First Business Financial (FBIZ) AI Stock Analysis

• Market Cap: $459.42M
• Dividend Yield: 2.08%
• Average Volume (3M): 25.29K
• Price to Earnings (P/E): 9.1
• Beta (1Y): 0.77
• 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: 7.25
• Enterprise Value/Market Cap: 1.48
• Enterprise Value/Revenue: 2.44
• Enterprise Value/Gross Profit: 4.26
• Enterprise Value/Ebitda: 10.78
• 1Y Price Target: $66.50
• Price Target Upside: 18.39% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 6.03
• Revenue Forecast (FY): $181.22M

• Rating: 74 Outperform
• Price Target: $63.00 ▲(12.16% Upside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

The score is driven primarily by solid fundamentals (growth and profitability with improving leverage) and a positive guidance/sentiment profile from the earnings call, reinforced by an attractive low P/E and dividend. These positives are tempered by mixed technical momentum and bank-specific risks including NIM sensitivity and isolated credit issues.

Positive Factors

Revenue and Net Interest Income Growth

Sustained double-digit growth in NII and operating revenue demonstrates durable core banking momentum. Growth driven by expanding loan balances and deposit gathering supports recurring interest income, underwriting scale, and capacity to absorb expense growth while funding strategic reinvestment over the medium term.

Core Deposit and Balance Sheet Strength

Robust core deposit growth provides stable, lower-cost funding, reducing reliance on wholesale markets and supporting loan expansion. A growing deposit base improves liquidity and interest margin resilience, enabling the bank to finance higher-yielding commercial lending and sustain asset growth over multiple quarters.

Operating Leverage, Capital Growth and Dividend

Positive operating leverage over multiple years and rising tangible book indicate improving efficiency and capital generation. A meaningful dividend increase signals disciplined capital allocation and confidence in earnings durability, supporting shareholder returns while retaining capacity for loan growth and reserves.

Negative Factors

CRE Nonaccrual and NIM Sensitivity

A single CRE downgrade and the associated interest reversal highlight credit concentration and direct margin impact. Such idiosyncratic events can recur in commercial lending cycles, pressuring NIM and earnings near term and requiring higher provisioning or tighter underwriting to preserve capital over ensuing quarters.

Historically Elevated Leverage (Improved but Material)

Although debt-to-equity has declined, historically high leverage leaves the bank more exposed to rate and credit shocks. In stressed scenarios this can amplify losses or constrain lending; management must continue rebuilding buffers to ensure capital adequacy through downturns and regulatory scrutiny.

Fee Income Variability and Legacy Asset Charge-offs

Volatile partnership and fee income reduce predictability of noninterest revenue, complicating planning for expense and dividend commitments. Combined with charge-offs in legacy niches, this creates earnings variability and necessitates continued diversification of fee streams and tightened credit controls to maintain long-term stability.

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

Strong multi-year revenue expansion with improving profitability in 2025, consistently healthy ROE, and a balance sheet trending to lower leverage. Offsets include margin compression versus 2021–2022 peaks and a 2025 pullback in free cash flow growth with relatively low operating cash flow vs assets.

Income Statement

Revenue has expanded meaningfully over the last several years, with 2025 showing a strong rebound in growth versus 2024. Profitability remains solid for a regional bank, with net margin improving modestly in 2025 and operating profitability also trending higher versus 2024. Offsetting positives, margins are still well below the unusually high levels seen in 2021–2022, indicating some compression over time even as volumes grew.

Balance Sheet

Leverage has improved noticeably, with debt-to-equity declining from elevated levels in 2020–2022 to a more conservative level in 2025, alongside steady equity growth and rising total assets. Returns on equity have been consistently healthy and relatively stable across the period. The main watch item is that leverage was high historically and, while improved, remains meaningful in absolute dollars, which can matter in a changing credit and rate environment.

Cash Flow

Cash generation is steady, with free cash flow closely matching net income across the full period, suggesting earnings quality is generally supported by cash. Operating and free cash flow rose into 2024 and remained strong in 2025, but free cash flow growth turned negative in 2025 after a solid 2024. A key weakness is that operating cash flow relative to the company’s asset base remains low (though it improved in 2025), which is common in banking but still implies limited cash-flow cushion if conditions tighten.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	279.25M	262.38M	226.24M	150.80M	124.09M
Gross Profit	159.97M	144.63M	135.71M	131.72M	118.56M
EBITDA	60.45M	54.89M	50.77M	56.31M	50.58M
Net Income	50.32M	44.24M	37.03M	40.86M	35.76M
Balance Sheet
Total Assets	4.08B	3.85B	3.51B	2.98B	2.65B
Cash, Cash Equivalents and Short-Term Investments	46.68M	499.09M	436.52M	314.71M	262.81M
Total Debt	266.77M	327.98M	339.87M	466.98M	418.93M
Total Liabilities	3.71B	3.52B	3.22B	2.72B	2.42B
Stockholders Equity	371.58M	328.59M	289.59M	260.64M	232.42M
Cash Flow
Free Cash Flow	61.10M	57.27M	49.41M	35.42M	35.60M
Operating Cash Flow	61.70M	57.49M	52.29M	38.65M	35.99M
Investing Cash Flow	-373.38M	-328.47M	-506.85M	-245.27M	-111.01M
Financing Cash Flow	193.47M	289.17M	491.38M	252.19M	75.22M

First Business Financial Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 56.17
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FBIZ, the sentiment is Negative. The current price of 56.17 is below the 20-day moving average (MA) of 57.81, below the 50-day MA of 56.54, and above the 200-day MA of 51.62, indicating a neutral trend. The MACD of -0.08 indicates Positive momentum. The RSI at 45.54 is Neutral, neither overbought nor oversold. The STOCH value of 30.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	$597.01M	13.85	12.03%	0.73%	7.81%	26.91%
FBIZ	74 Outperform	$459.42M	9.11	15.02%	2.08%	8.21%	29.65%
HBCP	73 Outperform	$463.90M	10.10	10.86%	1.92%	6.25%	24.92%
CARE	72 Outperform	$464.71M	15.50	7.71%	―	6.62%	117.46%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
KRNY	65 Neutral	$504.32M	15.14	3.92%	5.80%	4.38%	―
COFS	58 Neutral	$431.18M	14.28	6.16%	3.69%	50.36%	-56.64%

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.