First Business Financial Services (FBIZ) investor relations material

Executive summary

• Record Q3 pre-tax, pre-provision earnings were $21.3 million; net income available to common shareholders was $16.4 million and diluted EPS was $1.95, up 15% YoY.

• Nine-month diluted EPS rose 20% YoY to $5.24; tangible book value per share increased 13% YoY to $45.56.

• Relationship-driven loan and core deposit growth, margin expansion and expense discipline supported execution of long-term growth objectives.

Financial highlights

• Q3 operating revenue was $47.5 million, up 6.7% YoY; net interest income rose 12.0% to $39.1 million, offsetting a 12.6% decline in non-interest income.

• Q3 adjusted PTPP earnings were $21.3 million, up 13.1% YoY and 7.6% QoQ; provision for credit losses was $1.9 million.

• Nine-month operating revenue increased 9.8% to $138.5 million; adjusted PTPP earnings reached $58.4 million versus $51.1 million.

• Q3 operating expense was $26.2 million, down $706,000 QoQ, primarily from lower compensation following the SBA lending exit.

• Period-end gross loans and leases rose $301.7 million to $3.677 billion and total deposits increased $369.4 million to $3.750 billion from year-end 2025.

Outlook and guidance

• Loan growth target remains ~10% annually; Q4 pipelines were softer, mainly due to client timing, while management reported no systemic market change.

• Core deposit growth is expected to remain healthy through the rest of 2026 and into 2027; the long-term strategic target is core deposits of at least 75% of funding.

• Q4 NIM is expected to moderate from 3.80% but remain above the 3.60%–3.65% long-term target as loan fees normalize and deposits reprice.

• Q4 expenses are expected to rise with planned marketing, talent, technology and infrastructure investment; total Q4 expenses are expected below $27 million.

• FY 2026 effective tax rate guidance is 13%–15%; annual positive operating leverage remains the plan for 2027.