First Business Financial (FBIZ) AI Stock Analysis

• Market Cap: $494.88M
• Dividend Yield: 2.08%
• Average Volume (3M): 25.29K
• Price to Earnings (P/E): 9.8
• Beta (1Y): 0.73
• Revenue Growth: 8.21%
• EPS Growth: 29.65%
• Country: US
• Employees: 354
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 1.58
• Shares Outstanding: 8,324,258
• 10 Day Avg. Volume: 17,199
• 30 Day Avg. Volume: 25,287
• PEG Ratio: 0.53
• Price to Book (P/B): 1.19
• Price to Sales (P/S): 1.59
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.43
• Enterprise Value/Revenue: 2.55
• Enterprise Value/Gross Profit: 4.48
• Enterprise Value/Ebitda: 11.17
• 1Y Price Target: $66.50
• Price Target Upside: 11.86% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 77 Outperform
• Price Target: $67.00 ▲(12.70% Upside)

FBIZ scores well on strong profitability and improving leverage with good cash generation, supported by bullish technical trends and an attractive low P/E. The score is moderated by margin mix/cost signals (low gross margin), limited missing financial context, and manageable but notable credit/NIM sensitivity highlighted on the earnings call.

Positive Factors

Strong profitability & cash conversion

Sustained net margin above 20% and FCF-to-net-income near 1 indicate high earnings quality and strong cash conversion. This durable cash generation supports dividend increases, organic growth funding, and reserve building, improving resilience to cyclical revenue or credit swings over months.

Core deposit funding strength

Double‑digit core deposit growth provides a stable, low‑cost funding base that reduces reliance on wholesale markets. Persistent deposit inflows support loan growth, preserve net interest margin, and give management flexibility on pricing and balance‑sheet mix over the medium term.

Sustained operating leverage and efficiency gains

Consistent positive operating leverage and a sub‑60% efficiency ratio reflect improving cost discipline and scalable operations. Structural efficiency gains boost earnings sensitivity to revenue growth, enabling higher return on equity and capital deployment opportunities across a 2–6 month horizon and beyond.

Negative Factors

CRE downgrade and one-time NII hit

A concentrated CRE downgrade tied to a single borrower produced an interest reversal that compressed NII and demonstrates credit concentration risk. Such idiosyncratic CRE exposures can cause episodic earnings volatility and require ongoing monitoring of collateral values and reserves.

Relatively low gross margin

A structurally low gross margin (15% TTM) suggests limited spread or product mix compression versus peers. Lower gross margin constrains the bank's ability to absorb higher funding or personnel costs and reduces cushion for sustained margin pressure over the medium term.

Volatile fee/partnership income

Fee income showed variability driven by accounting reclassifications and nonrecurring items, reducing predictability of noninterest revenue. Persistent volatility in partnership and other fee streams weakens diversification benefits and complicates medium‑term earnings planning and capital allocation.

First Business Financial Business Overview & Revenue Model

Company Description

First 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 Money

First Business Financial generates revenue primarily through interest income from loans, which includes commercial and personal loans offered to businesses and consumers. Additionally, the company earns revenue from fees associated with its deposit accounts and treasury management services, which are charged for account maintenance and transaction processing. Investment income from its securities portfolio also contributes to revenue. Key partnerships with local businesses and community organizations enhance its outreach and customer base, while a strong focus on customer service and tailored financial solutions helps to retain clients and drive growth.

First Business Financial Financial Statement Overview

Summary

Overall fundamentals are solid: healthy profitability (net margin 20.34%) and improving leverage (debt-to-equity 0.77) supported by positive free cash flow growth (6.11%) and strong cash conversion (FCF-to-net income ~1). Offsets include a low gross margin (15.22%) and some missing balance-sheet/cash-flow context (e.g., equity ratio, operating cash flow to net income).

