its core deposit base through strategic initiatives. Management is committed to monitoring economic indicators and adjusting its strategies accordingly to ensure long-term profitability and stability.