First Business Bank Reports Record Net Income of $9.7 Million

Rhea-AI Summary

First Business Financial Services (Nasdaq: FBIZ) reported a record net income of $9.7 million or $1.12 per diluted share for Q1 2021, up from $6.1 million in Q4 2020 and $3.3 million in Q1 2020. Revenue rose 20% year-over-year to $28.1 million. Loans grew by $46.9 million, or 10% annualized, excluding PPP loans. Non-performing assets decreased 29% to $19 million, showcasing improved asset quality. The Company's tangible book value per share increased by 11% annualized. Overall, FBIZ is positioned for sustained growth in loans and revenue.

Positive

• Record net income of $9.7 million; up 59% YoY.
• Revenue increased 20% year-over-year to $28.1 million.
• Loan growth of $46.9 million, or 10% annualized, excluding PPP loans.
• Non-performing assets reduced by 29% to $19.0 million.
• Tangible book value per share grew 11% annualized.

Negative

• Net interest income decreased by $1.6 million, or 7.3%, from Q4 2020.
• Net interest margin decreased by 25 basis points to 3.44%.
• Provision for loan losses benefited by $2.1 million; potential risks remain.

First Business Financial Services, Inc. (the “Company”, the “Bank”, or “First Business Bank”) (Nasdaq:FBIZ) reported record net income of $9.7 million, or $1.12 diluted earnings per share, in the first quarter 2021, compared to $6.1 million or $0.71 in the fourth quarter of 2020, and $3.3 million or $0.38 in the first quarter of 2020.

“Record earnings for the quarter and exceptional growth across our company are reflections of First Business Bank’s commitment to helping our clients succeed, and consistently expanding our client base,” President and Chief Executive Officer Corey Chambas said. “This performance is a direct result of our long record of investing in innovative niche financial services offerings, technology, and talent as well as our active focus on asset quality improvement. We believe we are very well-positioned for sustained double-digit loan and revenue growth and continued asset quality improvement.”

Quarterly Highlights

• Record Earnings. Net income hit a record $9.7 million for the quarter. While boosted by the impact of asset quality improvement and net loan recoveries, ongoing fundamental performance was also very strong. Driven by continued loan and fee income growth, top-line revenue was $28.1 million, a 20% increase from this time last year, and pre-tax, pre-provision return on average assets was 1.65% for the quarter.
• Continued Differentiated Loan Growth. Loans, excluding SBA Paycheck Protection Program (“PPP”) loans, grew $46.9 million, or 10% annualized in the first quarter. This continued the exceptional growth from 2020 driven by investments tied to our strategic plan to expand niche lending business lines and enhance and expand the business development teams across all our business lines and geographies.
• Asset Quality Continues to Improve. Non-performing assets declined 29% to $19.0 million, the second consecutive quarterly reduction of more than 25%. Over this two-quarter period, non-performing assets have declined $17.6 million from the 2020 peak in the third quarter of $36.7 million. The decrease in non-accrual loans for the quarter was principally due to loan payoffs and loans returning to accrual status.
• Fee Income. Fee income grew an impressive 23% annualized for the quarter and again exceeded our goal of 25% or more of total revenue. Private wealth continued to lead the way with fees earned on a record $2.4 billion in assets under management and administration. In addition, gain on sale of Small Business Administration loans exceeded $1 million again this quarter.
• PPP Update. Our participation in PPP has been a tremendous benefit to our clients and we are actively participating in the second phase of the program. As of March 31, 2021, the Company had $272.7 million in gross PPP loans outstanding and deferred processing fees outstanding of $5.1 million yet to be recognized into income. During the quarter, $2.2 million of processing fees were recognized.
• Tangible Book Value Increases. Tangible Book Value (“TBV”) per share grew by 11% annualized in the quarter. This is a continuation of strong and consistent TBV growth. TBV has increased for 18 consecutive years, at a compound annual growth rate of 8% over that time.

