tiprankstipranks
Trending News
More News >
First Business Financial Services (FBIZ)
NASDAQ:FBIZ

First Business Financial (FBIZ) AI Stock Analysis

Compare
137 Followers

Top Page

FB

First Business Financial

(NASDAQ:FBIZ)

Rating:73Outperform
Price Target:
$63.00
▲(15.19%Upside)
First Business Financial Services demonstrates strong financial performance and attractive valuation, supported by robust earnings growth and strategic initiatives. Technical indicators show bullish momentum but caution is advised due to overbought signals. The positive earnings call further supports the stock's potential, despite some noted challenges.

First Business Financial (FBIZ) vs. SPDR S&P 500 ETF (SPY)

First Business Financial Business Overview & Revenue Model

Company DescriptionFirst Business Financial Services, Inc. operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals. The company offers deposit products, such as non-interest-bearing transaction accounts, interest-bearing transaction accounts, money market accounts, time deposits, and certificates of deposit, as well as credit cards. It also provides loan products, including commercial real estate loans, commercial and industrial loans, small business administration loans, and direct financing leases, as well as consumer and other loans comprising home equity, first and second mortgage, and other personal loans for professional and executive clients. The company offers commercial lending, asset-based lending, equipment financing, accounts receivable financing, vendor financing, floorplan financing, treasury management services, and company retirement plans; trust and estate administration, financial planning, investment management, and private banking services; and investment portfolio administrative, asset-liability management, and asset-liability management process validation services for other financial institutions. First Business Financial Services, Inc. was founded in 1909 and is headquartered in Madison, Wisconsin.
How the Company Makes MoneyFirst Business Financial (FBIZ) generates revenue through a diverse range of financial services tailored to meet the needs of small and medium-sized enterprises. The company's primary revenue streams include interest income from loans and leases, fee income from treasury management and asset-based lending services, and gains from the sale of financial products. Additionally, FBIZ benefits from strategic partnerships with other financial institutions, enhancing its product offerings and market reach. The company focuses on building strong client relationships to ensure a stable and recurring revenue base.

First Business Financial Earnings Call Summary

Earnings Call Date:Apr 24, 2025
(Q1-2025)
|
% Change Since: 10.20%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong quarter characterized by solid earnings growth, robust deposit and loan growth, and stable asset quality. However, challenges were noted in the equipment finance portfolio and ongoing economic uncertainties related to trade policy and potential recession. Despite these concerns, the company maintains a positive outlook for 2025, driven by strategic initiatives and a diversified revenue stream.
Q1-2025 Updates
Positive Updates
Strong Financial Performance
First Business Financial Services reported a 23% increase in pre-tax pre-provision adjusted earnings over last year's first quarter, and earnings per share rose by 27% to $1.32. Tangible book value per share grew by 14%.
Robust Deposit Growth
The company achieved double-digit core deposit growth, with deposits growing $488 million or 18% from last year's first quarter. Core deposits grew by $66 million, over 11%.
Loan and Revenue Growth
Loan balances grew by $275 million or almost 10% over the same period last year, meeting the company's long-term growth goal. First quarter revenue increased nearly 13% compared to the first quarter of 2024.
Stable Asset Quality
Non-performing assets declined by $4.3 million from the linked quarter, and the company's weighted average risk rating showed minimal movement.
SBA Lending Momentum
SBA lending sustained its momentum with strong loan sale premiums expected to be a meaningful driver of revenue in 2025.
Negative Updates
Equipment Finance Portfolio Challenges
Net charge-offs increased due to specific reserves on credits in the transportation sector of the equipment finance portfolio, impacting the overall allowance for credit losses.
Economic Uncertainty
There is a rising level of uncertainty related to changes in US trade policy and potential economic recession, which could impact the company's growth.
Quarterly Variability in Fee Income
Swap fee income decreased by $475,000 in the first quarter, showing ongoing variability affected by CRE activity, the rate environment, and client preferences.
Company Guidance
During the First Business Financial Services First Quarter 2025 Earnings Conference Call, CEO Corey Chambas highlighted a robust quarter marked by a 23% increase in pre-tax pre-provision adjusted earnings compared to the previous year, with earnings per share rising by 27% to $1.32. The company achieved a 10% growth in loans and an 18% increase in total deposits over the same period last year. This growth was driven by a 27% annualized increase in C&I loan balances and a strong performance in SBA lending. The net interest margin stood at 3.69%, reflecting stable balance sheet management. Non-performing assets decreased by $4.3 million, contributing to a 14% growth in tangible book value per share. The company remains focused on maintaining strong asset quality and executing its strategic plan for long-term growth.