Income Statement

First Business Financial shows a solid revenue growth trajectory with a TTM revenue growth rate of 2.59%. The gross profit margin is relatively low at 15.22% for TTM, indicating potential cost management issues. However, the net profit margin of 20.34% suggests effective control over expenses. EBIT and EBITDA margins are healthy, reflecting strong operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.77 in TTM from higher levels in previous years, indicating better leverage management. Return on equity is strong at 15.03%, showcasing effective use of equity to generate profits. However, the equity ratio is not provided, which limits a full assessment of financial stability.

Cash Flow

Free cash flow growth is positive at 6.11% in TTM, indicating improved cash generation. The free cash flow to net income ratio is nearly 1, suggesting that net income is effectively translating into cash. However, the operating cash flow to net income ratio is not available, limiting a complete cash flow analysis.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	277.15M	279.25M	262.38M	226.24M	150.80M	124.09M
Gross Profit	158.05M	159.97M	144.63M	135.71M	131.72M	118.56M
EBITDA	63.35M	60.45M	54.89M	50.77M	56.31M	50.58M
Net Income	51.40M	50.32M	44.24M	37.03M	40.86M	35.76M
Balance Sheet
Total Assets	4.03B	4.08B	3.85B	3.51B	2.98B	2.65B
Cash, Cash Equivalents and Short-Term Investments	45.82M	46.68M	499.09M	436.52M	314.71M	262.81M
Total Debt	274.36M	266.77M	327.98M	339.87M	466.98M	418.93M
Total Liabilities	3.68B	3.71B	3.52B	3.22B	2.72B	2.42B
Stockholders Equity	358.32M	371.58M	328.59M	289.59M	260.64M	232.42M
Cash Flow
Free Cash Flow	66.92M	0.00	57.27M	49.41M	35.42M	35.60M
Operating Cash Flow	67.52M	0.00	57.49M	52.29M	38.65M	35.99M
Investing Cash Flow	-424.38M	0.00	-328.47M	-506.85M	-245.27M	-111.01M
Financing Cash Flow	269.24M	0.00	289.17M	491.38M	252.19M	75.22M

First Business Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 59.45
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 59.45 is above the 20-day moving average (MA) of 56.77, above the 50-day MA of 55.62, and above the 200-day MA of 51.13, indicating a bullish trend. The MACD of 0.94 indicates Negative momentum. The RSI at 64.65 is Neutral, neither overbought nor oversold. The STOCH value of 85.15 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RRBI	78 Outperform	$610.46M	13.95	12.03%	0.73%	7.81%	26.91%
FBIZ	77 Outperform	$494.88M	9.79	15.02%	2.08%	8.21%	29.65%
HBCP	73 Outperform	$485.42M	10.49	10.86%	1.92%	6.25%	24.92%
COFS	73 Outperform	$457.47M	15.08	6.16%	3.69%	50.36%	-56.64%
CARE	72 Outperform	$487.90M	15.96	7.71%	―	6.62%	117.46%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
KRNY	64 Neutral	$523.09M	16.01	3.92%	5.80%	4.38%	―

First Business Financial Corporate Events

First Business Financial Highlights Strong Q4 Momentum, Strategy

On February 3, 2026, First Business Financial Services posted a new fourth-quarter 2025 investor presentation outlining solid operating momentum and progress on its 2024–2028 strategic plan, highlighted by 15% year-over-year growth in pre-tax, pre-provision earnings, 14% net income growth, and an efficiency ratio improvement to 56.61% in the quarter and 58.78% for 2025, marking a fourth consecutive year of positive operating leverage. The presentation underscored continued loan and core deposit expansion—loans up 8.4% year-over-year and core deposits up 11.5%—a 3.53% net interest margin supported by disciplined pricing, strong tangible book value per share growth of 13.7% over the year, and a 17% dividend increase, while also emphasizing a deposit-centric, relationship-driven model that has produced double-digit five-year CAGRs in loans, core deposits, and tangible book value, above-peer total shareholder returns, and measurable progress toward profitability, funding mix, and employee engagement targets, reinforcing FBIZ’s positioning as a growing, efficiency-focused regional banking platform for investors and clients.