Quarterly Financial Results

(Unaudited)		As of and for the Three Months Ended
(Dollars in thousands, except per share amounts)		March 31, 2021				December 31, 2020				March 31, 2020
Net interest income		$	20,863			$	22,512			$	17,050
Adjusted non-interest income (1)		7,195				6,799				6,418
Operating revenue (1)		28,058				29,311				23,468
Operating expense (1)		17,449				17,591				15,897
Pre-tax, pre-provision adjusted earnings (1)		10,609				11,720				7,571
Less:
Provision for loan and lease losses		(2,068		)		4,322				3,182
Net loss on foreclosed properties		3				54				102
Amortization of other intangible assets		8				8				9
SBA recourse (benefit) provision		(130		)		(330		)		25
Impairment on tax credit investments		—				328				113
Add:
Net loss on sale of securities		—				—				(4		)
Income before income tax expense		12,796				7,338				4,136
Income tax expense		3,065				1,254				858
Net income		$	9,731			$	6,084			$	3,278
Earnings per share, diluted		$	1.12			$	0.71			$	0.38
Book value per share		$	24.83			$	24.06			$	22.83
Tangible book value per share (1)		$	23.43			$	22.66			$	21.44
Net interest margin		3.44		%		3.69		%		3.44		%
Adjusted net interest margin (1)		3.20		%		3.25		%		3.32		%
Efficiency ratio (1)		62.19		%		60.02		%		67.74		%
Return on average assets		1.51		%		0.93		%		0.62		%
Pre-tax, pre-provision adjusted return on average assets (1)		1.65		%		1.80		%		1.44		%
Return on average equity		18.48		%		11.92		%		7.14		%
Period-end loans and leases receivable		$	2,235,112			$	2,145,970			$	1,743,399
Period-end loans and leases receivable, excluding net PPP loans		$	1,967,545			$	1,920,647			$	1,743,399
Average loans and leases receivable		$	2,182,958			$	2,185,662			$	1,733,742
Period-end in-market deposits		$	1,737,226			$	1,683,008			$	1,383,299
Average in-market deposits		$	1,722,107			$	1,690,433			$	1,366,142
Allowance for loan and lease losses		$	28,982			$	28,521			$	22,748
Non-performing assets		$	19,023			$	26,651			$	29,566
Allowance for loan and lease losses as a percent of total gross loans and leases		1.29		%		1.33		%		1.30		%
Allowance for loan and lease losses as a percent of total gross loans and leases, excluding net PPP loans		1.47		%		1.48		%		1.30		%
Non-performing assets as a percent of total assets		0.73		%		1.04		%		1.35		%
Non-performing assets as a percent of total assets, excluding net PPP loans		0.81		%		1.14		%		1.35		%

(1)

This is a non-GAAP financial measure. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate financial performance, provide greater understanding of ongoing operations, and enhance comparability of results with prior periods. See the section titled Non-GAAP Reconciliations at the end of this release for a reconciliation of GAAP financial measures to non-GAAP financial measures.

COVID-19 Update

Paycheck Protection Program

As of March 31, 2021, the Company had $272.7 million in gross PPP loans outstanding and deferred processing fees outstanding of $5.1 million. The processing fees are deferred and recognized over the contractual life of the loan, or accelerated at forgiveness, as an adjustment of yield using the interest method. During the three months ended March 31, 2021, the Company recognized $2.2 million of processing fees in loans and leases interest income in the unaudited Consolidated Statements of Income. The SBA provides a guaranty to the lender of 100% of principal and interest, unless the lender violated an obligation under the agreement. As loan losses are expected to be immaterial, if any at all, due to the guaranty, management excluded the PPP loans from the allowance for loan and lease losses calculation. Management funded these short-term loans primarily through a combination of excess cash held at the Federal Reserve and from an increase in in-market deposits.

Deferral Requests

The Company provided loan modifications deferring payments for certain borrowers impacted by COVID-19 who were current in their payments at the inception of the Company’s loan modification program. Excluding gross PPP loans, as of March 31, 2021, the Company had deferred loans outstanding of $13.0 million, or 0.7% of gross loans and leases compared to $323.2 million, or 18.6% of gross loans and leases as of June 30, 2020.