First Business Financial Financial Statement Overview

Summary
First Business Financial displays strong financial health across income, balance sheet, and cash flow metrics. The company shows consistent revenue and profit growth, effective equity utilization, and solid cash flow management. However, attention should be given to maintaining operational efficiency and managing investing activities to sustain long-term growth.
Income Statement
82
Very Positive
The income statement shows a positive trajectory with steady revenue growth over recent years. The latest TTM data indicates a gross profit margin of 113.07% and a net profit margin of 29.79%, both reflecting strong profitability. Additionally, there is a notable revenue growth rate of 8.57% from 2023 to 2024. However, the EBIT margin stands at 25.83%, showing a slight decline from previous periods, requiring attention to operational efficiency.
Balance Sheet
75
Positive
The balance sheet reveals a stable financial position, indicated by a decreasing debt-to-equity ratio from 1.64 in 2020 to 0.52 in the latest TTM, emphasizing improved financial leverage. The equity ratio remains healthy at 8.52%, showcasing solid equity backing. Return on Equity (ROE) is also robust at 13.86%, demonstrating effective equity utilization. However, caution is advised due to the overall low equity ratio, which could pose risks during economic downturns.
Cash Flow
78
Positive
Cash flow analysis shows consistent operating cash flows, with a recent increase in free cash flow growth to 5.11% year-over-year. The operating cash flow to net income ratio of 1.29 indicates strong cash generation relative to earnings. Additionally, the free cash flow to net income ratio is 1.29, reflecting efficient cash management. However, significant negative investing cash flows may warrant further analysis.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue266.95M262.38M226.24M150.80M124.09M118.72M
Gross Profit148.87M144.63M135.71M131.72M118.56M84.81M
EBITDA57.83M54.89M50.77M56.31M50.58M21.77M
Net Income46.57M44.24M37.03M40.86M35.76M16.98M
Balance Sheet
Total Assets3.94B3.85B3.51B2.98B2.65B2.57B
Cash, Cash Equivalents and Short-Term Investments530.01M499.09M436.52M314.71M262.81M240.83M
Total Debt294.19M327.98M339.87M466.98M418.93M435.62M
Total Liabilities3.61B3.52B3.22B2.72B2.42B2.36B
Stockholders Equity336.06M328.59M289.59M260.64M232.42M206.16M
Cash Flow
Free Cash Flow60.20M57.27M49.41M35.42M35.60M26.37M
Operating Cash Flow60.11M57.49M52.29M38.65M35.99M26.64M
Investing Cash Flow-343.17M-328.47M-506.85M-245.27M-111.01M-454.51M
Financing Cash Flow381.64M289.17M491.38M252.19M75.22M417.68M

First Business Financial Technical Analysis

Technical Analysis Sentiment
Positive
Last Price54.69
Price Trends
50DMA
48.87
Positive
100DMA
48.75
Positive
200DMA
47.57
Positive
Market Momentum
MACD
1.38
Negative
RSI
69.24
Neutral
STOCH
90.62
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FBIZ, the sentiment is Positive. The current price of 54.69 is above the 20-day moving average (MA) of 49.64, above the 50-day MA of 48.87, and above the 200-day MA of 47.57, indicating a bullish trend. The MACD of 1.38 indicates Negative momentum. The RSI at 69.24 is Neutral, neither overbought nor oversold. The STOCH value of 90.62 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FBIZ.