The most recent analyst rating on (FBIZ) stock is a Buy with a $70.00 price target. To see the full list of analyst forecasts on First Business Financial stock, see the FBIZ Stock Forecast page.

First Business Financial announces orderly board leadership transition

On January 29, 2026, First Business Financial Services, Inc. announced that longtime director Ralph R. Kauten, who has served on the Board since 2018, intends to retire from the Board at the conclusion of the company’s 2026 Annual Meeting of Shareholders, expected around April 24, 2026, in accordance with the firm’s Director Retirement Policy requiring retirement at age 75 and with no disagreements regarding the company’s operations, policies, or practices. Upon the effective date of Kauten’s retirement, Jason R. Graham will assume the role of Chair of the Audit Committee, signaling a planned and orderly leadership transition in the company’s board-level financial oversight and governance structure.

The most recent analyst rating on (FBIZ) stock is a Buy with a $64.00 price target. To see the full list of analyst forecasts on First Business Financial stock, see the FBIZ Stock Forecast page.

First Business Financial Posts Solid Q4 Results, Raises Dividend

On January 29, 2026, First Business Bank reported fourth quarter 2025 net income available to common shareholders of $13.1 million, or $1.58 per share, down modestly from $1.70 in the prior quarter and $1.71 a year earlier, but supported by continued balance sheet growth, a stronger efficiency ratio, and expanding tangible book value. Management highlighted robust core deposit growth of 12.5% annualized from the prior quarter and 11.5% year-on-year, as well as loan growth of 4.6% annualized quarter-on-quarter and 8.4% from the fourth quarter of 2024, even as elevated commercial real estate payoffs tempered lending momentum. Net interest margin came in at 3.53%, or 3.63% excluding a 10 basis point drag from non-accrual interest reversals tied largely to a single client, with executives stressing that overall credit quality across the performing portfolio remained stable. The bank’s efficiency ratio improved to 56.61% in the quarter and 58.78% for the full year, marking a fourth consecutive year of positive operating leverage, while tangible book value per share climbed nearly 16% annualized from the prior quarter and 13.7% from a year ago. For full-year 2025, First Business delivered more than 14% growth in both pre-tax, pre-provision adjusted earnings and earnings per share and maintained a 20-year track record of 10% compound annual EPS growth, enabling a 17% increase in its quarterly cash dividend to $0.34 per share—its 14th consecutive annual dividend hike—reinforcing the bank’s shareholder-return story and underscoring its confidence in sustaining double-digit growth targets.

The most recent analyst rating on (FBIZ) stock is a Buy with a $66.00 price target. To see the full list of analyst forecasts on First Business Financial stock, see the FBIZ Stock Forecast page.

First Business Financial Releases Investor Presentation

On November 10, 2025, First Business Financial Services, Inc. released an investor presentation detailing its recent financial performance and strategic plans. The company reported an 18% growth in pre-tax, pre-provision earnings and a 17% increase in net income for the first half of 2025 compared to the previous year. Notable achievements include a record $3.731 billion in private wealth management assets, 8.4% annualized loan growth, and an 11.4% increase in core deposits. The presentation also highlighted the company’s strategic goals for 2024-2028, focusing on sustainable profitability, operational excellence, and enhancing shareholder value.

The most recent analyst rating on (FBIZ) stock is a Buy with a $61.00 price target. To see the full list of analyst forecasts on First Business Financial stock, see the FBIZ Stock Forecast page.

First Business Financial Declares Quarterly Dividend

On November 6, 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 rate as in July 2025. The dividend, representing a 2.29% yield and a 17% payout ratio based on third-quarter earnings, will be payable on December 3, 2025. Additionally, a dividend of $17.50 per share on the 7% Series A Preferred Stock was declared, payable on December 15, 2025. This announcement reflects the company’s continued commitment to returning value to shareholders.

The most recent analyst rating on (FBIZ) stock is a Buy with a $61.00 price target. To see the full list of analyst forecasts on First Business Financial stock, see the FBIZ Stock Forecast page.