The following tables represent a breakdown of the deferred loan balances by industry segment and collateral type:

		As of
(Dollars in thousands)		March 31, 2021
						Collateral Type
Industries Description		Balance				Real Estate				Non-Real Estate
Real Estate and Rental and Leasing		$	9,425			$	9,425			$	—
Manufacturing		3,000				—				3,000
Professional, Scientific, and Technical Services		39				—				39
Other Services (except Public Administration)		328				212				116
Educational Services		195				195				—
Administrative and Support and Waste Management and Remediation Services		11				—				11
Total deferred loan balances		$	12,998			$	9,832			$	3,166

Exposure to Stressed Industries

Certain industries have been and are expected to be particularly impacted by social distancing, quarantines, and the economic impact of the COVID-19 pandemic, such as the following:

		As of
		March 31, 2021							December 31, 2020
Industries:		Balance				% Gross Loans and Leases (1)			Balance				% Gross Loans and Leases (1)
		(Dollars in Thousands)
Retail (2) (3)		$	74,534			3.8	%		$	62,719			3.3	%
Hospitality		82,604				4.2	%		80,832				4.2	%
Entertainment		13,943				0.7	%		14,208				0.7	%
Restaurants & food service		23,385				1.2	%		24,854				1.3	%
Total outstanding exposure		$	194,466			9.9	%		$	182,613			9.5	%

(1)		Excluding net PPP loans.
(2)		Includes $40.2 million and $48.9 million in loans secured by commercial real estate as of March 31, 2021 and December 31, 2020, respectively.
(3)		Includes $21.3 million and $7.7 million in fully collateralized asset-based loans as of March 31, 2021 and December 31, 2020, respectively.

As of March 31, 2021, the Company had no meaningful direct exposure to the energy sector, airline industry or retail consumer, and does not participate in Shared National Credits.

Because of the significant uncertainties related to the ultimate duration of the COVID-19 pandemic and its effects on our clients and prospects, and on the national and local economies as a whole, there can be no assurances as to how the crisis may ultimately affect the Company’s loan portfolio.

First Quarter 2021 Compared to Fourth Quarter 2020

Net interest income decreased $1.6 million, or 7.3%, to $20.9 million.

• Net interest income decreased primarily due to a reduction in fees in lieu of interest. Fees in lieu of interest, which can vary from quarter to quarter based on client-driven activity, totaled $3.1 million, compared to $4.7 million. Excluding fees in lieu of interest, net interest income increased $15,000, or 0.1%.
• Average loans and leases receivable, excluding net PPP loans in both periods of comparison, increased $37.3 million, or 7.8% annualized, to $1.941 billion.
• The yield on average interest-earning assets decreased 29 basis points to 3.93% from 4.22%. Excluding average net PPP loans, the PPP loan interest income of $603,000, and the aforementioned fees in lieu of interest, the yield earned on average interest-earning assets decreased 7 basis points to 3.69% from 3.76%. The rate paid for average total bank funding decreased five basis points to 0.40% from 0.45%. Total bank funding is defined as total deposits plus Federal Home Loan Bank (“FHLB”) advances, Federal Reserve Discount Window advances, and Federal Reserve PPPLF advances.
• Net interest margin decreased 25 basis points to 3.44% from 3.69%. Adjusted net interest margin, excluding fees in lieu of interest and other recurring but volatile components of net interest margin, decreased to 3.20% from 3.25%.

Provision for loan and lease losses decreased $6.4 million to a net benefit of $2.1 million.

• The decrease in provision for loan and lease losses included $2.5 million in net recoveries.
• Changes in the general reserve increased the provision for loan and lease losses $1.1 million principally due to qualitative factor changes in our commercial real estate portfolio related to the rate of growth in the segment and $557,000 due to loan growth. These increases were partially offset by a $984,000 reduction in general reserve due to historical loss rate updates from net recovery activity.

Non-interest income increased $396,000, or 5.8%, to $7.2 million.