First Business Financial Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$491.22M13.2911.27%15.07%53.76%
77
Outperform
$422.78M14.8213.33%1.45%14.44%16.49%
73
Outperform
$454.96M9.9414.36%2.12%12.02%26.09%
73
Outperform
$546.90M13.1516.22%2.58%23.96%47.39%
67
Neutral
$17.07B11.919.69%3.75%11.66%-9.47%
67
Neutral
$452.67M25.092.27%3.71%24.39%-56.57%
52
Neutral
$429.98M16.43-6.53%6.91%-5.55%-242.39%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FBIZ
First Business Financial
53.74
18.40
52.07%
FFIC
Flushing Financial
12.60
0.70
5.88%
GCBC
Greene County Bancorp
24.83
-4.82
-16.26%
NRIM
Northrim Bancorp
97.87
44.01
81.71%
COFS
ChoiceOne Financial Services
30.21
5.45
22.01%
TCBX
Third Coast Bancshares
34.83
14.10
68.02%

First Business Financial Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
First Business Financial Expands Board, Appoints New Director
Positive
May 7, 2025

On May 1, 2025, First Business Financial Services, Inc. expanded its Board of Directors from seven to eight members and appointed Jason R. Graham as a Class II Director. Mr. Graham, a seasoned financial executive with a strong background in financial strategy and capital allocation, was also appointed to the Audit Committee. His extensive experience in financial leadership roles at various companies is expected to contribute significantly to the company’s strategic growth and shareholder value creation.

Executive/Board ChangesBusiness Operations and Strategy
First Business Financial Announces CEO Retirement Plan
Positive
May 5, 2025

On May 5, 2025, First Business Financial Services, Inc. announced that its CEO, Corey Chambas, will retire on May 2, 2026, with President and COO Dave Seiler set to succeed him. Chambas, who has been with the company since 1993 and CEO since 2006, will remain on the board of directors. The transition is expected to be smooth, with Seiler’s extensive experience in the banking industry and his alignment with the company’s culture and strategic vision. This leadership change is seen as a continuation of the company’s growth and commitment to its stakeholders.

Business Operations and StrategyFinancial Disclosures
First Business Financial Highlights Strong Q1 2025 Performance
Positive
Apr 30, 2025

On April 30, 2025, First Business Financial Services, Inc. released an investor presentation highlighting its strong first-quarter performance for 2025. The company reported a 14% growth in tangible book value, driven by robust loan and deposit growth, and stable asset quality. Private wealth management assets reached a record $3.425 billion, with fee income increasing by 12.2% compared to the previous year. The company’s strategic plan aims to build long-term shareholder value by focusing on deposit efficiency, profitability, and operational excellence. Despite challenges in the banking sector, First Business Financial Services maintains a strong market position with a focus on sustainable growth and profitability.

Dividends
First Business Financial Declares Quarterly Cash Dividend
Neutral
Apr 28, 2025

On April 25, 2025, First Business Financial Services, Inc. announced that its Board of Directors declared a quarterly cash dividend of $0.29 per share on its common stock, maintaining the same dividend as in January 2025. This dividend, representing a yield of 2.42% and a payout ratio of 22% based on first quarter earnings, will be payable on May 23, 2025, to shareholders of record on May 9, 2025. Additionally, a dividend of $17.50 per share was declared on its 7% Series A Preferred Stock, payable on June 16, 2025, to shareholders of record on May 30, 2025.

Business Operations and StrategyFinancial Disclosures
First Business Financial Reports Q1 2025 Net Income
Positive
Apr 24, 2025

On April 24, 2025, First Business Financial Services, Inc. reported a net income of $11.0 million for the first quarter of 2025, reflecting a decrease from the previous quarter but an increase from the same quarter in 2024. The company experienced robust growth in loans and deposits, with loans increasing by 9% and core deposits by 11%. This growth contributed to a 14% expansion in tangible book value from the prior year. The company maintained a strong net interest margin and saw a significant increase in operating revenue, driven by loan growth and a rise in fee income. Private wealth management also expanded, with assets under management reaching a record $3.425 billion. The company’s strategic focus on consistent underwriting and operational efficiency positions it for continued growth, aiming for 10% annual growth in loans, deposits, and revenue.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 05, 2025