First Business Financial Services Reports 30% Increase in Net Income for Q1 2025

First Business Financial Services, Inc. reported a significant increase in its financial performance for the first quarter of 2025, with net income available to common shareholders rising to $11.2 million, or $1.32 per diluted share, compared to $8.6 million, or $1.04 per diluted share, in the same period last year. This represents a 30% increase in net income year-over-year. The annualized return on average assets (ROAA) improved to 1.14%, up from 0.98% in the prior year, while the return on average tangible common equity (ROATCE) increased to 14.12% from 12.79%. The corporation's total assets grew by $91.7 million, or 9.5% annualized, reaching $3.945 billion as of March 31, 2025.

The increase in financial performance was driven by a 12.7% rise in net interest income, which totaled $33.3 million, attributed to higher average loans and leases outstanding and increased fees in lieu of interest. Non-interest income also saw a 12.2% increase, totaling $7.6 million, primarily due to higher gains on the sale of Small Business Administration (SBA) loans and private wealth management fees. The provision for credit losses was $2.7 million, up from $2.3 million in the previous year, reflecting the corporation's proactive approach to managing credit risk.

Operationally, First Business Financial Services experienced growth in its loan portfolio, with gross loans and leases receivable increasing by $71.8 million, or 9.3% annualized, to $3.149 billion. The commercial and industrial loan segment saw a notable increase of $77.4 million, or 26.9% annualized. Additionally, total deposits rose by $135.9 million, or 4.3%, to $3.243 billion, with core deposits increasing by $66.3 million, or 11.1% annualized. The corporation's focus on expanding its client relationships and enhancing its treasury management services contributed to this growth.

In terms of strategic developments, First Business Financial Services continues to prioritize its focus on commercial banking products and services tailored for small and medium-sized businesses. The corporation's asset quality remains stable, with non-performing assets decreasing to $24.1 million, or 0.61% of total assets, down from $28.4 million, or 0.74%, at the end of the previous quarter. The allowance for credit losses decreased to $36.5 million, or 1.15% of gross loans and leases, reflecting effective risk management practices.

Looking ahead, First Business Financial Services remains optimistic about its growth trajectory, with management targeting a long-term loan growth rate of approximately 10%. The corporation's strategic initiatives, including enhancing its client support and expanding its product offerings, are expected to drive continued financial performance. The management team is committed to maintaining a strong capital position and ensuring compliance with regulatory requirements, positioning the corporation for sustained success in the evolving banking landscape.