• Private wealth management fee income increased $199,000, or 9.0% to $2.4 million. Private wealth and trust assets under management and administration measured a record $2.387 billion at March 31, 2021, up $137.5 million, or 24.5% annualized, primarily due to growth from new and existing clients and increased equity market values.
• Commercial loan interest rate swap fee income decreased $394,000 to $684,000 compared to $1.1 million. Interest rate swaps continue to be an attractive product for the Company’s commercial borrowers, although associated fee income can vary from period to period based on client demand and the interest rate environment in any given quarter.
• Gains on sale of SBA loans decreased $222,000 to $1.1 million compared to $1.3 million. The Company’s pipeline remains strong and management believes the gain on sale of traditional SBA loans (i.e., SBA loans unrelated to PPP loans), while variable based on timing of closings, will continue to increase annually at a measured pace.
• Other fee income increased $650,000 to $1.6 million compared to $914,000. The increase is primarily due to returns above the historical average from the Company’s investments in mezzanine funds.

Non-interest expense decreased $321,000, or 1.8%, to $17.3 million.

• Compensation expense increased $512,000, or 4.2%, to $12.7 million. The increase reflects new hires, annual merit increases, and payroll taxes on the annual cash bonus plan paid during the quarter.
• Other non-interest expense decreased $658,000 to $404,000. The decrease was principally due to a reduction in credit valuation adjustment (“CVA”) related to the commercial loan interest rate swap program. The CVA represents a change in the market value of the Company’s commercial loan interest rate swaps to estimate potential borrower credit risk within the portfolio. The CVA can vary from period to period based on the size of the portfolio, credit metrics, and the interest rate environment in any given quarter. The CVA was $291,000 and $461,000 as of March 31, 2021 and December 31, 2020, respectively.

Total period-end loans and leases receivable, excluding net PPP loans in both periods of comparison, increased $46.9 million, or 9.8% annualized, to $1.968 billion.

• Commercial and industrial (“C&I”) loans, excluding net PPP loans, increased $9.7 million, or 7.6% annualized, led by an increase in asset-based loans. Management believes the timely investments in producers in our counter cyclical commercial banking products, such as asset-based lending and accounts receivable financing, have positioned C&I lending to increase throughout the current economic cycle.
• Commercial real estate (“CRE”) loans increased $33.4 million, or 9.8% annualized, with growth coming from non-owner occupied and multi-family properties. Recent above-average CRE growth comes as established commercial lenders hired over the past 18 months were able to add high-quality relationships to the Bank.

Total period-end in-market deposits increased $54.2 million to $1.737 billion, or 12.9% annualized, and the average rate paid decreased four basis points to 0.16%.

• Transaction accounts increased $81.5 million, while certificates of deposits and money market accounts decreased $17.9 million and $9.4 million, respectively.
• Client preferences continued to shift away from term deposits due to the low interest rate environment, while management attributes the continued increase in transaction accounts to successful business development efforts and our existing clients’ preference for safety and soundness amid the economic uncertainty created by the COVID-19 pandemic.

Period-end wholesale funding, including FHLB advances, Federal Reserve Discount Window advances, Federal Reserve PPPLF advances, brokered deposit, and deposits gathered through internet deposit listing services, increased $14.3 million to $581.3 million.

• Wholesale deposits decreased $7.0 million to $165.5 million, due to contractual runoff. The average rate paid on wholesale deposits decreased 20 basis points to 0.76% and the weighted average original maturity of brokered certificates of deposit decreased to 3.9 years from 4.1 years.
• FHLB advances increased $21.3 million to $415.8 million. The average rate paid on FHLB advances increased six basis points to 1.36% and the weighted average original maturity increased to 5.7 years from 5.5 years.

Non-performing assets decreased $7.6 million, or 28.6%, to $19.0 million, or 0.73% of total assets, compared to $26.7 million, or 1.04% of total assets. The reduction in non-performing assets was principally due to loan payoffs and loans returning to accrual status. Excluding net PPP loans, non-performing assets were 0.81% of total assets, compared to 1.14% as of December 31, 2020.

The allowance for loan and lease losses increased $461,000, or 1.6%, due to an increase in the general reserve from loan growth and qualitative factor changes related to the rate of growth in our commercial real estate portfolio, partially offset by historical loss rate updates from net recovery activity. While a degree of uncertainty remains in the economy due to the COVID-19 pandemic, we will take a measured approach to releasing general reserves moving forward.

