First Business Financial Services, Inc. (NASDAQ: FBIZ) announced robust financial results for the second quarter of 2025 during a conference call on July 25, 2025. The company achieved a growth trajectory that reflects its commitment to a strategic plan aimed at double-digit annual growth. Key highlights include a significant increase in core deposits and loans, alongside improved earnings metrics.
In his opening remarks, CEO Corey Chambas emphasized the success of the company’s strategic initiatives. “We are pleased to report another outstanding quarter,” he stated. “During this quarter, our team again produced double-digit core deposit growth that outpaced our robust expansion of loans.” The company recorded a 13% year-over-year increase in pretax pre-provision adjusted earnings and a 10% rise in earnings per share (EPS). Additionally, tangible book value per share grew by an impressive 14% compared to the previous year.
Strong Financial Metrics and Strategic Growth
The earnings results demonstrate First Business Financial Services’ ability to maintain a strong net interest margin and a decline in net charge-offs. President and Chief Operating Officer Dave Seiler highlighted the balance sheet growth, with core deposits increasing by $70 million, representing an annualized growth rate of 11%. This growth is indicative of the company’s strong position in the market, particularly in the area of service charges on deposits, which also rose by 16% compared to the same quarter last year.
Loan balances saw a notable increase of approximately $267 million, up 9% from the same period last year. The company’s focus on conventional and niche commercial and industrial (C&I) products contributed to this growth. “Total C&I balances expanded $30 million or 10% annualized,” Seiler explained. The demand for asset-based lending and floorplan financing remains robust, driven by a new leadership team in asset-based lending and high client satisfaction levels.
The performance of the Private Wealth division was particularly noteworthy, with assets under management growing 36% annualized during the quarter and 15% year-over-year. Seiler attributed this growth to strong relationship management and client transfers, underscoring the division’s integral role in the overall revenue generation of the company.
Outlook and Future Leadership Transition
Despite a positive quarter, the company faced challenges in fee income, particularly due to a decrease in Small Business Administration (SBA) loan sale premiums. CFO Brian Spielmann discussed the competitive landscape affecting loan pricing and the variability in individual fee income contributions. He noted that the company expects fee income to grow at a long-term target rate of 10% annually.
Looking ahead, the company is optimistic about its growth prospects for the remainder of 2025. Chambas reported a year-to-date performance that included 10% growth in operating revenue and 17% in net income compared to the first half of 2024. The strategic focus on core deposit growth remains critical as the company aims to maintain a balance of 75% in-market deposits against 25% wholesale funding.
In a significant leadership announcement, Chambas revealed his plans for retirement, with Seiler set to succeed him as CEO in May 2026. Chambas praised Seiler’s commitment to the future of First Business Bank, indicating a smooth transition that will continue the company’s trajectory of growth and innovation.
The conference concluded with a question-and-answer session, during which analysts sought clarification on loan growth and deposit competition. Both Chambas and Seiler expressed confidence in the company’s ability to navigate market dynamics while remaining focused on strategic initiatives that support long-term growth.
Overall, First Business Financial Services demonstrated strong performance in Q2 2025, reinforcing its position as a leading commercial banking institution and setting the stage for continued success in the coming years.