• The allowance for loan and lease losses as a percent of total gross loans and leases was 1.29% compared to 1.33%.
• Excluding net PPP loans, the allowance for loan and leases losses as a percent of total gross loans and leases was 1.47%, compared to 1.48% as of December 31, 2020.

First Quarter 2021 Compared to First Quarter 2020

Net interest income increased $3.8 million, or 22.4%, to $20.9 million.

• The increase in net interest income reflects an increase in average gross loans and leases and an increase in fees collected in lieu of interest, partially offset by adjusted net interest margin compression. Fees in lieu of interest, which can vary from quarter to quarter, totaled $3.1 million compared to $798,000. Excluding fees in lieu of interest and interest income from PPP loans, net interest income increased $923,000, or 5.7%. Excluding net PPP loans, average gross loans and leases increased $207.0 million, or 11.9%.
• The yield on average interest-earning assets measured 3.93% compared to 4.72%. Excluding fees collected in lieu of interest and PPP loan interest income, the yield on average interest-earning assets excluding net PPP loans was 3.69%, compared to 4.56%. The decline in yields was primarily due to the decrease in LIBOR and Prime and related impact on variable-rate loans, in addition to the renewal of fixed-rate loans and reinvestment of security cash flows at historically low interest rates. The rate paid for average total bank funding decreased 84 basis points to 0.40% from 1.24%. The average target federal funds rate decreased 115 basis points during this time period of comparison.
• Net interest margin was 3.44% in both periods of comparison. Adjusted net interest margin decreased 12 basis points to 3.20% from 3.32%.

Non-interest income increased $781,000, or 12.2%, to $7.2 million.

• Gains on sale of SBA loans increased $813,000 to $1.1 million compared to $265,000.
• Private wealth management fee income increased $295,000, or 14.0%, to $2.4 million. Private wealth and trust assets under management and administration measured a record $2.387 billion at March 31, 2021, up $722.1 million, or 43.4%.
• Other fee income increased $507,000, or 48.0%, to $1.6 million compared to $1.1 million. The increase is primarily due to returns above the historical average from the Company’s investments in mezzanine funds.
• Commercial loan interest rate swap fee income decreased $997,000 to $684,000 compared to $1.7 million.

Non-interest expense increased $1.2 million, or 7.3%, to $17.3 million. Operating expense increased $1.6 million, or 9.8%, to $17.4 million.

• Compensation expense increased $1.6 million, or 14.5%, to $12.7 million. Average full-time equivalent employees increased to 305, up 6.6% for the quarter ended March 31, 2021, compared to 286 for the quarter ended March 31, 2020. The increase reflects new hires, annual merit increases, and a $494,000 increase in the annual corporate incentive plan accrual compared to a reduction to the same accrual during the first quarter of 2020 due to uncertainty amid the COVID-19 pandemic.
• Computer software expense increased $226,000 to $1.1 million compared to $889,000. The increase was principally due to investments in technology platforms to improve the client experience and continued strategic focus on scaling the Bank to efficiently execute our growth strategy.
• FDIC insurance expense was $362,000, an increase of $154,000. Management expects FDIC insurance expense to increase commensurate with future asset growth.
• Other non-interest expense decreased $412,000, or 50.5%, to $404,000. The decrease was principally due to a decrease in business-related travel expenses due to the Company’s adherence to COVID-19 restrictions and a reduction in credit valuation adjustment (“CVA”) related to the commercial loan interest rate swap program. There was no CVA as of March 31, 2020.

Total period-end loans and leases receivable, excluding net PPP loans in both periods of comparison, increased $224.1 million, or 12.9%, to $1.968 billion.

• C&I loans, excluding net PPP loans, decreased $3.2 million, or 0.6%.
• CRE loans increased $232.1 million, or 20.0%, generally driven by an increase across all CRE categories.

Total period-end in-market deposits increased $353.9 million, or 25.6%, to $1.737 billion and the average rate paid decreased 80 basis points to 0.16%.

• Transaction accounts and money market accounts increased $413.6 million and $22.2 million, respectively.
• Certificates of deposits decreased $81.9 million as client preferences continued to shift towards more liquid products due to the low interest rate environment.

Period-end wholesale funding increased $76.0 million to $581.3 million.

• Wholesale deposits increased $48.7 million to $165.5 million mainly due to adding non-maturity brokered deposits at a favorable rate compared to alternative funding sources. Excluding these deposits, wholesale deposits decreased as the existing portfolio runoff is replaced by in-market deposits and lower cost FHLB advances to match-fund long-term fixed rate loans and fund loan growth. The average rate paid on brokered certificates of deposit decreased 181 basis points to 0.76% and the weighted average original maturity decreased to 3.9 years from 4.8 years.
• FHLB advances increased $27.3 million to $415.8 million. The average rate paid on FHLB advances decreased 55 basis points to 1.36% and the weighted average original maturity decreased to 5.7 years from 5.9 years.

Non-performing assets decreased to $19.0 million, or 0.73% of total assets, compared to $29.6 million, or 1.35% of total assets. Excluding net PPP loans, non-performing assets were 0.81% of total assets as of March 31, 2021.

The allowance for loan and lease losses increased 27.4% primarily due to an increase in the general and specific reserve driven by the COVID-19 pandemic.

• The allowance for loan and lease losses as a percent of total gross loans and leases was 1.29% compared to 1.30%.
• Excluding net PPP loans, the allowance for loan and leases losses as a percent of total gross loans and leases was 1.47% as of March 31, 2021.

About First Business Financial Services, Inc.

First Business Financial Services, Inc., (Nasdaq: FBIZ) is the parent company of First Business Bank. First Business Bank specializes in Business Banking, including Commercial Banking and Specialty Finance, Private Wealth, and Bank Consulting services, and through its refined focus, delivers unmatched expertise, accessibility, and responsiveness. Specialty Finance solutions are delivered through First Business Bank’s wholly owned subsidiary First Business Specialty Finance, LLC. For additional information, visit www.firstbusiness.bank.

This release may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which reflect First Business Bank’s current views with respect to future events and financial performance. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results, or other developments. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, uncertainties, and other factors that may cause actual results to differ materially from the views, beliefs, and projections expressed in such statements. Such statements are subject to risks and uncertainties, including among other things:

• Adverse changes in the economy or business conditions, either nationally or in our markets, including, without limitation, the adverse effects of the COVID-19 pandemic on the global, national, and local economy.
• The effect of the COVID-19 pandemic on the Company’s credit quality, revenue, and business operations.
• Competitive pressures among depository and other financial institutions nationally and in our markets.
• Increases in defaults by borrowers and other delinquencies.
• Our ability to manage growth effectively, including the successful expansion of our client service, administrative infrastructure, and internal management systems.
• Fluctuations in interest rates and market prices.
• Changes in legislative or regulatory requirements applicable to us and our subsidiaries.
• Changes in tax requirements, including tax rate changes, new tax laws, and revised tax law interpretations.
• Fraud, including client and system failure or breaches of our network security, including our internet banking activities.
• Failure to comply with the applicable SBA regulations in order to maintain the eligibility of the guaranteed portion of SBA loans.

For further information about the factors that could affect the Company’s future results, please see the Company’s annual report on Form 10-K for the year ended December 31, 2020 and other filings with the Securities and Exchange Commission.

SELECTED FINANCIAL CONDITION DATA
(Unaudited)		As of
(in thousands)		March 31, 2021				December 31, 2020				September 30, 2020				June 30, 2020				March 31, 2020
Assets
Cash and cash equivalents		$	58,874			$	56,909			$	51,728			$	42,391			$	94,986
Securities available-for-sale, at fair value		173,261				183,925				179,274				171,680				175,564
Securities held-to-maturity, at amortized cost		24,783				26,374				28,897				29,826				30,774
Loans held for sale		6,576				8,695				15,049				13,672				6,331
Loans and leases receivable		2,235,112				2,145,970				2,170,299				2,056,863				1,743,399
Allowance for loan and lease losses		(28,982		)		(28,521		)		(30,817		)		(27,464		)		(22,748		)
Loans and leases receivable, net		2,206,130				2,117,449				2,139,482				2,029,399				1,720,651
Premises and equipment, net		1,923				1,998				2,130				2,266				2,427
Foreclosed properties		31				34				613				1,389				1,669
Right-of-use assets		5,486				5,814				6,141				6,272				6,590
Bank-owned life insurance		52,537				52,188				51,798				51,433				51,056
Federal Home Loan Bank stock, at cost		14,941				13,578				15,153				13,470				9,733
Goodwill and other intangible assets		12,055				12,018				12,024				11,925				11,872
Derivatives		26,104				49,377				58,210				58,808				53,096
Accrued interest receivable and other assets		38,017				39,478				41,348				36,283				31,625
Total assets		$	2,620,718			$	2,567,837			$	2,601,847			$	2,468,814			$	2,196,374
Liabilities and Stockholders’ Equity
In-market deposits		$	1,737,226			$	1,683,008			$	1,667,245			$	1,620,616			$	1,383,299
Wholesale deposits		165,492				172,508				154,130				89,759				116,827
Total deposits		1,902,718				1,855,516				1,821,375				1,710,375				1,500,126
Federal Home Loan Bank advances and other borrowings		448,417				419,167				483,517				465,007				412,892
Junior subordinated notes		10,065				10,062				10,058				10,054				10,051
Lease liabilities		6,040				6,386				6,728				6,877				7,211
Derivatives		29,565				54,927				64,403				65,390				59,260
Accrued interest payable and other liabilities		9,422				15,617				14,981				13,549				11,177
Total liabilities		2,406,227				2,361,675				2,401,062				2,271,252				2,000,717
Total stockholders’ equity		214,491				206,162				200,785				197,562				195,657
Total liabilities and stockholders’ equity		$	2,620,718			$	2,567,837			$	2,601,847			$	2,468,814			$	2,196,374

STATEMENTS OF INCOME
(Unaudited)		As of and for the Three Months Ended
(Dollars in thousands, except per share amounts)		March 31, 2021				December 31, 2020				September 30, 2020				June 30, 2020				March 31, 2020
Total interest income		$	23,806			$	25,770			$	22,276			$	22,761			$	23,372
Total interest expense		2,943				3,258				3,655				3,873				6,322
Net interest income		20,863				22,512				18,621				18,888				17,050
Provision for loan and lease losses		(2,068		)		4,322				3,835				5,469				3,182
Net interest income after provision for loan and lease losses		22,931				18,190				14,786				13,419				13,868
Private wealth management service fees		2,407				2,208				2,167				2,124				2,112
Gain on sale of SBA loans		1,078				1,300				760				574				265
Service charges on deposits		917				887				881				829				818
Loan fees		545				412				478				451				485
Net loss on sale of securities		—				—				—				—				(4		)
Swap fees		684				1,078				2,446				1,655				1,681
Other non-interest income		1,564				914				676				686				1,057
Total non-interest income		7,195				6,799				7,408				6,319				6,414
Compensation		12,657				12,145				11,857				10,796				11,052
Occupancy		552				556				570				554				572
Professional fees		866				909				943				859				819
Data processing		770				668				679				710				677
Marketing		391				411				356				352				461
Equipment		246				294				310				304				291
Computer software		1,115				1,028				1,017				966				889
FDIC insurance		362				479				312				239				208
Collateral liquidation cost		94				47				45				115				121
Net loss (gain) on foreclosed properties		3				54				(121		)

FAQ

What is First Business Financial Services' net income for Q1 2021?

First Business Financial Services reported a net income of $9.7 million for Q1 2021.

How much did First Business Financial Services' revenue increase in Q1 2021?

The revenue of First Business Financial Services increased by 20% year-over-year to $28.1 million in Q1 2021.

What was the growth rate of loans for First Business Financial Services in Q1 2021?

Loans grew by $46.9 million, or 10% annualized, in Q1 2021, excluding PPP loans.

What are the non-performing assets of First Business Financial Services as of Q1 2021?

Non-performing assets decreased by 29% to $19.0 million as of Q1 2021.

What was the tangible book value per share for First Business Financial Services in Q1 2021?

Tangible book value per share for First Business Financial Services grew by 11% annualized in Q1 2021.